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Despite the turbulence, there is reason to be optimistic about future economic growth. Most economies weathered the global pandemic stronger than predicted: US real GDP is now 2.8% higher than at the end of 2019.

Nevertheless, the prospect of a recession, in addition to global energy and cost of living challenges, means that companies need to be strategic in their hiring decisions. In my opinion, the best way to do this is through global recruitment: there is no good reason to hire only local people anymore. Here are five reasons why global recruiting is the smart option in 2022.

1. Increase the talent pool

The unemployment rate in the US stands at 3.6%, close to full employment and comparable to pre-pandemic levels. At the same time, vacancies/jobs remain strong – 11.3 million were counted in July Overview of vacancies and employment turnover (JOLTS). The largest number of vacancies mainly concerns skilled positions, jobs in the Professional and Business Services category.

This tight job market means that employers are finding it increasingly difficult to hire people, especially for specialized positions such as software engineering and data science. Hiring globally is a long way to solve this problem. When you hire internationally, you have access to a much larger pool of potential applicants. For example, Poland, Slovakia and India are known for their pool of highly qualified technical professionals available to work remotely for international companies.

Related: The Global Deck of Talent Is Being Reshuffled

2. Cost savings

Hiring abroad means having access to workers who live somewhere with a much lower cost of living, which generally means that salary expectations are correspondingly lower.

Countries also differ in the requirements for mandatory employer contributions and payroll taxes that increase labor costs. For example, the United Kingdom and Germany generally require employers to withhold a certain amount from the employee’s wages for health insurance. But Australia and New Zealand, with public health care systems, do not require such employer insurance contributions. Overall, hiring a global team can significantly reduce the payroll burden for your business.

3. Leverage Resilient International Markets

Global economic challenges are not evenly distributed across countries. The Asian economies in particular have been hit more mildly. In China, India and ASEAN-5 (Indonesia, Malaysia, Philippines, Singapore and Thailand), strong growth of more than 5% per year is still forecast for the rest of the year and into 2023.

For ambitious companies, this means attractive consumer markets for overseas expansion. And the biggest factor in your overseas market success is probably employees who are familiar with that market.

When hiring employees for your international business presence, the two most popular options for ensuring full legal compliance are:

  • Setting up a local entity or subsidiary in that location: That entity or subsidiary becomes the local employer and must comply with all employment laws there.
  • using one Employer of Record (EOR) solution: The Employer of Record becomes the legal employer at that location and takes care of all payroll, HR compliance and payroll taxes for employees based there.

Related: Are You Considering Global Expansion? Now could be your best chance.

4. Compliance Benefits

In some countries, employer compliance is heavier than in others. For example, in some countries:

  • Termination at will is permitted – continuation of employment is entirely at the discretion of the employer. Others only demand termination for good cause and/or severance payments.
  • Generous annual vacation and paternity leave allowances have been made mandatory. In other countries there is no legal right to paid leave.
  • Employers are required to contribute to employee retirement plans and compensation funds. In others this is voluntary.
  • Employers should support flexible working and have a remote working policy. In other countries, this is entirely up to the employer.

In short, when you choose a foreign country of hire, you have more control over your compliance obligations than when you hire all your staff locally. This can  be done thanks to a PEO Company. For instance if you want to expand into Japan, you will use PEO Japan services.

5. 24/7 Customer Support

Gartner reports that only 9% of customers can solve their business questions on their own. This means that, despite the cost, efficient customer service channels are more important than ever. Customers expect fast and capable support no matter where they are located and increasingly, no matter when they contact the company.

Meeting the service expectations of your international customers with customer support in just one time zone is nearly impossible. With 24/7 support becoming the expectation, it is important to have staff in multiple locations. Hiring globally means you can easily place your personal support (via voice or online chat) in multiple time zones. This enables you to offer your customers complete coverage.

Related: 5 Things to Remember When Hiring International Workers

Being limited to your local recruiting market is a thing of the past. Hiring internationally helps you acquire talent, saves money, allows you to expand into new consumer markets, and provides 24/7 customer support. In the future, it will become increasingly difficult for companies that stay local to maintain their competitive advantage.

 

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