Acumen International’s new informative video segment appeared on US TV in Modern Business with Kevin Harrington, the original Shark from hit reality series Shark Tank. The first broadcast took place on WAXN-TV in Charlotte, NC, November 25, 2018. In the segment Nick Ganzha, our company’s founder and CEO, talks about a new, innovative solution in… Read more Acumen International appeared on US TV
Acumen International’s new informative video segment appeared on US TV in Modern Business with Kevin Harrington, the original Shark from hit reality series Shark Tank. The first broadcast took place on WAXN-TV in Charlotte, NC, November 25, 2018.
In the segment Nick Ganzha, our company’s founder and CEO, talks about a new, innovative solution in global employment that can help you employ your international workforces as fast and easy as in your home country. Get to know the benefits of our Global Employer of Record solution that helps your company operate globally fast, risk-free and 100% compliantly.
April 14, 2018, Acumen International collaborated with Modern Business, a full-service production company, on producing an informative segment focusing on how our company can help you expand globally and hire international workforce without local business entities, large budgets or any other constraints limiting your growth potential.
As a guest of Modern Business, Acumen International is appearing in a 4 minute segment, airing nationwide and featuring Kevin Harrington, the host.
Debuting on WAXN-TV in Charlotte, NC, our video segment had a national airing on FOX Business Network. It will also air on other cable news networks across US well into 2019. The next broadcast will take place on CITL-TV, Lloydminster, AB, Saturday, September 7, at 9:00 AM.
What is International PEO, how did it appear and what differs it from other methods of hiring and compensating foreign workers? On a basic level, global PEO service or global employment outsourcing, umbrella and payroll services are precisely what it sounds like: a third party provider that helps businesses expand globally and/or strengthen their internal… Read more Global PEO vs. Umbrella and Payroll providers
What is International PEO, how did it appear and what differs it from other methods of hiring and compensating foreign workers? On a basic level, global PEO service or global employment outsourcing, umbrella and payroll services are precisely what it sounds like: a third party provider that helps businesses expand globally and/or strengthen their internal teams with global talent by hiring and payrolling international workers on their behalf.
Notwithstanding the similarities among the three methods, you’ll probably nevertheless use each of them in different situations to help meet the three very different needs you may have. It is advisable to carefully analyze the differences between the three solutions in order to choose the best option.
Umbrella companies take care of payments to independent contractors. Ideally the contractors need to be self-employed in order to get paid via an umbrella company. Umbrella company however cannot onboard workers on its payroll. Umbrella companies don’t make arrangements to ensure workers welfare is well taken care of during the time they are on their assignments. Besides, they do not decide with the employer to offer parental or holiday leaves. Their objective is only payments. In terms of Umbrella company, it acts as employer to different individual contractors and pays them through PAYE (pay-as-you-earn), that is the employees’ salaries are first taxed before the payments.
Most of payroll service providers will do monthly salary payout to your employees on your behalf. However, you will need to be a legal employer that would bear all employment risks while outsourcing the payroll function. Using Payroll provider services, the client’s employees do not become the payroll provider’s employees. It’s an option suitable for companies that need to outsource the accounting tasks.
With international PEO solution, you can legally employ and compensate global workforce in literally any country of the world without the need to be a legal employer and/or open your own company to hire foreign personnel. In other words, you can outsource a complete global HR cycle and grant the risks and effort to a PEO provider. Apart from paying all statutory contributions, you can provide additional benefits in order to retain top employees. A global PEO would handle for you all administrative costs, business travel, fuel expenses, accommodation, office rent, medical and life insurances, and pension fund deductions.
International PEO emerged as a reaction of the HR sphere to the development of the sharing economy that separated international employment from contracting workforces. Global PEO helps businesses that go global meet their growing hiring needs as easily as they would in their home countries. It has become a core of many international companies’ HR strategies in the sharing economy: global 100% compliance for talent beyond borders. The main advantage of Global PEO is that it helps companies with work permit and immigration support, which any other company doesn’t do, as the sponsor would need to employ the worker further after the work permit is issued. Moreover, it protects the overseas employee from any kind of mistreatment or any unpleasant coming from the employer.
