Borderless talent will be important in driving a recovering economy

Breaking down borders and recruiting talent in new jurisdictions can help a business grow, find new markets and overcome talent shortages.

A relatively short-lived recession, resilient housing market, trade and service industries experiencing exceptional demand in late 2020 and into 2021; there is plenty of optimism.

With a federal budget now delivered that focuses very heavily on economic recovery, many organisations are returning to growth and seeking to shore up their future.

Australia needs borderless talent

Of the jobs considered most in-demand, there is a strong weighting towards those that deal with project delivery, and an equal focus on business operations.

However, supply in Australia will not necessarily match demand in coming months and years.

Australian PM Scott Morrison identified the workforce skills shortage as the ‘single biggest challenge facing the Australian economy’ as the country recovers from the global pandemic.

The rapid shift from traditional workplaces to a remote and hybrid workplaces has broken down many barriers and is a catalyst for shifting the nation to globalisation of the workforce.

Whereas in the past there was significant resistance to the idea of moving a workforce away from the office environment, employers are now embracing it.

As reported by Hays in their Salary Report 2021, more than 70% of Australians see remote work conditions as their number one priority for future employment contracts.

With a looming skills gap in the country, it makes a lot of sense to address this by broadening the talent market. As well as educating and reskilling employees, organisations ought to look towards finding what they need in regional areas, or even in other countries.

Like the organisational barriers that existed around sustaining a remote workforce, the barriers to finding and keeping talent in other jurisdictions have also been lowered.

Whereas previously, the process of on-boarding talent in a new country was time consuming and difficult, working with an Employer of Record (EOR) has changed the game significantly giving companies the ability to hire remote global talent anywhere quickly and easily.

What is an Employer of Record ?

When expanding internationally or finding talent in other jurisdictions, a business has traditionally needed to set up a legal entity for each country. Individual jurisdictions each have their own unique requirements for tax compliance, payroll, insurance and HR.

In order to be compliant, all employees are required to be brought on board under the governance of their individual country’s employee compliance regulations and laws.

This can slow down an organisation’s talent procurement plans, and provide obstacles to fulfilling critical roles. However, in the modern business world, better options are available.

Setting up a legal entity in a new market to find and hire talent is no longer a necessity. New options negate many of the hurdles traditionally associated with the process.

An Employer of Record (EOR) allows an organisation to set up a legally compliant employee in a matter of days, if not hours. The employee, once onboarded, is listed on the payroll of the EOR, with all local tax, legal and insurance compliance fully taken care of.

This negates many issues that may be holding companies back from looking in other regions for the talent they need. A project manager perfect for an emerging role might be found in Singapore for example, and on-boarded within minutes.

Similarly, staff can be hired through an EOR platform from regional parts of Australia, with all contractual obligations and legal compliance taken care of through the EOR.

Note that EOR models are not equal. Not all EOR platforms allow this speed and compliance.

An aggregator EOR will outsource the hiring of employees, and rely on third parties, serving as an umbrella organisation that sub-contracts rather than taking full ownership of all the legal and compliance aspects that need to be safely covered in each country.

EORs that own global legal infrastructure take responsibility for employee contracts.

IP flows either directly to your company, or via your EOR to your company, whichever is most enforceable by law, so it is worth determining your preferred model before moving forward.

Emerging data suggests that the pandemic will drive more globalisation rather than reduce it. Companies need to look at borderless talent as a means to finding staff for critical roles.

Only by educating and reskilling, activating regional areas to identify talent, and expanding the talent pool by opening up virtual borders will Australia address the needs of growing organisations, and ensure a stable economy long-term.

Borderless talent therefore is a critical piece of the puzzle.

Charles H. Ferguson is the general manager of Globalization Partners‘ business in Asia Pacific, responsible for establishing scale by driving business expansion, as well as that of his clients, in dynamic global markets.