Navigating Risks In Cross-Border Employment

Dealing with the rigors of the international marketplace means being able to adapt to different trends, as well as keep a steady stream of talent so you can compete. In order to handle this issue, you also need to be ready to hire talent from different areas, as well as deploy them over the course of international expansion. However, working across different countries when hiring talent or utilizing existing members of your teams comes with inherent risks. Here’s how to tackle them.

Benefits of Cross-Border Hiring

As a start, it’s essential that we talk about some of the benefits of cross-border hiring. After all, it’s difficult to discuss risk without reward. Here are some of the key benefits for putting together cross-border ventures:

  • The ability to increase revenue by expanding operations and your audience.
  • Diversifying the portfolio for your clients. For example, if one region had economic issues, profits from other areas could make it easier to weather the market shift.
  • Upscaling products. Having a larger international market makes it easier for you to spread your offerings to different areas. In addition, you have a larger talent pool to work from if you need to ramp up operations to take advantage of a surge in business.

So, with this in mind, say that you’re looking to break into a particular area. One key thing to do is find a strategy for your market entry. A few of the options include:

  • Direct export
  • Licensing
  • Franchising
  • Partnering
  • Joint Ventures
  • Buying an existing company

Each of these comes with its own set of pros and cons. For example, moving into an existing company means that you have an existing infrastructure, but also existing expectations you need to adhere to.

As a side note, it’s essential when planning a market entry strategy, that you pay proper attention to HR. Whether your focus is diversification, concentration, or going international, you need to power your plans with talent. A refined global HR method, using services like Professional Employer Organization or a Global Employer of Record (GEOR) is key here.

Cross-Border Employment Pressure Points

With that covered, we can begin to talk about some of the risks of cross-border operations.

Compliance: Compliance is a far-reaching category, but certain areas are more likely to give your company trouble. Tax risks are one key area of discussion. For example, you need to make sure that you are properly paying your tax responsibilities for each country you do business in, while keeping your business structure in mind. In addition, if you’re transferring current employees to work as expatriates, you need to be mindful of immigration law.

Employee misclassifications: Many people perceive independent contractors as an easy way to fill global teams. However, opting for this route, and giving the wrong classification, can end up causing problems like financial penalties and the early termination of projects.

Employee retention: This is a concern for any business, but can be especially troublesome for cross-border operations. Benefits and other expectations may be different from one country to the other.

Culture barriers: This is mainly an issue when employing expats. It may be difficult to work with local professionals or partners at first. Discrimination may even become an issue.

Time issues: If there is a large time zone difference between the country and your base of operations, it may impact the ability of your teams to contact each other or deliver projects properly.

Systemic risk: Economic developments in the country you’re doing business in may impact your operations. These include market problems in the local economy or even political unrest.

Legal risks: In some cases, a legal change may occur in your country of business that has an instant impact on your business. This can include the law being applied in a way you wouldn’t expect, or international sanctions on the entire country.

The Art Of Managing Global Assignment Risks

With all these potential pitfalls, it’s important to make sure that you know exactly how to manage issues when it comes to cross-border employment. Generally, this orbits around two main points. The first is making sure that you’re confident on how to maintain the processes of hiring and assigning international talent. This means making sure that you’re able to find clarity and transparency, potentially across multiple countries.

The second stage of this is understanding that you won’t be able to manage all of this alone. Even the most diligent companies and HR departments may not be cognizant of the different regulations and aspects of employment law for each company in which they do business. Considering how these can change or be extremely complex, it’s best to have reliable business partners in this area.

If you’re interested in finding professional support when it comes to your cross-border employment and secondment, your ideal first option is working with Acumen International. When it comes to helping your company grow, we offer a variety of key benefits. These include:

  • Global coverage, with support in over 190 countries.
  • The ability to help with employment compliance in each country we serve, no matter the specific regulations.
  • Complete confidence that your employees will be classified properly, and employee benefits repayment will be handled correctly.
  • 24/7 support in case you have any issues.
  • Flexibility in service, as well as a clear termination procedure that still leaves you in control.

Acumen International is your ideal partner when it comes to all of these different methods. We look forward to working with you for all your cross-border hiring needs.

Reach out to us today for more information.

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