Most successful businesses such as AMAZON, AIRBNB, and UBER use the business model of the sharing economy and so far, they are top in the industry. Ready to become a successful international company through our International PEO solution as an integral part of the sharing economy for the employment field? Let’s talk.
We are currently at the peak of information technology; it has never been easier to communicate on a global scale as it is today. Globalization is the only way to expand into new markets. Many businesses are spreading their influence into foreign markets to grow their brand and increase sales. However, setting up an international… Read more How to Avoid Troubles while going global in the Era of Globalization
We are currently at the peak of information technology; it has never been easier to communicate on a global scale as it is today. Globalization is the only way to expand into new markets. Many businesses are spreading their influence into foreign markets to grow their brand and increase sales.
However, setting up an international labor force is the biggest challenge when it comes to expanding into foreign countries. It can be rather cumbersome and time-consuming. If you are looking to hire human resources overseas, here are some of the hoops you will have to jump through:
Work permit
An employee must have a work permit to work abroad or for a foreign company. Its acquisition may take months in some regions. Different countries have different and often stringent work permit requirements. Most of these processes involve legal compliance, proof, and qualification certification. Some governments make it considerably difficult to bring in foreign workers to get their citizens employed instead. Others are opposed to specific foreign investors as they can be believed to pose unfair competition to local businesses.
Visa
After securing a work permit, an employee needs a visa to travel to a foreign country. The granting of a visa may depend on several factors that neither the employer nor the employee controls. Diplomatic relations, political climate, and other social factors may hinder one from being granted a visa or at the least require fulfilling several demands. In addition, a visa is only issued for a limited period, after which it must be renewed.
Foreign Labor Laws
Different countries have different labor laws. These laws dictate the employee-employer relationship, employee rights, and other work-related social and wellbeing requirements. Specific labor laws may force an employer to reevaluate the entire human resource structure. In some countries, labor laws are complicated and detailed, to avoid the hefty fines and penalties imposed on lawbreakers, most employers opt for a legal consultant specialized in labor law to handle such matters.
Three Engagement Models of Global Employment
As an employer onboarding and tasking employees in foreign countries, you are responsible for handling all the legal matters involving permits, visas, and labor laws. On top of that, you are also responsible for the employees’ wellbeing – housing, transport, ideal work environment, and the like. To ease the burden, international employers opt for one of three conventional services to assist in global employment.
1. Independent Contractor
You can hire the services of independent workers in foreign markets on a contract agreement rather than on a more tedious employment basis. Independent contractors are flexible and can tune their efforts quickly to promote your services and products in a market they are already familiar with. Business often hires contractors for sale purposes in an affiliate arrangement.
The problem with contractors is that they are not representative of the company or brand. Chances are, a single contractor may be working for several companies simultaneously. Time and resources must be divided among the various clients, including competitors. Besides, a contractor is not under the direct control of the employer.
2. Local Staffing Agency
Local staffing agencies work in the foreign country, source, vet, and hire local employees on your behalf. They take care of all the staffing within the local country’s legal framework, eliminating the need for legal consultation. They also serve on contract as an intermediary between the employer and employee.
Local staffing seems like an ideal solution for global employment. The problem is these agencies are localized in their host countries. If you are looking to employ workers in multiple countries, you’ll have to deal with several agencies in all the different countries. There are also some significant risks while working with local employment agencies.
You are not in control of the hiring process. The agency does the sourcing and vetting of qualified employees. You may have an unproductive labor force if the vetting process is not thorough.
The contact with the agency is agreed upon within the agency’s host country’s legislation. This means you’ll still need some familiarity with the contract’s foreign law.
