Neil Merola, Chief Executive Officer at Entity Solutions Pty Ltd offers 3 considerations for recruiters
The global pandemic has changed the world we live and work in for the foreseeable future.
It’s now been more than eight months since professionals around the world hastily packed up their office workstations and transferred them into their homes. Organisations were tasked with nimbly adapting business continuity plans with little notice, as Governments introduced varying levels of social, work and movement restrictions around the world.
One of the few silver linings is that this rapid response and adjustment to remote working has introduced greater flexibility for workers, recruiters and hirers. For projects that can be managed and delivered online by white collar professionals, placing local candidates in local roles is no longer the only option. This is a huge opportunity for recruitment agencies to look outside the jurisdictions where they and their clients are based, to secure top talent.
International contract engagements will come into the fore over the coming months, which is uncharted territory for many recruitment and staffing agencies. Without the need to work from a physical office, companies are both looking into expanding into new territories or hiring workers in different locations to deliver online projects.
In many cases, the hiring manager and candidate may still prefer to work towards relocation. Ongoing travel bans and border closures may be adding delays to this process. However, workers can still be engaged in their current location to work on projects until international travel resumes.
What are the key considerations for recruitment agencies when it comes to sourcing and engaging workers overseas?
- Understand the local compliance landscape where your workers will be deployed
International engagements can be complex and understanding the nuances of local compliance, for both where your end-client and worker is located, is key.
There is a crucial distinction between what constitutes being an employee and a contractor, so it’s important to understand the ins and outs of engagement structures. The rise of the gig economy and the recent inquiries into sham contracting has muddied the waters of contract engagement. Staying abreast of local legislation in employment compliance ensures that agencies, clients and workers are protected.
As well as payroll tax and the relevant deductions (depending on location), a key element to compliant engagements is the local insurance requirements. This varies by location but in Australia covers Global Public Liability, Workers Compensation and Professional Indemnity at the appropriate levels. Insurances are essential components to a risk-free, compliant engagement and protect both the worker and the end-client organisation.
Data and privacy laws
In Industry X when processes are automated and private information sits online, adhering to local data and privacy laws is a key consideration in overseas engagements. Keeping your organisation, end-client and worker’s information secure is imperative.
Cross-border flows of personal information create risk and must be managed carefully. The 2018 implementation of GDPR in Europe created ripples around the world and created a new standard for data regulation. In the same year, Australia joined Singapore, the US and Canada amongst others in APEC’s Cross Border Privacy Rules system.
- Bring on a local partner at the beginning of the journey
Involve an in-country specialist as early in the process as possible. That might be in the form of a payroll specialist, labour hire or contractor management organisation. Ideally your local partner can handle legal, migration, industrial relations, occupational health and safety, insurance and taxation all under one roof.
Important questions to ask when looking for a local partner include:
- Will they provide a positive experience for your workers?
- Do they pay statutory obligations?
- What are their data policies?
- Do they have the financial backing to finance your workers’ payroll?
- Are their online processes automated and secure?
- Do they have in-house specialists?
- Develop compliant payroll processes
The payroll elements vary in every jurisdiction, such as taxation, benefit deductions, overtime, health or national insurance, debt and pension (also known as Superannuation in Australia, 401K in the United States or CPF in Singapore). The reporting requirements of companies to the local tax authority are complex and require the processing of personal information, touching back on the data and privacy issue mentioned earlier.
Outsourced payroll financing is an effective way for you to meet payroll requirements on time, and means you mean only have one invoice for each location that your workforce is based in.
While there is a lot to consider when recruiting and deploying a worker overseas, it can be highly rewarding in producing the best results for the end-client and the worker.