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1、The Global Employer of Record Report2023How Employer of Record Solutions are Transforming the Future of WorkA letter from our Founder and EOR Visionary LeaderPrior to the pandemic,the typical work routine involved a structured workweek,with most individuals commuting to an office on a regular basis.
2、However,the emergence of COVID-19 swiftly altered this.Those fortunate enough to have the option began working from home,setting up their laptops in various parts of their residences.Thanks to technological advancements,we remained connected and productive.Even as COVID-19 transitions from a pandemi
3、c to an endemic and the world presents new challenges such as the Russia/Ukraine war and widespread economic instability,employers find themselves striving to strike the right balance for their businesses.This includes exploring fully remote work arrangements or adopting flexible hybrid plans.The pr
4、evailing economic uncertainty compels employers of all sizes to reevaluate their approaches to expanding their markets and securing talented individuals.The ones who can swiftly adapt and exhibit flexibility will be the most prosperous.In order to remain competitive,it is imperative for all companie
5、s to devise an international expansion strategy.Even small businesses must decide which markets to enter and the extent of their involvement.In the past,the talent pool was limited to a few hundred individuals.However,with the obsolescence of pre-pandemic norms,employers now have the opportunity to
6、tap into the vast global talent pool comprising billions of potential candidates.This has facilitated expansion across borders in ways that were previously unimaginable.Effectively accessing this talent and successfully venturing into new markets necessitates a nimble and adaptable partner capable o
7、f navigating local laws and regulations,both domestically and internationally.This is where the Employer of Record(EOR)solution comes into play.It offers businesses of all sizes the flexibility to expand into new markets and swiftly recruit top global talent.By simplifying the complexities of global
8、 expansion,an EOR provides comprehensive HR services tailored to meet the requirements of local labor laws in each jurisdiction where a company establishes its presence.While EOR is still emerging as a concept,it is quickly becoming the go-to solution for businesses aiming to redefine themselves and
9、 thrive in a rapidly changing world.In the following report,we delve into the transformations and obstacles faced by employers today,while also exploring solutions for both the present and future.Rick Hammell Founder and CEO of AtlasThe Global Employer of Record Report:20232Table of ContentsThe Curr
10、ent Global Landscape for HR Decision Makers 4Employer of Record A Modern Solution for Modern Business 7HR Trends and the Future of Work 12Streamlining Costs Through an EOR Service Provider 19How EOR Supports Payroll Functions 21Emerging Trends:What HR Decision Makers Need to Consider in the Next 12
11、Months 24A Regional Look at Work Trends and EOR Adoption:28 Africa and Middle East 29 Asia and Pacific 30 Europe 31 Latin America 32 North America 33The Global Employer of Record Report:20233The current economic landscape is unlike any that weve experienced in recent history.A host of complex and mu
12、lti-faceted issues have combined on an international level to create a challenging environment for businesses to thrive in.From the longtail effects of the COVID-19 pandemic to the ongoing conflict in Ukraine,rising inflation and rising interest rates mean that the next 12 months have never looked s
13、o uncertain.And uncertainty is not good for business.Since the start of 2023,companies of all sizes have significantly reduced their headcounts as the heady days of the pandemic rally fade into memory.According to layoffs.fyi,the running total for job cuts in the tech industry alone for 2023 is more
14、 than 212,000 at time of writing,with the likes of Microsoft,Amazon,and Meta all laying off thousands of workers in recent months.According to Chris Cavanagh,general partner at Guidepost Growth Equity,the era of“growth at all costs”has ended.I think we went through a period of time where it was kind
15、 of growth at all costs and organizations could be growing 80 or 100%year over year,but if they were losing significant sums,no one really cared.Now there is a very big focus around that,so cost management and containment,I think is a critical area of focus for organizations.”Chris Cavanagh,Guidepos
16、t Growth Equity We have now entered a new phase where the biggest concerns for companies are profitability while containing costs and,above all else,survival.Layoffs arent the only route that companies are taking to cut back on costs.Downsizing real estate,reducing business travel,and increasing use
17、 of variable staffing models are all tactics companies are using to hunker down during the potential economic contraction of 2023.The HR Perspective While the headline for many businesses at the moment is reducing costs,HR decision makers are facing more unique challenges.Artificial intelligence(AI)