You will still need to set up a payment platform for foreign workers. Usually, this is done by international funds transfer services and banks. Some countries are open to international funds transfers, others need persuasion, and currency exchange fees are included.
3. Establishing a Legal Entity
To grasp foreign law, you might find yourself hiring a legal entity to guide you through the legal framework of hiring employees in a foreign country. A local legal team with vast experience in labor laws in different countries is ideal for smoothening the hiring process since they know all the hurdles to jump. A legal entity also saves you time filling out legal paperwork and speeds up hiring.
Legal counsel and assistance are not cheap. Hiring international employees is lengthy, and retaining a legal entity for an extended period may be very expensive. A legal entity will only cover matters regarding the law; you will still need to put in much time and effort to resolve other hiring affairs.
Global Employer of Record by Acumen International
An international workforce in a foreign market is an invaluable brand promotion and representation resource. However, the conventional hiring of foreign ambassadors is no longer effective; they present new problems requiring more resources. Innovations in international hiring services come from Global Employer of Record.
A Global Employer of Record (GEOR) is responsible for hiring and retaining a foreign workforce on your behalf. The company rendering such services covers hiring and employee upkeep, including payroll, amenities, and legal compliance for locals and ex-pats. GEOR eliminates the need for expensive infrastructure and additional human resources in legal counsel and agencies to hire and maintain employees in foreign countries.
The global Employer of Record contract is within the legal jurisdiction of your local country, which stays in favor of its citizens. GEO also reduces your exposure to misclassification risks.
At Acumen International, we provide a risk-free, fast, and reliable global employment solution. We are a Global Employer of Record, serving in over 180 countries and growing. We employ foreign workers on your behalf and take responsibility for their welfare. Our goal is to make it easy for businesses to expand to overseas markets by providing hassle-free, 100% compliant international employment services.
Call us for a free no-obligation consultation on our service to onboard your foreign workers.
Before we get into the cases where a company may prefer employees to contractors and vice versa, let’s first clarify; who is an employee, and who is a contractor. At some level, the two may appear to be similar since a company can opt for either an employee or a contractor to perform the same… Read more Employees VS independent contractors: what is the best fit for your business goals?
Before we get into the cases where a company may prefer employees to contractors and vice versa, let’s first clarify; who is an employee, and who is a contractor. At some level, the two may appear to be similar since a company can opt for either an employee or a contractor to perform the same duties; however, the two are entirely different entities from certain perspectives.
Key Differences Between Employees and Contractors
Here are some of the critical factors that set apart employees and contractors.
An employee is a long-term worker hired on either a full-time or a part-time basis and is answerable to the employer company. A contractor (also known as an independent contractor) is a self-employed laborer hired by a company on a contract basis to complete a specified task or series of tasks, usually within a given period.
Several enforceable employment and labor laws cover employees, both federal and state. Labor and employment laws do not cover an independent contractor. By law, employees have a right to certain benefits that should be provided by the employer such as insurance, housing, commute, and welfare depending on the state and job. Contractors have no right to any benefits.
An employee earns hourly, daily or monthly rates paid in wages or salaries. And reports all money paid for taxation in a W-2 form after every tax year. A contractor can be paid in periodic rates, at the beginning of the contract, or after completion and fulfillment of allocated task or contract. The contractor is at liberty to dictate payment schedules to the employer or is open to a mutual agreement with the employer regarding the same. A contractor reports earnings beyond 600 dollars on form 1099 every end of the calendar year.
An employee must adhere to a rigid work schedule stipulated by the employer in the job description. While a contractor, unless indicated in the contract statement, does not need to work on an employer’s schedule. The contractor only needs to focus on completion of the assigned task within the specified period. Employees are directly under the control of their employer; though, within legal reason. Employees must follow company rules and uphold its image. A contractor cannot be controlled by the employer and has little or no investment in the employer’s company image, mission or other jobs.
