Companies today face an already tough and competitive business landscape. The fact that the coronavirus pandemic is raging puts added pressure on businesses. With supply chains hampered and major adjustments needed, businesses must look to squeeze out any competitive advantage they can.
Industries that function mainly through human capital must be able to hire and retain only the best and brightest people. This, however, is a challenge considering that many countries are suffering from a skills crunch. In the last quarter of 2019, over 900,000 vacancies for IT positions were recorded in the US alone.
One option for US-based companies unable to hire locally is to look to the global workforce for reinforcement. There’s an abundance of highly-skilled talent based in different parts of the world. Cloud-based communication and collaboration platforms have also allowed distributed teams to be productive even if they are not physically collocated.
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However, while it’s possible for companies to readily tap the global talent pool, they still need to perform due diligence and understand the local labour. Papaya Global looks to help such businesses navigate the minefield of cross-border hiring through its global workforce management platform.
“It’s easy to get excited about being able to hire workers from just about anywhere in the world today,” shared Papaya Global CEO and co-founder, Eynat Guez. “However, businesses need to understand that that when they hire overseas, they need to be in compliance with local labour laws.
“Hiring and paying globally can look complex, and it can be, but we want to make it simple for companies and let them take advantage of global talent.”
Problems with cross-border hiring
There are several key challenges in managing a global workforce, and businesses must be able to overcome these to be successful in their efforts.
To start with, there are compliance concerns to consider. Every country has labour laws of some kind that are meant to protect their citizens. Governments mandate that employers provide benefits such as healthcare, leaves, and retirement plans. Taxation and wage level laws must also be followed. Noncompliance to these laws can result in fines, legal action, and even bans.
To skirt around these provisions, some foreign employers opt to engage workers as independent contractors even those working full-time, but this runs the risk of contractor misclassification if the workers are not truly independent.
Cross-border payments can also become an issue for companies seeking a global footprint. While financial technology has come a long way to enable cross-border remittance, many remote workers still bemoan the high transaction fees and subpar conversion rates that many services offer. These can all severely impact the net pays of gig workers and freelancers. Thus, the choice of payment method or service becomes a serious matter for consideration by companies and their offshore staff.
How Papaya Global helps
Papaya Global aims to give companies the confidence to go global with their workforce by addressing these issues through its platform. It aims to streamline the various business activities related to managing distributed teams.
Its key service areas include:
Hiring. To legally hire someone in a new territory, a company needs to establish a legal entity i.e. a registered company. Not all businesses though want to make this investment when they are hiring just a few people, or are not sure that the new territory will be permanent. To circumvent this issue, Papaya Global offers access to global professional employment organisations (PEOs), also referred to as employers-on-record (EORs). These organisations serve as the legal entities, the employer-of-record of the hires, responsible for their payroll and benefits, with the company still overseeing the employee’s day to day work.
Onboarding. The platform also provides onboarding features that allow employers to gather the necessary information and documentation from their new employees. The information gets updated as soon as new data is inputted. Employers are also sent timely alerts if there are any issues in those submitted by the employee. Since the platform is cloud-based, it can also be integrated with the company’s existing information systems and time-tracking applications.
Management. The platform provides dashboards that allow companies to check the state of their global workforce. They can see visualisations of totals of employment costs and their respective breakdowns including taxes, contributions, and benefits.
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Payment. Employees can get paid in their currency of choice, such as their local currency. This minimises the uncertainty caused by fluctuating exchange rates. Pay slips can also be configured to be made available in their local language. Payments are also automated, ensuring that workers get paid on time based on their employment agreements.
Through these features, companies will be able to confidently engage workers around the world without having to worry about the intricacies of compliance, taxation, and payroll. Users can direct their efforts in leveraging the global talent pool to drive their efforts.
“Among the key benefits we provide is compliance. It’s tricky to navigate the intricacies of each country’s labor laws and tax schemes. By using our global workforce management solution companies can focus on hiring and working with the best talent available,” Guez continued.
Papaya Global has over $1.3 billion in payroll under management and is currently being used by more than 300 companies in over 100 countries worldwide.
Leveraging a global workforce
The availability of such a platform should come as a boon for companies today. Companies would do well expanding their search for top talent across borders. Papaya Global makes it easy for companies to achieve this. But aside from efficiency, it builds the positive relationship between employers and employees by ensuring that their relationships are formal, legal, and beneficial to all parties. Organisations built on trust are typically more productive and successful.