18、and automation technologies,for example,require talent with skills that are hard to define and constantly evolving.Despite the media frenzy over global layoffs,almost all industries face real talent shortages.The 2023 WEF Future of Jobs Report found that more than half of employers indicated difficu
19、lty in solving their skills gaps locally,and this inability to attract talent is one of the primary barriers to transforming their businesses to remain competitive.If that wasnt enough,retaining top talent appears to be even more difficult.The recent media hubbub about the“quiet quitting”crisis is n
20、ot without basis a recent Gallup survey indicates that at least half of the U.S.workforce is performing at the bare minimum expected of them in their roles.This does not infer a lazy or disinterested workforce.Instead,it highlights the unique challenges presented by the modern workplace where remote
21、 or hybrid work has become the norm,job uncertainty is at an all-time high,and expectations from management are becoming less obvious.The Current Global Landscape for HR Decision Makers01The Global Employer of Record Report:20234The overall decline in engagement was especially related to clarity of
22、expectations,opportunities to learn and grow,feeling cared about,and a connection to the organizations mission or purpose signaling a growing disconnect between employees and their employers.”Gallup,Is Quiet Quitting Real?The new world of remote working plays a major role in this.The ability to work
23、 from anywhere one of the few benefits of the COVID-19 pandemic for many workers now appears to be under attack in certain industries like technology and financial services.Indeed,while some predicted the end of the traditional office,mid-2023 saw a large-scale return.As reported in the Wall Street
24、Journal,office occupancy rates in some parts of Asia ranged from 80%to 110%by February,meaning more people were in the office than before the pandemic.EMEA and North America are now also looking at 80%office occupancy.However,workers remain resistant.According to Gallup research,six out of 10 U.S.-b
25、ased employees with remote-capable jobs want a hybrid work relationship.Of those surveyed,one-third prefer fully remote work,and fewer than 10%want to work on-site.Top Challenges for HR Decision Makers in 2023:Talent Shortages Employee Engagement Reducing BudgetIn addition,50%of major global compani
26、es expect to cut office space by 10%to 20%because it remains empty.The global landscape has altered since the start of the pandemic,and the growing pains are real.The future of work is here.The Global Employer of Record Report:20235The Future of Work and the Employer of RecordBusinesses are faced wi
27、th many competing priorities from the top down.On the one hand,cost containment and a focus on profitability over growth is the driving force behind most business decisions in 2023.On the other hand,the inability to access and retain top quality talent in the rapidly shifting global labor market thr
28、eatens an organizations ability to rebound and make its mark on the next decade of innovation.In the midst of every crisis comes great opportunity.In the 2023 climate of economic uncertainty,the business leaders including their senior human resource officers(SHROs)and other HR professionals who adop
29、t new ways of working and attract the greatest talent will be the ones to prosper in the coming decade.In particular,the nascent Employer of Record(EOR)industry and its increasing integration into wider HR functions offers great opportunities for maximizing business potential.Modern organizations cu
30、rrently face a headwind of continued economic,geopolitical,environmental,and technological disruption.Conversely,the same technological disruption is expected to provide a tailwind of potential,unlike anything humanity has experienced.”Pete Tiliakos,GxT AdvisorsThe Global Employer of Record Report:2
31、0236Now,more than ever,organizations of every size must become highly agile,adaptive,and resilient by design to fulfill their strategic ambitions and as a means of competitive advantage and survival.“Pivot or perish”has never been more meaningful than in the current and future global marketplace.”Pe
32、te Tiliakos,GxT AdvisorsAs modern organizations look for ways to become more resilient to an ever-shifting business and labor landscape,Employer of Record(EOR)service providers are growing in popularity.What is an Employer of Record(EOR)Service?An EOR service provider allows an organization to hire
33、employees in a country or jurisdiction where they dont have an existing entity.The EOR acts as the legal employer of the worker or workers in question,assuming responsibility for onboarding,offboarding,and payroll on the clients behalf.As the employer,the EOR partner manages the legal,HR,tax and loc