Both employee and contractor can be hired depending on merit and they both contribute to the company’s labor force. Depending on the company’s business needs in some instances it is better to hire contractors and in others the more permanent employees.
When to Hire Contractors?
The whole idea of contract workers is based around the premise that it is wasteful in both resources and time to hire employees for short-term or temporal one-off tasks. Short-term assignments are those that only take a short period to complete and mostly come around only once. Hiring short-term employees means setting up the entire infrastructure to accommodate fully entitled employees for only a short time.
This may work in local market. However, things may differ if you are hiring independent contractors overseas. Regardless of the duration of an assignment, penalties for employee misclassification are huge in some countries. This is without mentioning expatriate personnel that needs to be involved in short-term overseas projects. A foreigner needs to be officially employed in the host country so he is eligible to work there.
The choice between an employee and a contractor should be based on different factors when you are hiring locally and abroad.
These are mostly simple tasks requiring little or no supervision. An excellent contractor will have good work ethics and require little if any supervisor.
Contractors specialized in professional tasks requiring expertise, such as IT consultancy and security, come in handy in performing them on a contract arrangement. This saves on employee training and learning time.
Another case when hiring contractors may be advisable is work outside the central focus of business. Tasks that are not related to the primary objective or company mission emerge. Such duties are best assigned to hired contractors rather than employees.
When to Hire Employees
Employees are a more permanent solution to a company’s labor needs. Despite being more demanding than contractors, they are more reliable and easier to monitor and supervise. They also grow alongside the company and are deeply invested in its success, giving them an incentive to be productive.
Top Reasons for Converting FREELANCERS into FULL-TIME EMPLOYEES
Employees are mostly hired for performing:
Long-term tasks
Long-term tasks are the primary reason why there is a need for employees. Long-term tasks involve the core operations of a company or business. Tasks such as marketing, service, sales and production management are invaluable business operations. For such jobs, what is needed is a consistent and reliable workforce for everyday availability, which can only be achieved by hiring employees on a more permanent basis. Hiring contractors, in the long run, can prove to be expensive and have inconsistent results for lengthy tasks.
Talent retention, reinforcing companies’ talent pipelines
If a company has a long-term project and has a highly-skilled candidate, as a rule, it is willing to retain him. Employee status is more suitable than Contractor in this case. The company can provide an employee with all the benefits and equipment to motivate him, build a long-term relationship. Moreover, after the project termination the company has an official right to move the talent/an employee to another project within the company.
Work requiring close supervision and administrative collaboration
Crucial company operations require a close administrative handle. Such tasks need workers who can work closely with their superiors. Employees can easily be monitored closely, and their progress can be observed at regular intervals.
Recursive tasks
If a company has repetitive tasks that are separated by reasonable intervals, it may be economical to hire employees who will perform consistently every time.
The bottom line is, there are tasks only suitable for employees and others for contractors. In modern business models, it is increasingly becoming difficult to distinguish between the two. Most companies inevitably have to work with both contractors and employees; with contractors continually taking over workforces, in most cases easing access to valuable professional labor.
Remember in the States; the IRS considers every worker an employee unless they can be proven to be a contractor.
It is critical for an employer to correctly determine whether the individuals providing services are employees or independent contractors.
How You Avoid Misclassification Risks With Acumen International
Contractors are relatively less cumbersome and cheaper to hire compared to employees. Contractors have less social and resource demands. However, not all tasks can be assigned to contractors. It’s important for businesses to adapt to the rising trend of increasing contract workers in the labor force. Results from a recent study show that over 40% of the workforce in America is likely to be self-employed independent contractors by 2020.
