May 2022

Complexities in Global Employment Ushering Evolution in Workforce

By Catherine Honey

The world of today is completely different than it was just a few years ago. The workforce has changed dramatically as well. In fact, there are probably very few among us who can say that their job, and how or where they do it, has not changed in some significant way. I would further suggest that many of these changes are permanent.

Literally overnight, our traditional employment model, which was already challenged by a talent shortage, shifted to a near-total move to remote working. Companies were required to shift their operating models, reinforce their technology infrastructure, and rethink the way they conduct business. Business as usual is now anything but the norm.

Adding to this challenge is the competitiveness of the hiring landscape, which isn’t abating anytime soon. The need for a truly global workforce increases as companies continue to expand their global presence and customer base. In fact, various studies have indicated that 58% of small to mid-size companies have an international presence and that 87% of U.S.-based companies plan to expand globally. There are many reasons for this, from increasing revenue growth to cultivating a broader and more diverse customer base.

Hiring managers understand how difficult it is to find the right talent for the jobs they need to fill, and experts believe the labor deficit will impact as many as 85 million people by 2030. Clearly, the need for talent is growing, but employers now have available a more diverse and flexible set of employment options to use to fill their positions.


Flexibility Is Key

Workers are increasingly in the driver’s seat—demanding the freedom to redefine their day-to-day work lives—and changing market dynamics have given them the leverage to insist that employers meet those demands.

Employers, then, find themselves balancing the needs of their organization with the preferences and desires of their current and potential workers. There are legitimate reasons why on-site work, at least on occasion, is necessary. Employers need to be clear on the real requirements for getting the work done, and then hire to those requirements.

The middle ground lies in the flexibility of both workers and employers to recognize that work can often be done from non-traditional locations during non-traditional work hours, but that there are real business needs that must be met as well. In essence, this is what the new flexible workforce, that has embraced the “work in any way” strategy, is really all about—providing options and modeling the workforce in such a way as to best meet the needs of both employees and employers.

Knowing what those options are and how and when to use them may well be the key to success for global companies in the foreseeable future. Of course, with all the changes in the employment model, meeting those global employment needs should be fluid and varied.


Workforce Options

Some of the flexible workforce options that employers could offer their employees include the following:

  • Traditional employment model (otherwise known as local hires)—These hires may still be office-based but they are more likely to be remote or a combination of in person and remote, which is referred to as hybrid.
    • Traditional workers typically desire the need for permanent roles and the costs and expenses that come with those positions. They have typically been viewed as loyal, but with shifting economics that can no longer be assumed.
  • Expatriates—Workers who travel to another country to bring specific expertise to a role, enterprise, or project.
    • “Expats” are notoriously expensive due to the need for organizations to provide living expenses, additional perks, and tax relief. However, they are often deployed to fulfil a specialized need or to bring the corporate approach, knowledge, and processes to a new location. There is a high failure rate for expats—25-40%, according to a 2016 study by the Forum of Expat Management.
  • Independent contractors (also known as 1099 workers in the United States due to the self-reporting nature of their employment status)—These workers are a specific class of workers who typically work on multiple projects for multiple employers but can also be involved in long-term projects.
    • Independent contractors are engaged to work on specialty projects and are usually—depending on the country—allowed, encouraged, or required to work for multiple employers. They will fill gaps in the employment model but the risk of worker misclassification, such as employing them as independent contractors when they should be employees, is high.
  • Employer of record (EOR) services—These are typically deployed when a company has a need for regular, local workers before they have established an entity in-country and are looking to deploy staff quickly. EOR employees are employed by another employer as regular employees and assigned back to the original company.
    • These employees can usually be on-boarded very quickly, as the EOR provider already has the infrastructure in place and manages items such as employment contracts and benefits. However, as they are employed by another firm, consideration needs to be given to communicating their employment status to them to avoid confusion.
  • Gig worker—These are literally independent contractors who sign up for “gigs” (short duration projects), one after another. The name originated from musicians who play different venues each night.
    • Gig workers are engaged for projects or portfolio work, and the term typically refers to workers who may be anywhere at any given time. Digital nomads are usually gig workers who travel from place to place, usually spending some time in different countries as visas and business conditions allow.

