Enterprises Must Look Beyond Borders for Access to Top-Tier Talent

Today’s issue was guest-authored by MBO Partners’ Chief Revenue Officer, David Cassar .

Even though the U.S. jobs market has shown signs of cooling, role vacancy rates continue to remain unusually high and above their pre-pandemic average.?

The U.S. labor environment continues to suffer from a shortage - and with enterprises seeking to grow despite current economic headwinds and adverse geopolitical events, this will remain a key concern among businesses for the foreseeable future.

There is a solution staring most organizations in the face - one that my team at MBO has helped companies implement for years.

It’s time for US organizations to look beyond our borders for the best available talent.

Increasingly, countries in Eastern Europe, Asia, and South America offer fantastic skilled talent pools at a lower cost (and substantially higher availability) than the US equivalent.

Before organizations jump headfirst, however, they must consider a few key factors...

Government Regulations

Hiring abroad means a company has to be aware of and comply with the labor regulations of another country, leading to questions like: Should an organization create a subsidiary entity in the country it plans to hire from?

Work through a staffing agency?

Hire the talent as an international independent contractor? Should offshore talent be classified as independent contractors or full-time employees?

These aren’t trivial questions.

Even in the US, employee classification can be a fraught topic. Other legal systems only welcome additional complexity.?

Depending on the kind of employment, this means a business has to comply with statutory obligations concerning benefits, paid time off, vacation time, dismissal, and severance pay.

Compensation and Taxation

Aside from government regulations, a business needs to determine whether it’s going to pay offshore talent in U.S. dollars or their home country’s currency.

Offshore talent may prefer not to be paid in U.S. dollars, especially if it is stronger against their home country’s currency.

If an enterprise wants to go this route, it has to take into account foreign conversion fees, international money transfer fees, and other associated costs.

Additionally, a company needs to be aware of tax laws abroad. Other countries’ tax laws can be just as complex as in the US though in completely different directions. What would be a trivial business decision domestically can lead to fundamentally different tax concerns internationally.

Access to Sensitive Company Data

Engaging talent involves providing them access to company systems which contain sensitive data. Since data breaches have gone up, businesses have to protect themselves from cybersecurity breaches and choose who to give access to their systems.

At MBO, we’ve spent years helping organizations navigate these hurdles. It can feel daunting, though the reward when organizations do get to tap into the incredible labor pools outside of the US is often more than worth the effort.

The Time to Hire Offshore Talent is Now

Right now, we at MBO are seeing talent pools based in Eastern Europe, Latin America, and Asia Pacific who want to work with U.S. companies. U.S.-based organizations are in a position to leverage these talent pools with outstanding results.

Access to multiple low-cost, well-trained, and English-speaking talent pools enables organizations to navigate the talent supply issues we currently face and will continue to grapple with in the years to come. It’s a competitive advantage like no other.

That said, the complexities involved mean that organizations really need to focus on strong regulatory understanding and invest time and energy in defining their policies. Working with an organization like MBO Partners that already has this expertise can enable an organization to tap into the thriving international talent pool without worrying about the myriad landmines.

Trending Topics

• Only 26.6% of paid workdays in the U.S. were conducted from home in May 2024, down from the pandemic peak of around 60% and 28.6% in May 2023 according to data from WFH Research. Despite this shift, the information and technology, finance, and insurance sectors still had the highest share of work-from-home employees.
• For the third year in a row, a Gallup and Bentley University poll found that a majority of Americans believe that reducing the pay gap between average workers and CEOs is an issue that corporate boards are failing to address.

• In a recently published study conducted by Stanford University economist Nicholas Bloom, it was discovered that a hybrid schedule where workers worked from home twice a week lessened quit rates, improved job satisfaction, and had no adverse effect on performance.
• Recent research from Harvard Business Review researchers has shown that remote work impacts female professionals differently based on career stage. Those in junior positions had difficulty receiving mentorship when working from home. On the other hand, those in senior positions become more productive when working remotely since they require less supervision.
• According to Gallup ’s “2024 State of the Global Workplace report,” around 62% of employees globally are not engaged at work. Worse, another 15% is actively disengaged at work or actively opposed to their employee’s objectives. These groups of employees are costing the global economy USD 8.9 trillion.