34、al compliance needs for the workers as its own employees,while the client organization maintains full control of their day-to-day work.Why Use an EOR Service Provider?With the competing priorities of reducing costs while continuing to grow and access the best talent globally,most EOR services provid
35、ers offer immediate benefits to an organization.An EOR service provider increases a companys operational agility by giving it:the ability to quickly enter new markets across the globe by acting as the employer and providing visa and global mobility support to relocate managers and workers,a low cost
36、,low commitment alternative to forming local business entities to implement global expansion plans,the ability to secure global talent and improve employee experience by employing employees in their home countries,and the ability to quickly hire employees in a carve-out divestiture and save an M&A d
37、eal.EOR service providers support business efforts in foreign markets by employing workers in compliance with local law.Many offer a platform solution that centralizes HR and payroll,and which is easily accessed by the client business as well as the employees.Employer of Record A Modern Solution for
38、 Modern Business02The Global Employer of Record Report:20237Direct EORA direct EOR service provider has a business entity established in the country where employees are hired and uses no third-party vendors to assist in providing services to the client.Indirect EORAn indirect EOR service provider do
39、es not have an entity in a country,even though it offers EOR services there.Instead,it relies on in-country vendors of HR,tax,accounting and legal services to manage services and compliance.Hybrid EORA hybrid EOR service provider offers a mix of both direct and indirect EOR services to its clients.D
40、ifferent Types of EOR ServicesCurrently,there are three distinct types of EOR service providers:The Global Employer of Record Report:20238A Rapidly Growing Market and Industry The EOR market is young but growing rapidly.According to a recent IEC report,the global market size of the EOR industry sits
41、 at USD 4.8 billion in 2023.This is expected to grow at a compound annual growth rate(CAGR)of 16.7%to hit close to USD 10 billion by 2028.Employer of Record Global Market Size&Growth RateThe EOR Market sees a CAGR of 16,7%and will grow to 9,8 Billion US$by the year 2028Source:The IEC Group IEC EOR S
42、tudy 2023 Sneak Preview|The IEC Group12.00010.0002.45023%29%24%21%19%15%12%10%8%3.0143.8874.8205.8336.9417.9828.940Billion US$;9.8348.0006.0004.0002.00020202022420252026202720280The Global Employer of Record Report:20239Either way,its clear that EOR services is recognized as a high growth
43、 industry that is gaining traction across many regions and use cases.Historically,this growth has been fueled by companies based in North America,which make up 50%of the global market,according to reports by both the IEC Group and NelsonHall.Europe and the Middle East together comprise about 28%of t
44、he adopter market.While Europe and the Asia Pacific regions are expected to take greater shares of the market due to the expansion plans of multinational companies,Latin American headquartered companies have been making a good showing in 2023.Small to mid-size businesses are the biggest market for E
45、OR service providers.Global EOR Services:Adoption by Client Organization Size(#of Employees)EOR providers market size Net revenue in US$millionBroader NelsonHall research finds smaller market buyers continue to seek and adopt global capabilities as well as maturing their HM technology infrastructure
46、 in line with upmarket peers.Impacts from“the great resignation”and post-pandemic formalization of remote work policies and norms further influence the application of an EOR model.Large(15k)Mid(500-15k)Small(500)Source:NelsonHall,Global Employer of Record(EOR)Services HR Technology and Services Prog
47、ram,August 2022Source:Everest Group7%26%67%Everest Group,meanwhile,estimates that the current EOR market is smaller at around USD 1.5 to 1.6 billion,but predicts rapid growth of between 30%to 40%throughout this year.160-170%2-5501,150-1,1701,560-1,6503,150-3,40020212022E2023E2025E110-12
48、0%30-40%40-50%Actual growth rateExpected growthThe Global Employer of Record Report:202310Use Cases of EOR ServicesWhile most EORs are predominantly used by organizations for the services they provide,the future of EOR lies in its tech-supported HR capabilities that cater to all aspects of HR compli
49、ance across all countries where the EOR operates a“one stop shop,”according to a recent NelsonHall report.This tech can give HR teams insight into all aspects of the employees that the EOR manages on its behalf,allowing the customer-service relationship between the EOR and customers to focus on besp
50、oke,high-level consulting and more meaningful service.EOR tech is also expected to become more cloud-based and offer personalized dashboards for clients and employees,standard and ad hoc reporting,data and predictive analytics to manage costs and monitor trends,API integration with other key busines