Moving to and living in Poland requires you to get credible information on everything from simple matters like whether you can bring your pets to Poland, to more complex issues such as how to obtain a legal work permit for your wife at the Cracow local government. Understanding all the necessary information can be a… Read more What you need to know while onboarding expatriate workers in Poland
Moving to and living in Poland requires you to get credible information on everything from simple matters like whether you can bring your pets to Poland, to more complex issues such as how to obtain a legal work permit for your wife at the Cracow local government. Understanding all the necessary information can be a tedious, time-consuming and confusing process, especially for new expats.
Why is Poland economically attractive for expatriates?
Poland is strategically located in the heart of Europe and has a vibrant rapidly growing economy. Poland is the ninth-largest economy in Europe and has business-friendly opportunities and career options for expats. The country has become an attractive destination for multinational businesses from across the world who want to venture into one of the best-performing economies in Europe.
According to the World Bank’s Ease of Doing Business Survey for 2018, Poland’s business environment was ranked 27th out of the 190 countries that were surveyed at the time. The survey also concluded that Poland is number one in terms of ease of trading across borders and 22nd in resolving insolvency. When it comes to getting credit, it scored decent 29th position and 38th for registering property.
The procedure of receiving work permits
Poland allows the citizens of the EU, European Economic Area (EEA) countries (EU + Norway, Switzerland, Iceland and Liechtenstein) and members of their families to work in the country without any special work permit.
The following categories of foreign nationals are also exempt from the obligation to obtain a work permit:
Foreign nationals who have long-term EU resident status in Poland.
Foreign nationals with a settlement permit.
Refugees, people granted temporary protection and people granted “tolerated stay” status.
Representatives of other foreign nationals are released from the obligation to get a work permit under specific regulations.
If an individual is not a citizen of any of EEA countries or doesn’t fall into any of the above categories, he/she needs to apply for a work permit to legally conduct activities bringing him/her an income in Poland.
The immigration process of hiring and managing expatriates in Poland can be cumbersome. The procedure of getting a work permit to work as an expat in Poland takes from one to two months until entry into Poland. Additionally, it may take up to four months for the whole process to be completed.
The vital steps to getting a work permit in Poland are:
Application for an entry Visa
Entry to Poland
Application for a Blue Card.
The Blue Card is an EU-wide approved work permit allowing high-skilled non-EU citizens to work and live in any country within the European Union, excluding Denmark, Ireland and the United Kingdom. The applicant for a Blue Card must have a work contract or binding job offer with a salary of at least 1.5 times the average gross annual salary paid in the Member State. He/she should have a valid travel document (in specific cases a valid residence permit or a national long-term visa) and documents proving his/her relevant higher professional qualification.
In fact, your organization won’t be able to get an official work permit when hiring a foreign worker for the Polish market. That needs to be requested and sponsored by the worker’s future employer which should confirm the foreigner’s future employment. That is why in case a company needs to transfer an expat to Poland, contractual relations may not be enough and it will need to employ the worker as a full-time employee. The easiest and most risk-free way to do it is to outsource the services to the company that sponsors work permits. The company will act as the employer and provider of immigration services to the foreign worker. This will save the cost of setting up own business entity in the country to employ expatriate personnel.
Well, there is this easiest way for you.
As a global employment organization, Acumen International takes on responsibility for visa and work permit sponsorship for your expatriate personnel that we employ locally on your behalf after they’ve received a work permit in Poland. Acumen International has years of experience and the right expertise in helping businesses grow their international workforces. We offer a comprehensive solution that will manage all aspects of the well-being of your employees in Poland on your behalf to ensure that your company is compliant with local employment laws and regulations. This will give you an opportunity to focus on the management of your expatriate employees instead of wasting valuable time dealing with administrative affairs.
For more information on how to expand your company globally through Acumen International, contact us to discuss your specific needs with our knowledgeable team.