Furthermore, each of these employment types have components of the others. For example, traditional employees are asking for more flexibility on hours, when and how to come into an office, etc. Gig workers are asking for perks normally reserved for traditional employees. Now more than ever, the global workforce is full of these complexities. How do we manage this challenging landscape across all these options? What’s an employer to do?


Managing the Varied Workforce

There are several factors to consider as you’re trying to set your course and determine how best to manage this very diverse and transient workforce (see Table). Some of these considerations include the following:

  • Timing—How quickly you need the workers—next week, in three months, or yesterday?
  • Location—Do you need them on site or can they be remote? If they’re remote, how far remote can they be? In the same time zone? On the same continent?
  • Duration—Is this a short-term project, a longer-term assignment, an indefinite assignment, or permanent assignment?
  • Control—Do they need to be 100% allocated to you, and do you need or want to manage every aspect of what they’re doing, or will they be assessed based on a project or specific assignments? (Note: This is an interesting one. Do you manage to results-based goals versus showing up and doing a job?)
  • Model—Do you need full compliance support where the worker is located, and do you need knowledge of the local market, culture, and ways of operating? Or, can the worker just sort of run on his/her own?

There are other considerations as well. For instance, if you’re brand new to global expansion and don’t have a strong corporate culture, that may shape your direction in one manner (expats supplemented by independent contractors locally). If you’re experienced and have established locations globally, along with strong infrastructure to manage, you may choose some other options (local hires supplemented by  independent contractors/nomads).

In all cases, you have the consideration of onsite versus remote or hybrid. What level of support will you provide, and how much flexibility are you willing to offer? Will you permit employees to become digital nomads who live or work in another location? If so, what level of help and support are you going to provide? They may need local or international benefits or other logistical support—what are you willing to provide? How long will you “let” them be in parts unknown?

These are all questions to consider, and there are no right answers. Further adding to the challenge is the need to keep the various worker types aligned and engaged to the corporate culture and common direction and creating a cohesive, functioning team. You may also have to address topics around employee engagement and perhaps even cultural alignment. Your employees may ask, “Why not me?”

In any case, you’ll likely use a combination of these types of workers to meet different needs in different locations. Having knowledge of them and a strategy for when and how you might look to deploy them will keep you in a good position.


Final Things to Consider

As you look to create your strategy and framework, there are a few other things to think about:

  • Be aware of your corporate strategy so you can set the resource planning strategy in alignment with the corporate strategy
  • Do a regular assessment of your workers and your needs
  • Know the local employment law, so you know what is allowable and what is not and the requirements on your company
  • Be aware of disgruntled independent contractors as they may “blow the whistle” on your company by reporting legal violations
  • Understand the risks of each type of worker, as well as the advantages
  • Build a strategy that leverages across all worker types, according to your long- and short-term needs
  • Understand that employees are having a greater say and are placing a strong emphasis on working the way they want (if you want the best talent, then you need to be flexible)

A best practice is to develop a strategy for how and when to deploy each type of worker, and how to manage them. Acknowledge there will be impacts on your organization in terms of teams, work styles, corporate culture, and even project planning. Change management and communications are the cornerstones of success, along with a healthy dose of flexibility and adaptiveness. 

As Bjorn Reynolds, CEO of Safeguard Global says, “Flexible is the defining word for the future of work. An organization’s people are the most valuable assets.”

In short, it pays to be prepared so do your homework in advance, and try to know and understand your options—at least at a high level—so you have a framework to assess the different employment types, and how and when they might be most useful for your organization. Most of all, be prepared to be flexible.

Catherine Honey joined Safeguard Global in 2017 and is currently the VP of Solutions Consulting. She is responsible for client-facing sales support, aligning Safeguard’s global payroll solutions to client needs and requirements. She is leading the department’s transformation initiative, moving the organization from transactional support to full sales cycle consultative selling partners. Honey has more than 30 years of experience in payroll and human capital management (HCM) working as a practitioner, consultant, and service provider for firms such as EY, Fidelity Investments, and Mercer. She has lived and worked around the world, is a veteran of two expatriate assignments, and is a published author and frequent speaker on global strategy, service delivery, and operations topics. Honey is a member of the Global Payroll Management Institute’s (GPMI) Global Payroll Editorial Advisory Board. She holds a BA from Temple University and an MBA from Bentley University.
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