51、s technologies,and strong cybersecurity credentials.NelsonHall gives weight to client priorities when it comes to the global capabilities of EOR service providers.But,for now,lets look at how organizations are using EOR service providers to overcome the challenges of the modern workplace.CHROs of an
52、 agile organization should look to complement existing HCM investments and resources to solve the volatility and marketplace dynamics,drive organizational agility,and enable material competitive advantage for their businesses.The global EOR model should be a go-to lever for enabling their talent dem
53、ands and driving impactful business outcomes.”Pete Tiliakos,GxT Advisors Buyers were asked to share the key operational priorities associated with global Employer of Record services for their businesses moving forwardImportance of Characteristics within Transformed EOR OperationsAgility of HR in sup
54、porting future multi-country expansion initiatives Access to a Center of Expertise(COE)staffed with skilled,in country subject matter experts Digitalization of multi-country HR and payroll processes through cloud,mobile ESS/MSs,integrations,etc.Consolidated analytic reporting and insights for improv
55、ed decision making Leveraging of intelligent technology in multi-country HR and payroll delivery Digital marketplace of certified integrations(APIs)to address unique business requirements14.74.64.13.632.92345Source:NelsonHall,Global Employer of Record(EOR)Services HR Technology and Services Program,
56、August 2022The Global Employer of Record Report:202311Automation in the workplace is nothing new but recent developments in AI namely large language model(LLM)generative AI such as ChatGPT will revolutionize technology and alter the labor landscape.Jobs based on repetitive tasks appear under threat,
57、while roles that leverage these new technologies,some of which dont even exist yet,will fill future job boards and recruiter email inboxes.Employers are looking at skills gaps and talent shortages in 2023,but the competition for talent is likely to become fiercer in the coming years as the possibili
58、ties of these generative AI tools unfold.The World Economic Forum predicts in its 2023 Future of Jobs report that many industries expect a high level of job churn over the next five years,with some roles disappearing completely and new roles with new skill requirements emerging.Based on the reports
59、data,we may see“structural job growth of 69 million jobs and a decline of 83 million jobs.”Also,according to the report,by 2027,automation will result in 26 million fewer jobs in recordkeeping and administrative roles.The accuracy of this prediction remains to be seen,but companies clearly anticipat
60、e replacing some of the more manual tasks with technology as quickly as they can.Skills that are particularly susceptible to automation over the next 3 years:Data Entry Manual Analytical Thinking HRIS Business Analytics Analysis Human Resources Administrative Data Analytics Technical Customer Servic
61、e Finance Accounting Land Administration Market Research Coaching Source:Mercer Future Skills Survey ReportHowever,most experts agree that AI doesnt pose a risk to highly skilled jobs just yet.In fact,the dawn of AI might increase the demand for top talent that can use and enhance productivity throu
62、gh new AI tools.Technology should augment,guide,and predict to elevate and empower human talent and creativity.The goal should be a symbiotic relationship between technology and human that augments and amplifies the rich,unmatched human skill and emotional intelligence of an organizations people,arm
63、ing them with the nudges,cues,and insights to drive improved business outcomes for their employers.”Pete Tiliakos,GxT AdvisorsHR Trends and the Future of Work 03The Global Employer of Record Report:202312Self-managementBusiness acumenPersuasion and negotiation skillsSales skillsTransdisciplinary thi
64、nkingMarket sensing/empathyEmotional intelligenceDigital dexterity/fluencyCreativity,originality and initiativeDeveloping peopleResilience and flexibilityGrowth mindsetCollaborationProduct innovation and adaptionAnalytical thinking/problem solvingInternal political influence/networkingDemand for Hig
65、hly Skilled Workers Despite some global choppiness over the course of the pandemic when some industries thrived and expanded while others experienced mass layoffs and furloughs the global demand for highly-skilled talent grows.Underperforming Skill Score Developing people-0.0Overperforming Skill Sco
66、re Market sensing/empathy 0.7 Persuasion&negotiation skills 1.0 Self-management.1.1 Internal political influence/networking 1.2 Sales skills 1.2Gap Analysis Matrix-confidence in being able to meet needs by the end of 2024 for each skillSource:Mercer Future Skills Survey Report ConfidenceThe Global E
67、mployer of Record Report:202313In a recent survey of HR decision makers across the UK,UAE,Singapore,Australia,and the USA,Atlas found that 8 in 10(82%)of companies agree that recent global layoffs have made them consider expanding into new markets for the right talent.This is especially the case for