Expanding your business globally requires allocation of more resources and infrastructure. Working with diverse teams that are more innovative on the ground is smarter than relying on a homogenous team that is less productive. When your organization expands into foreign markets to boost productivity and increase sales, you will be compelled to hire and manage… Read more How International PEO Solution Can Help In Providing Vital Infrastructure To Foreign Employees
Expanding your business globally requires allocation of more resources and infrastructure. Working with diverse teams that are more innovative on the ground is smarter than relying on a homogenous team that is less productive. When your organization expands into foreign markets to boost productivity and increase sales, you will be compelled to hire and manage new employees who will be based in those markets.
The first step towards empowering your teams in foreign markets in an effective manner is to ensure the team is provided with everything they need. Employees in foreign markets need vital infrastructure and resources to run the business smoothly. Providing your employees with necessary infrastructure and sharing information is a rewarding management practice that will encourage them to take the initiative and be proactive in improving their performance.
According to their business goals companies may hire different types of global workforces: sales reps, IT talent and technical support specialists, each of them requiring a sufficient infrastructure to support their activities.
Imagine this: You need to rent an office for your sales team in a foreign market, provide them with laptops and cell phones, and organize car lease. The area sales managers whose job requires travelling to neighboring countries to grow sales in those markets will definitely incur additional business expenses you’ll need to handle. Another example: you have dispersed global IT teams in different countries which you also need to provide with housing, computers, special software, cell phones, reliable communication gadgets/systems, performance assessment tools and what not.
Moreover, to lure and retain top global IT talent, tech companies provide employees with the best possible benefits. For instance, Twitter provides three free meals per day and on-site acupuncture services. Facebook provides all inclusive food and beverages at the office, as well as on-site services for banking, dry cleaning, bike repair, hair care, gaming zones and leisure rooms. While not an in-office perk, one of the most popular benefits at Evernote is the twice-a-month house cleaning service employees have access to, while Pinterest provides employees with happy hours, game nights and watching movies.
Developing the skills of your employees; giving them the right resources, motivation, authority, growth opportunities; and encouraging them to be accountable for their actions will unearth their potentials and improve competencies.
If you’re looking for a seamless solution to provide infrastructure to your global employees, reach out to Acumen International today to learn how our solution can assist you expand quickly and smoothly.
Acumen International is an International PEO solution provider that supplies employees in foreign markets with the necessary infrastructure to enable them to perform their respective duties optimally. With us you can enjoy all the benefits that we provide on particular markets. We can actually employ the person, compensate him, administer all his business expenses and provide him with a substantial infrastructure.
Abbreviated to GEOR, a global employer of record is a third-party organization that onboards its clients’ foreign employees locally in their target countries using its global infrastructure. Employees acquired in this way (GEOR employees) are officially registered as employees of the GEOR company, which handles legislation, tax compliance, global payroll, expats’ work permits and… Read more What Is a Global Employer of Record?
Abbreviated to GEOR, a global employer of record is a third-party organization that onboards its clients’ foreign employees locally in their target countries using its global infrastructure.
Employees acquired in this way (GEOR employees) are officially registered as employees of the GEOR company, which handles legislation, tax compliance, global payroll, expats’ work permits and immigration support, and employment requirements. The actual employer maintains the substantive day-to-day working relationship with the global employee hired via a GEOR model.
The GEOR solution, also known as global employment outsourcing, allows companies to hire, compensate, and provide benefits to the talented foreign workforce that is key to their business. It helps them expand their business to (or operate in) an international market quickly, easily and with 100% compliance (for either compliance or convenience reasons).
GEOR acts as a legal and functional intermediary between the employer and foreign employee. It takes responsibility for the employee while leaving active employee management to the employer. International hiring processes are complicated and require detailed in-country legal and payroll logistics knowledge. The global employer of record takes up this challenge and handles all global HR issues on the client’s behalf.
Global Employer of Record Responsibilities
GEOR assumes more legal and financial responsibility for the employees, regardless of their country of residence and the number of employees under the agreement.
Unlike a local third-party employment service that would do that in one country (or a limited number of countries, or 190+ countries to meet your company’s global expansion needs), a global employer of record gets you covered anywhere in the world, which makes global employment outsourcing faster, easier, cheaper, and 100% compliant.
