Global employment is expected to grow dramatically in the years to come. Globalization links the world’s economies together which leaves little room for an individualistic society. The current state of the economy is fast-paced and constantly changing. Many companies are looking to expand their operations to keep pace with the dynamic, global growth of the business world. To support their growth, companies may turn to outsourcing, Employment of Record (EOR)/Professional Employment Organization (PEO) services or creating wholly-owned companies in the country of interest.
Keep reading as we discuss the future of global employment.
Many companies take part in outsourcing to tap into the talent and cultural know-how of other countries and their talent. While outsourcing may be a good option for a one-off project or a short-term contract, outsourcing comes with some risks.
One of the most important and least understood considerations is the cost of outsourcing. risk. While outsourcing may seem like a cost-effective solution, you are likely to put a lot of time and energy into educating the person or organization you outsource to about your company and the project. Therefore, outsourcing services may end up costing more than expected. Take into account not only the cost of the project outsourced by the cost of the person managing the project.
While outsourcing is a great option for some businesses, there is the potential of losing control over the work being done by who you outsource the project to. When tasks previously performed by internal staff are given to outsiders, over whom the company has little or no authority, quality may suffer, production schedules may be disrupted, or contractual disagreements may develop.
With an EOR/PEO, you are not just hiring someone to do your work, you are hiring someone to be part of your team. Your new employee will be like other employees in the home office: they understand your organization, mission, and values. Having someone truly be a part of your team will yield a job well done. This employee will likely be invested in your company and their work, rather than a freelancer who is looking to get a project done, well or not.
An EOR/PEO functions as a co-employer in the market you choose. A Global PEO helps companies expand into markets around the world. With a Global PEO, companies are able to hire employees overseas in a short amount of time without needing to set up an entity in that country. Companies use employment solutions such as EOR/PEO services to hire in places where they do not have entities, minimize health care and other benefit costs, and to offer “big company” HR solutions to smaller teams.
To keep up with a competitive business landscape, companies expand their horizons and increase their innovation threshold. By doing this, companies may shift towards hiring global employees for ideas and innovation and less towards hiring for operational purposes.
The benefit of hiring global employees is that these individuals will have local nuance and knowledge of the market you are hiring in. Different cultural perspectives give your business the opportunity to think outside of the box to overcome obstacles that you otherwise would not have been able to do. Hiring local employees also helps bridge the gap between the culture back at home and the culture abroad. In the long run, your business may be able to gain a competitive edge over others because of your diverse workforce.
Globalization has nudged companies to send their business overseas. The majority of companies expand into new markets in one of two ways: by outsourcing/hiring overseas or by setting up a company. With a team of professionals at your company’s disposal, NNRoad’s company formation services help your business comply with local laws and set up your entity legally in a new country.
Perhaps your company used EOR/PEO services in the past and is ready to move on to the next level. Maybe you are ready to commit to entering a new country by setting up your own entity and operation independently in the country of your choice.
When considering setting up your company in a foreign market, it is recommended you think about your:
NNRoad’s company formation process consists of six simple steps:
Business owners can use a company formation service instead of incorporating on their own directly. Using a company formation service provider like NNRoad has become the incorporation method of choice for many small business owners. They are usually more cost efficient than using an attorney and less time consuming than preparing and filing incorporation documents on their own.
If you are interested in expanding overseas by hiring a global workforce or setting up an entity, reach out to us today!