68、 companies in Singapore(90%)and UAE(83%).This is backed up by a separate survey on borderless hiring trends,conducted in conjunction with Atlas,where People Matters found that 64%of the companies surveyed noted that they were expanding their business operations globally.Furthermore,nearly 86%of the
69、respondents said that they were looking for middle-level talent globally,indicating the high competition for experienced and skilled workers.Which level of employees are you looking to hire?Senior Management 45%Middle Management 86%Entry-level 59%With the world of work going borderless post-pandemic
70、,how many countries has your organisation expanded its business operations to?2-5 countriesNone6-10 countriesOne countryMore than 1036%14%32%13%5%Source:Borderless Hiring:Trends Reshaping the World of Work,People Matters Source:Borderless Hiring:Trends Reshaping the World of Work,People Matters The
71、Global Employer of Record Report:202314Interestingly,the respondents to the same survey identified in-country compliance as the biggest challenge to these global ambitions,with almost half of those surveyed citing it as a major roadblock to their global expansion plans.Compliance with in-country emp
72、loyment,HR and taxation lawsCultural challengesEntity and payrollGlobal mobility and VisaRecruitment issuesAccording to you,what is the one big HR roadblock that is stopping your organisation from global expansion?This is one of the main reasons why many organizations are turning to EOR services as
73、an agile solution to access the global workforce.Over half(52%)of companies surveyed by Atlas said that they struggle with finding the right talent when entering and hiring in a new geographic market.According to People Matter,meanwhile,a majority of employers are looking for a service provider or p
74、artner to engage and hire the best talent,while only 35%of the companies said they would invest their own capital and time in hiring borderless talent.I think organizations have woken up to the fact that if you got demand from clients outside of your headquarter country,youre probably going to need
75、boots on the ground to really enable that and service that capability.”Chris Cavanagh,Guidepost Growth Equity15%14%13%10%49%How do you intend to execute/have executed your global expansion?Source:Borderless Hiring:Trends Reshaping the World of Work,People Matters Source:Borderless Hiring:Trends Resh
76、aping the World of Work,People Matters Setting up your own local entity,which requires a significant amount of capital,time,and workforceHR Service,which enables speed to market and empowers onboarding&paying a remote employee business compliant with local laws65%35%The Global Employer of Record Rep
77、ort:202315Retaining Talent The cost of hiring a new employee is many times higher than the cost of keeping one.However,in the current global climate,where there is a distinct shortage of skilled workers across many key sectors and geographies,we can assume that the cost of losing an employee has bec
78、ome much greater.The pandemic forever altered the way people work,as well as where they work.The so-called“sansdemic”defined as the talent shortage that is quickening as older generations retire and fewer individuals from younger generations enter the workforce has meant that employees now have sign
79、ificant leverage over their employer regarding the terms of their work.The resulting landscape has changed HR professional priorities when it comes to keeping skilled talent.As always,compensation remains the number one factor in retaining the best workers,but HR professionals also need to focus on
80、tactics that enact a flexible future of work strategy,including:remote,hybrid,and flexible working policies,internal learning and development training for upskilling,and commitment to DEI(Diversity,Equity,and Inclusion)initiatives.Gartner believes that the things HR leaders and professionals will fo
81、cus on in 2023 will all be in service to changing norms and the future of work.They will focus on HR strategy,looking for ways to increase efficiency and improve operational capability.These goals align strongly with cost containment and a focus on profitability,but also with hiring and keeping the
82、best talent.Of course,a good HR strategy considers employees needs in balance with business needs.HR professionals will also focus in 2023 on creating a productive,flourishing hybrid workforce.This will require training managers to have skills needed to effectively manage such a workforce including
83、empathy,authenticity,and the ability to adapt.A related focus for HR professionals is mental health and well-being.Digital Nomads Attracting and keeping talent might mean employing a worker who is a digital nomad.Digital nomads take remote work and global mobility to the next level,traveling and wor