A global employer of record is responsible for the following tasks:
Comply with host country labour laws and regulations.
Facilitate acquiring of visas and work permits.
Offer advice to the employer on foreign labour laws.
Process legal work permits.
Provide a legislation entity for compliance with local payroll.
Why seek a global employer of record solution?
A company can enjoy several financial and legal benefits from working with a global employer of record. The GEOR replaces several separate entities that would alternatively handle foreign workforce employment. Before the advent of GEOR, companies struggled with foreign labor adjustments, resulting in the hiring of expensive legal counsel and having to create their own expensive legal entities in each county.
Here are some of the benefits a company with foreign labour can look forward to by deciding to use global employer of record solutions:
Work permits Immigration and visa processing.
Scrutiny and compliance with constantly volatile international immigration laws can be time-consuming and resource-wasting. GEOR is responsible for handling the processing of visas and work permits and meeting immigration laws and regulations. The global employer of record also ensures immigration compliance should changes be made while the employee is working locally.
No need to dive into country payroll nuances.
Payroll includes critical financial information such as deductible, tax and payable amounts.
A compliant payroll should accurately reflect these details according to set standards. In most cases, payroll is compliant with local standards for foreign employees. The GEOR handles payroll for the employer’s global employees eliminating the need to have different payroll interfaces for foreign employees on assignment or employment agreement.
No need for international branches and own international infrastructure setup
A different way to ensure compliance with foreign labour laws is to establish a subsidiary in a foreign country that complies with the country’s laws. This is a time-consuming, labor-intensive undertaking that would require expensive legal guidance. For most firms, this is not a viable option. The easiest solution is a GEOR service. The service takes care of all legal compliance, including work laws, to ensure legal foreign employment.
Single point of contact and consolidation of actions single unified invoicing and reporting
No matter how large your international workforce may grow or how many countries they are in, your global employment outsourcing efforts can be much more successful and compliant through the use of a Global Employer of Record solution.
Even if your global employment outsourcing efforts involve one hundred team members in one hundred different countries, your global employer of record provider will handle them all in one place.
A global employer of record is the easiest and fastest way to venture into international markets by hiring foreign sales teams or to utilize and reward top foreign talent who is instrumental in growing your business.
When considering other available alternatives, the advantages of using a global employer of record are overwhelming. GEOR reduces the company’s liabilities and exposures to misclassification risks and legal resources in the hiring process.
The main benefit apart from being a single access point to foreign labour is the time and cost savings along with 100% compliance.
Use the easy button for your global employment outsourcing initiatives, and use a global employer of record solution.
Multinational companies are often seen engaging self-employed contractors for their foreign-based business as opposed to hiring full-time employees for seemingly cost-effective reasons. By hiring a foreign independent contractor, a company escapes the responsibility of fulfilling financial-based employee benefits like health-care, sick leave, paid vacations and retirement benefits. However, the long-term sanctions that come with foreign… Read more Turning Foreign Self-Employed Contractors into Foreign Employees is Good for Business
Multinational companies are often seen engaging self-employed contractors for their foreign-based business as opposed to hiring full-time employees for seemingly cost-effective reasons. By hiring a foreign independent contractor, a company escapes the responsibility of fulfilling financial-based employee benefits like health-care, sick leave, paid vacations and retirement benefits.
However, the long-term sanctions that come with foreign independent contractors are exponentially larger than any amount that the company may end up saving.
Some of these risks include but are not limited to the following:
Owing to decreased organizational authority and absence of company culture, the contractor may not feel part of the team and may withhold necessary or valuable information.
Loss of intellectual property that the contractor takes with themselves when they decide to leave or the contract ends
Low employee retention owing to the fact that a contractor is not obligated to stay with the company, which forces the company to make replacements continuously. This includes time and efforts invested in advertising, interviewing, screening, hiring and onboarding the new worker.
