How to operate globally during uncertain times
The recent outbreak of the coronavirus COVID-19 is an unprecedented situation we find ourselves in at this time. As a result, our way of life and work has changed very quickly. In this post, we focus on what happens after COVID-19 and how businesses can expand and employ workers globally during uncertain times.
In a global effort to slow down the spread of the virus and protect the health of people, governments across the world have implemented strict societal measures regarding education, work, and life. As a direct result of the COVID-19 crisis, many businesses are now asking their employees to work from home. While some employers have the experience of their employees working remotely, most will be deploying their entire staff for the first time.
Remote working is not something new. In fact, before this outbreak, it was predicted that by 2020 over 70% of people would be working remotely at least one day a week. However, due to COVID-19, many businesses are fully working from home for the first time.
As we work through this crisis keeping our people safe and protecting our business, we wonder what happens after COVID-19 passes? We don’t know how long everyone will work from home or what global trends will occur after. We can suggest that companies who were once interested in remote working may want to pursue it more, and businesses that were hoping to expand internationally may need to look at other cost-effective options to achieve their goal. We also know that other businesses that are currently working globally will still need to operate once the pandemic is over.
Expanding globally during uncertain times
Global expansion has always been viewed as something physical where companies set up entities and build infrastructure such as factories or offices in their new chosen market. However, what we’ve seen from the COVID-19 crisis is that businesses across the world have their staff working from home. In fact, multinational companies were the first to assign their global workers (normally based in offices) to work remotely. They were able to deploy their staff remotely by being remote ready.
It’s no surprise that remote working will become the future for businesses after COVID-19. Advanced digital technology has been available all this time to help us work remotely and more productively. Online programmes allow workers across the globe to communicate in real-time, attend video conferences and share documents in a central location.
Currently, due to the COVID-19 crisis, most land borders are closed, and construction businesses have stopped. So, where does that leave the companies that were hoping to expand their business internationally this year?
As mentioned before, it is thought that the only way to expand internationally is to set up an entity in a foreign country. If a company is building infrastructure and has long term plans in place for the country, then establishing an entity may be a solution. However, if a company is looking for a cost-effective and faster way to hire their remote workers and expand globally then an Employer of Record (EOR) solution could be considered.
Employing workers globally without worrying about international barriers
An employer of record also known as International PEO is a global employment solution whereby a third-party provider hires your employees on your behalf. The EOR provider becomes the legal employer and takes responsibility for the entire employment relationship, employment benefits and HR. The end client company manages only the day-to-day responsibilities. So, leaders who are currently managing their remote workers in one country could through an EOR solution manage several other local remote workers across the globe.
Other benefits of using an Employer of Record include:
- It enables faster expansion into international markets
- It enables the retention of key talent regardless of where workers are based
- It enables companies to explore new markets before their competitors or when their home market is saturated
- Support companies post M&A
- Outsourcing allows companies to focus on their core business activities
It’s important to note that employing abroad directly can be a complex and costly process. Each country has its own rules and regulations regarding compliance, regulatory frameworks, employment laws, and taxes. Therefore, it is necessary to engage with specialist tax accountants and employment lawyers and those costs can rise very quickly.
Through engaging with an EOR provider, companies can scale globally without worrying about international barriers. Businesses can be present in a new international market without all the hassle of setting up an entity. With EOR, there is no need to engage with lawyers, solicitors, banks or foreign tax authorities because the EOR provider ensures that all workers are legally and fully compliant to provide services in the new markets in a matter of days. Most importantly, an employer of record solution allows a business to continue operating in a global world during uncertain times.