84、king around the world by taking advantage of digital nomad visas in places like Portugal,Greece,and Dubai.Many are freelancers,but demand is growing from employees that want this lifestyle while working for one employer.Companies focused on employee experience and building a robust Future of Work st
85、rategy can offer visa support and clear policies to employees who want to become digital nomads.An EOR service provider can guide on visa support for these traveling remote workers,and,if a digital nomad decides to put roots down someplace,simplify that decision for everyone by taking on the role of
86、 local employer.The Global Employer of Record Report:202316Hiring and Managing a Remote or Hybrid Workforce With a potential split emerging between employees and employers on where the future of work will take place,it would serve all organizations well to have HR strategies in place for facilitatin
87、g in-office,remote,and hybrid working arrangements.Make no mistake while employees might return to the office in some regions and industries,the future of work embraces flexibility,especially around remote work and building a global remote workforce.First,global remote work is an essential tactic in
88、 any Future of Work strategy thats dedicated to accessing the widest pool of talent and moving fast into new markets.Second,remote work saves companies money by fundamentally reducing overhead expenses.Finally,despite return-to-office pressures in some sectors,employees have an upper hand in todays
89、tight labor market.Remote work has proven productive,and it may be the best way to avoid another so-called Great Resignation.Small-and medium-sized firms looking for creative ways to bring in premium talent and enter new markets may be best poised to benefit from this new world of work,and these nim
90、ble companies are increasingly leveraging EOR services to achieve their expansion goals.Six out of 10 U.S.-based employees with remote-capable jobs want a hybrid work relationship,according to Gallup research.Of those surveyed,one-third prefer fully remote work and fewer than 10%want to work on-site
91、.Surveys by both Mercer and EY report that companies recognize the benefits of remote work from both a cost and talent perspective and are adopting Future of Work strategies that move jobs to people.Work Locations for Remote-Capable JobsNote:Due to rounding,totals may not sum to 100%.Source:State of
92、 the Global Workplace 2023 Report,GallupExclusively remoteHybrid(=10%to 100%remote)On-siteAmong US.employeesPre-Pandemic 2019February 2023Expected Future Location(as of Feb.2023)Preferred Location (as of Feb.2023)February 202232%8%39%28%26%33%54%60%21%7%52%20%42%19%60%The Global Employer of Record R
93、eport:202317I do believe that flexible work arrangements will continue to be more mainstream,but I think its going to be really important for organizations to have more off-sites as a way to build culture and really ensure alignment because,ultimately,having those conversations in person are in many
94、 ways a requirement to really get everybody on board.”Chris Cavanagh,Guidepost Growth EquityFully remote may not work for everyone,but there are distinct advantages to flexibility,including a deeper and more loyal talent pool.Hybrid and flexible work models that maintained strong connections between
95、 managers and employees proved to be a strong common ground for the winners in Gallups 2022 Exceptional Workplace awards.Of course,there is also the important aspect of diversity,equity,and inclusion(DEI)to consider.Perhaps the greatest beneficiaries of remote work are people with disabilities.In th
96、e U.S.,for instance,a recent New York Times report revealed that the share of those with a disability who are employed has increased by more than 12%since the start of the pandemic.Several factors are contributing to this boon,one being the ability to work from home.Remote work can be especially acc
97、ommodating to individuals with disabilities and requiring an in-office presence can potentially deter disabled applicants.The positives of remote work can also help people with non-visible disabilities,including those with social anxieties or who prefer working alternative hours,perhaps outside the
98、in-office 9-to-5 expectation.On top of this,half of all employees with disabilities are 65 and older,some of whom may also benefit from not having to commute to and from work daily.The Global Employer of Record Report:202318Cost management and containment is high on the list of priorities for all wo
99、rkers at the moment.The uncertainty that runs through almost all international and domestic markets has meant that companies are battening down the hatches,remaining cautious on spending and growth plans for the time being.But a strong need remains for highly skilled talent and maintaining growth.Al
100、so,despite the lurking shadow of possible recession,organizations and investors remain optimistic about the near-term future.Over the next 12 months,I think theres real optimism that were going to put a lot of this uncertainty behind us.”Chris Cavanagh,Guidepost Growth Equity So how do organizations