Losing top IT talent means losing an edge over your competitors.
The legal hassles and penalties that may result when a contractor claims for employee benefits.
The Misclassification of Employees Lawsuits: Financial Costs
Misclassification of employees as independent contractors and vice versa is perhaps the riskiest outcome, especially for multinational companies in a foreign land who are unfamiliar with the domestic legal systems. This process gets complicated by the involvement of legislation of more than one country, both of which may have distinctive customary practices.
Additionally, while it is clear what IRS’s six standards for classification of independent contractors are, another country’s standards may be entirely different and may include additional expensive grounds like mandatory thirteen-month pay, mandatory bonuses and contributions to unemployment funds. Some countries impose fines along with withholding tax in cases of mislabeling.
Switching to Full-time Foreign Employees Ensures Full HR Compliance
While turning self-employed independent contractors into employees initially increases the costs by an approximate of 30% (Steve Santiago, 2009), the aggregate increase in labor cost is exponentially lower because of employee retention and efficiently trained staff. (Biz Carson, 2015)
Additionally, a long-term staff allows better business growth as opposed to short-term contractors for the following reasons.
Full-time employees devote full-time to the company’s project as opposed to part-time contractors.
There is decreased staff turnover and higher employee retention.
A business needs loyal ‘on-deck’ workers and a dedicated team of professionals to carry the tasks forward.
Business longevity is directly linked with the fluidity with which employees can climb up the corporate ladder; something that gets hard to gauge with independent contractors.
Businesses are better prepared for when someone unexpectedly resigns when it has a group of well-trained all-encompassing individuals, as opposed to contractors that are not as fully immersed.
Hiring employees creates a company culture where everyone works as a team towards the same goal, as opposed to working with off-site and inconsistent contractors.
Hiring full-time global employees will not just reduce the prolonged monetary costs but increase employee retention and engagement, ensure full legal and HR compliance and consequentially protect your business against various risks and exposures linked with global hiring.
The Solution
Global Professional Employer Organization (PEO) Services can effectively help your multi-national company transition from self-employed foreign contractors to foreign employees with the minimum risks possible. Global PEOs can help your business through the following crucial steps:
Successfully switching to full-time, consistent and long-term foreign employees as opposed to foreign independent contractors.
Providing compliance with domestic labor and employment laws, familiarity with the legal system and official nitty-gritty.
Helping your business attract foreign IT professionals seeking stability and security of employment
Aid your company in getting in touch with global IT talent in a fully compliant manner and retain them long-term, thus reducing employee turnover and increasing employee engagement.
Making sure that your company’s intellectual property remains within the company.
Allowing the company to make more profits because of their trained set of individuals that have a shared
knowledge of the goals, and hence can easily transition from project to project.
As you can see, the positive aspects of utilizing a Global PEO that understands and complies with the laws and labor regulations of more than 180 countries without challenge. Additionally, securing global talent in a new market is pain-free and a seamless entrance into new countries, avoiding the pitfalls of both non-resident status, but HR concerns as well.
We are pleased to announce that Nick Ganzha, the Founder and CEO of Acumen International has managed to become one of the 40 semi-finalists of the Virgin VOOM Competition 2018.
He was invited to pitch the Global Employer of Record solution at the Virgin VOOM Semi-Final on May 21st in Manchester, UK
The Virgin VOOM Competition is an annual event organized and held by VIRGIN MEDIA BUSINESS network with the purpose of attracting both startup and established UK-based businesses to pitch their business ideas to Richard Branson at the Grand Final and compete for a share of more than €1m in prizes in Virgin VOOM Award prizes.
Acumen International’s new informative video segment appeared on US TV in Modern Business with Kevin Harrington, the original Shark from hit reality series Shark Tank. The first broadcast took place on WAXN-TV in Charlotte, NC, November 25, 2018.
