Global Employment: How to Avoid Bad Decisions in 2021?
For companies looking to expand their global reach, it’s essential to choose the right international employment solutions. Though there are many options available for your company abroad, deciding what is best can be difficult. The first step in this process should always be understanding the ins and outs of how remote teams operate today. From recruitment process outsourcing and employee onboarding procedures all the way through multi-country staff management services in compliance with local regulations, choosing the right employment outsourcing services company that works well with international organizations like yours can be a hassle. Some providers take advantage of their customers by promising things they can’t deliver. At XML International, we don’t think that this is an acceptable practice at all.
Can you still trust global employment aggregators?
- In the age of globalization, companies need to outsource some aspects of their business or face being left behind. As a result, staffing firms that can provide international employment services or contingent workforce solutions are in high demand, and they’re growing all over the world. Many multinational companies have turned to vendors that propose services based on an ‘aggregator model.’ These ‘aggregators’ outsource some employment functions locally for customers who don’t yet have operations there. They utilize third-party partners as middlemen throughout processes like local recruitment, onboarding, or, very frequently, multi-country payroll management.
- The aggregator business model is based on the promise that the vendor will perform some – or all – of your employment tasks, including payroll and benefits processing while offering more competitive rates than traditional service providers. Some do deliver on this promise, but it’s not always true for everyone. The model is actually giving the client companies a false sense of security. Customers think they have an efficient international workforce management system, but little do they know this choice entails risks that can jeopardize their success in the future because it is a flawed model.
The fewer the intermediaries, the better
- In the relationship with an aggregator, the idea of a single contract is obviously just that, an idea. It’s not uncommon for them to have dozens of different local third-party sub-contractors that take on workloads from various functions. One of the most frustrating aspects for small employers with no HR department is that every task related to hiring or firing employees falls on their shoulders. This can be overwhelming because a single contract takes up too much time and requires an in-depth knowledge of employment regulations, labor laws, etc., which they may not have. Luckily, managed services providers like XML International can replace aggregators and help perform all necessary tasks without any intermediaries, so you don’t need any particular expertise.
- The employment outsourcing industry – and, for that matter, the aggregator model – has been a boon for those seeking to hire international talent. But as it turns out, the cost of using aggregator services can be prohibitively expensive due to the cost of third-party contractors added to the exorbitant fees charged by aggregators themselves. Employers must weigh this against their current workforce needs before deciding if such an investment is worth making. Is it possible for you to keep up with market demands on time or scale internationally without risking quality control issues? Think twice. What you end up spending with an aggregator in comparison to what you would spend selecting candidates, hiring teams, and onboarding employees yourself independently from your home country can make a huge difference.
Make flexibility, availability, and scalability your priorities
- The aggregator system is a highly inflexible and complex solution. Since inflexibility shows inability, this model leaves companies with little freedom as they are restricted by the constraints of an outside-in perspective on customer needs. With outsourced services that cannot be customized for specific customers or projects due to limitations on timeframes and service levels, it’s difficult for these systems to offer real-time support at any point during the process without gaps in coverage while another provider may play a role later down the line.
- Customers are often left helpless and confused when they reach out to aggregators for help. Aggregators, however, don’t seem to care about their specific needs or questions – it’s as if customers were a nuisance rather than an asset that can be nurtured into generating more business in the future. This leads customers down wrong paths of inquiry which may lead them nowhere amidst different regions with various laws governing commerce on each side of the border.
- Besides, the global employment aggregated services provider has a closed network of vendors to which the customer is bound. This means that if any customers wish to switch from these dictated ones, tremendous costs await their way. These risks and losses are not worth it for many businesses when they could adopt an outsourced model where there is no need for changing legacy systems or existing infrastructures. With top service providers like XML International, this never happens: we propose flexible solutions tailored to your needs, they evolve as you grow, and we are available 24/7.
Play by the rules, protect your data and processes
- Although global aggregators pretend to work closely with their local partners, it is a constant struggle to keep all of their customers’ proprietary data and employees’ information secure. Since these elements roam from hand to hand around the globe – and are even shared at every conceivable corner in between – there’s always the risk that some important pieces get lost forever, making the client company more vulnerable than before.
- Even the data management systems of the aggregators, the intermediaries, and their clients can be quite different. The formats in which aggregators request data, for instance, are inconsistent with established standards within some organizations. This makes it challenging to comply with individual requests without any manual amendments on an ongoing basis – thereby introducing significant liability risks or issues related to manual tax filings, unknowledgeable benefits management, or unprofessional IP protection.