101、 manage the seemingly conflicting priorities of cost management and maintaining growth?HR Strategy:How Companies Grow on a Tight Budget Business leaders who see growth opportunities are now looking to the HR leaders to help solve issues.In their relatively recent move to executive leadership,HR prof
102、essionals are spending more time on strategy to build workforces that focus not only on employee satisfaction and productivity,but that meet growth and profit goals.As part of this HR strategy,HR leaders need to bring solutions that support operational capability but,in our current economic climate,
103、account for tighter hiring budgets than the past few years.Expanding Without a Business Entity A common tactic for moving into new markets is setting up a new legal entity.But this option comes with financial and legal risk as well as compliance hurdles that can be costly and time-consuming.Dependin
104、g on the country,a company may have to hire a local professional to register the new local entity or branch,deal with multiple government agencies,lengthy approval periods and unpredictable delays,translate and notarize incorporation documents even at the parent company level,prepare board resolutio
105、ns,hire a local manager or company representative,or lease office space.Once a subsidiary or branch office is ready to operate,it must then comply with local labor laws,visa and immigration laws,tax laws,data and privacy laws,financial accounting rules,and corporate maintenance laws.The potential fo
106、r liability in a new country is broad,and the company must pay local advisors to navigate the literal foreign legal landscape and ensure compliance.In recent surveying,Atlas found that keeping track of changing regulations across multiple jurisdictions is particularly challenging for companies(63%)w
107、hen staying up to date with evolving employment regulations and HR policies.Streamlining Costs Through an EOR Service Provider 04The Global Employer of Record Report:202319The Global Employer of Record Report:2023In addition to this,three in five(60%)of the international organizations surveyed also
108、found it particularly challenging to ensure compliance with local regulations.A flexible future of work strategy would consider partnering with an EOR when exploring new markets.An EOR can also get people hired fast to provide services to eager new customers in a new country.An HR strategy that embr
109、aces EOR services can drive operational capability effectively and with low cost.In todays economic climate,an HR department that knows how to leverage EOR services can be invaluable to the business.Ive seen CEOs that are running companies that are very successful in the realm of being remote.I thin
110、k the biggest thing I would add is that its a lot of work.If youre a CEO and youre running a company and your staff is remote,you need to really work at it.The successful ones plan offsites and the CEO gets on and makes a video at the end of every week and gives the company an update.They put a lot
111、of time and effort into hiring people for onboarding and training.So,its not just something to say,“hey,were not going to come back into the office”.I think its something where people have to say were going to put some real meat behind this to do it the right way.”Jeff Stone,Sixth Street Global Advi
112、sorsThe Global Employer of Record Report:20232005How EOR Supports Payroll Functions As the world of work becomes more global,one of the most basic HR functions of an organization becomes increasingly challenging payroll.Reports by The Everest Group show that compliance with local laws and regulation
113、s and processing payroll with near 100%accuracy are the top objectives behind adopting an EOR provider.An EORs compliance ability depends on their people and their payroll technology.Some EORs address this valid concern by offering a global payroll solution that customers can access.But to be releva
114、nt as demand for EOR services increases,providers will have to address the new player in the payroll game strategy.According to the Global Payroll Association,agility is the new watchword for savvy,future-minded,organizations but their ability to move quickly,act decisively and continue to grow reli
115、es on a solid foundation of information.”In addition to seeing the importance of having an HR strategy,businesses are learning how payroll data can influence hiring decisions,and they are building payroll strategies.In a recent survey sponsored by Atlas,HR.com found that 15%of organizations identifi
116、ed their payroll strategy as highly strategic.More than a third of the organizations surveyed said that they find compliance with wage,hour,and taxation policies and regulations challenging.Also,more than half of respondents said that the primary trend shaping the near-term future of payroll will be
117、 increased integration of payroll,HR,and attendance systems.Top payroll challenges are:Lack of technology integration Inflexible payroll systems Inconsistent or minimal automation Cost of payroll systems Source:Future State of Payroll,HR.comThe Global Employer of Record Report:202321This change has
