Victor Anaya is the CEO and cofounder of Serviap Global, which provides global hiring solutions in over 100 countries world wide.
The pandemic brought new possibilities and a new reality for businesses. Many companies found themselves without the need to be constrained by physical location anymore, and most organizations had to think creatively to find solutions to the challenges presented by the pandemic.
At the same time, professionals realized they were just as productive working remotely as when they worked at an office. A recent working paper revealed that home working led to a 13% performance increase. In addition to this, many employees felt up to 20% happier working remotely compared to those who worked at the office, according to a study shared by Tracking Happiness in January 2023.
With all this in mind, it is perhaps not a surprise that 64% of people said that being asked to return to the office would lead them to consider finding a new job if it hasn’t already, according to a study published in 2022 by ADP Research Institute.
As the founder of a business that provides international employer of record (EOR) services for companies that want to hire globally, this is something I have a lot of experience with. We have been helping companies, both big and small, with hiring international employees for over 12 years.
Not Just About Financials
It is important to consider that, among many startups, access to resources is limited, including salaries. This means founders and entrepreneurs need to get creative to offer incentives that attract the best talent with the necessary expertise, experience and knowledge. Unfortunately, despite their best efforts, startups cannot always find the talent with the desired skills and experience at a sustainable price point in the domestic market.
Yet, highly skilled professionals with experience in world-class companies are often available in other territories at a lower cost, offering an opportunity for entrepreneurs to access the pool of talent their business needs.
As such, cost savings shouldn’t only be seen in terms of absolute payroll but also in the bang you get for your buck. Startups typically have a lot of energy and ideas but a lack of deep knowledge and experience. The ability to recruit talented and experienced people at competitive rates from abroad allows young entrepreneurs to better fill the gap of expertise and experience.
Developing Nations Home To Growing Talent Pools
In many developing countries, recognition of the importance of STEM subjects, and especially IT-focused professions, has seen governments and international bodies such as the Asian Development Bank emphasize them and invest resources into promoting higher education programs related to them in recent years.
I’ve noticed this has contributed to a growing number of startups in the United States seeking new markets as alternatives to hiring U.S. tech workers, with numerous countries around the world offering deep pools of top professionals and some emerging as specialists in particular sub-fields.
In some places, supply surpasses local demand, which results in workers looking for opportunities outside their home countries. In others, the opportunity to work for an international company offers a level of prestige that attracts top-quality professionals.
International Hiring Increasingly Accessible For SMEs
In the past, many small- and medium-sized enterprises may have found global hiring a daunting prospect, with unfamiliar foreign regulations and language barriers with overseas recruiters presenting two considerable barriers. However, the interconnected world we live in now has made it more viable and increased awareness of the opportunities for doing so.
Today, a wide range of options are available for establishing a distributed workforce, including hiring through an employer of record (EOR)—a service that I noticed was already growing fast before being supercharged by the pandemic.
Other options include working with a professional employer organization (PEO), which is like an EOR but differs in terms of requirements and liabilities assumed by the client company. Hiring contractors is also an increasingly common approach.
Best Practices For Working With EOR Partners
Startup leaders who are thinking of working with an EOR company should consider what they want from the arrangement before looking at the market. There are many different options available, and this will depend on the services required and territories to target. Due diligence is also of paramount importance—check that the company really can provide the services they offer.
I suggest you think about territory versus job requirements. This may involve partnering with different companies in different countries. Some EOR companies specialize in certain regions, while others are more global in nature. If you are looking specifically to target a certain territory, the former may be more useful to you. If you are more interested in the type of work than the territory, go for the latter.
Next, think about how much customer service you expect from your EOR partners. Consider whether you need to give or receive constant updates or if you would prefer to have more independent employees. A larger company in the market may be able to offer lower costs to you from their economies of scale, but this will likely result in slower communication. A smaller company may be more agile and offer bespoke service but at a price.
Of course, there are some challenges to working with EOR companies. Although they have considerable expertise and can speed up expansion, you are always paying for this. The more you need an EOR to do for you, the more they will charge. If you have not properly identified your initial needs, you will be paying good money for services you are not using. By the same token, you could well be missing out on a service that would be useful.
This is why a starting vision is so important.
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