Aim for professionalism and best-in-class client support
- After a company has set up an account with the aggregator, they are often frustrated and disappointed to find that most local vendors do not want to deal with them. Many companies have revealed their wishes of removing this extra layer of middlemen’s incompetence because it would allow them more time while still saving money on costly international employment fees by communicating directly with local service providers.
The aggregator model has one major flaw: it is inflexible. If there’s a need for change, they must contort themselves into an uncomfortable position before making any progress in their transition from old service terms to new ones — a process that can be costly and time-consuming because individual contracts with vendors have been broken off. Many organizations find it difficult to rip and replace their existing infrastructure, again and again. Yet, they keep sticking with the aggregator or going back into dependence on a single provider as they cannot choose the next best option when faced with an inflexible marketplace. The aggregator model is broken from its inception but has, until now, expertly hidden all of these flaws like fresh paint over cracks in a wall.
- To keep up with global queries, some aggregators have decided that offshore call centers for customer service are the best option. The problem? Offshore call centers frequently can’t answer every question due to their unfamiliarity with labor laws and employment regulations in each country. Some even take days before they find a suitable solution! This results in delayed responses or inefficient workarounds as staff must chase vendors for answers rather than provide direct assistance. Client companies eventually end up losing business.
So, what is the alternative to aggregators?
- Working with foreign independent contractors can be risky, but it is sometimes the best option for your business if you aren’t ready to commit to regular employment schemes. Before deciding on this route, work with an in-country expert or international consultant and establish ironclad agreements covering everything, including IP protection, and clearly state autonomy while meeting your needs as they pertain specifically to new operations within country borders. Contracts should always be drafted based on local law because doing so will ensure everything goes smoothly from start-up all the way through implementation without any hiccups along the way.
- Businesses looking for a less risky way to expand without establishing an overseas legal entity should consider the business process outsourcing (BPO) model. This service offers back-end and front-end options with little engagement but high overhead. From hiring employees to managing client services or payroll, BPO providers take on many of the responsibilities that your business will need as it grows in size while you maintain control over all strategic decisions. However, the lack of control you have over your employees can be the downfall of this business model. As a customer, if you are not satisfied, all it takes is one conflict to lose an entire department in just a matter of hours. That rarely happens when you’re dealing with a trusted service provider with which you have a decent relationship.
- The formation of a legal entity in your new country is another option. It facilitates international employment and presents the lowest amount of risk when it comes to compliance with labor laws, taxes, IP rights, payroll management — all those things that can make or break a business abroad. However costly and time-consuming this process may be, establishing a foreign subsidiary should not be necessary if you’re going into the market only on short notice and will stay there no more than ten years at most: small to midsize businesses don’t need one unless they know from day one they’ll stick around long term.
- Global professional employer organizations like XML International provide, among other services, employer of record (EOR) services and contingent workforce solutions. In short, PEOs are third-party companies hiring and managing international employees in your new country on your behalf. This service includes handling all the complexities associated with payroll, benefits, withholdings, and taxes. Your company is still responsible for the day-to-day management of responsibilities and employee liabilities, but International PEOs help you stay compliant. If you’re looking for a way to minimize your risks and get started in an emerging market, then PEO service providers like XML International are perfect for you. You will remove the burden of establishing a subsidiary or deal with cross-border labor laws or employment regulations considerations.
Seeking a top global employment organization? Contact XML International
- If you want to hire and manage international teams, we can help you with our integrated employer of record services and contingent workforce solutions. We ensure compliance with labor laws and handle all aspects related to payroll management outsourcing. Our EOR services cover a wide range of essentials that can be customized to meet the needs of any size company or organization looking for global workforce solutions.
- A top employer of record, we offer a wide range of services that cover all aspects of remote staff employment, including payroll management and compliance with foreign labor laws, tax filings, and immigration formalities. With our truly global approach combined with local knowledge, we ensure you’re getting exactly what you need from day one!
- We work on your behalf, offering a flexible option to reduce financial risks in any market around the world. Our agile methodology helps you test markets and exit quickly if business or working conditions change at all. If successful, we adapt swiftly for new opportunities that come along while retaining a dedicated workforce abroad.
- Flexibility in hiring and handling personnel anywhere in the world
- Financial, legal, and administrative risks mitigation worldwide
- Simplicity in payroll and benefits management across geographies
- Compliance with local employment regulations in any jurisdiction
- Real-time adjustment to labor laws and taxes in different countries
- Improved employee experience for remote working and mobilization
XML can provide you with cost-effective yet flexible, personalized, and scalable solutions.