118、been a long time coming.In a survey run by GPA in 2021 Is Global Payroll Setup to Impact the Bigger Business Picture?it was revealed that cloud technology had been adopted by a little over 36%of respondents,while a further 14%of companies had implementation and adoption underway.At that time,only 42
119、%believed there was a single vendor capable of handling all their payroll needs globally.Fast forward to 2023,and the GPA reaffirms that organizations expect technology to play a central role in facilitating the flow of information within organizations with data stored on a single platform and easil
120、y accessed by all.In the future,payroll will also be more widely recognized as a strategic partner in broader business planning,and AI-backed payroll systems will help realize this potential.Increasingly,the decision-makers recognize how payroll data can be leveraged to make business decisions.An EO
121、R service provider that offers a payroll management system,as well as its clients,will be best served if their system can gather and analyze that payroll data for their client.Already using cloud technologyYes,but timing is not knownNoNot sureYes.and we have a defined timeframe in mindYes,the implem
122、entation is in progress0%10%20%30%40%50%60%70%80%90%100%Source:Is Global Payroll Setup to Impact the Bigger Business Picture?,GPAIs your organisation considering the use of cloud based technology to support global payroll?36.59%26.83%12.2%9.76%8.78%5.84%The Global Employer of Record Report:202322Fro
123、m the GPA:The wealth of data payroll holds can inform important HCM decisions.Remote working is here to stay and so too are the altered priorities of the global workforce.Prior generations who expected a classic career trajectory and a 9-5 day at a physical office are ageing out or moving on and the
124、ir Gen Z and Millennial replacements are shaking things up by putting work-life balance and ethical concerns first.And they expect their workplace to reflect their values.To recruit and retain employees from this free-thinking talent pool,companies must be proactive and flexible in their approach.Of
125、fering employee benefits that are attuned to employees needs,being open to hybrid work requests and exploring alternatives to traditional work and pay cycles such as a four-day week and on-demand pay.When it comes to remote work,an EOR can give businesses the confidence to say yes even when they lac
126、k an entity in the destination country safe in the knowledge their employee will be compliantly onboarded and accurately paid.”Payroll data can inform business leaders on where they are putting their employee spend.Data on roles can show trends in salaries,talent ability,and the true costs of employ
127、ees.Decision-makers can decide to concentrate certain roles in one country due to talent availability and relocate other roles to countries with lower costs of employment.Global payroll is not just about complying with local rules anymore.It will be the foundation of payroll strategy driving busines
128、s decisions in the hunt for top talent and the timeless quest for reducing costs all on a global scale.The Everest Group backs this up,reporting that buyers state“that complying with local laws and regulations and processing payroll with near 100%accuracy are the top objectives behind adopting an EO
129、R solution.”EOR providers need to meet this threshold before customers look at other solutions and services.The Global Employer of Record Report:20232305Emerging EOR Trends:What HR Decision Makers Need to Consider in the Next 12 Months So,what does the future of EOR service adoption look like?High g
130、rowth is predicted for the EOR services industry in the coming years,but what will it take to create that market?NelsonHall reports that the key criteria for customers looking to partner with an EOR are:in-country coverage and support qualified staff a strong international HR and payroll domain and
131、process understanding Coverage&support for targeted countries12345Other servicesQualified personnelStrong intI HR&payroll domain and process understandingInnovative pricing&commercial termsAbility to offer a modern cloud-based HR/payroll platform and UXBreadth of global solutionsAbility to offer man
132、aged HR/payroll services beyond EORGlobal OR Services:Vendor Selection Criteria ImportanceSource:NelsonHallThe Global Employer of Record Report:202324The Global Employer of Record Report:2023The expected demand for EOR services reflects a desire for international expansion.While the growth mindset h
133、as abated in 2023,other factors such as tight labor markets and talent shortages may make up the difference.Despite ongoing economic uncertainty,however,using an EOR remains a cost-effective hiring solution.In order to remain competitive,it is imperative for all companies to devise an international
134、expansion strategy.The prevailing economic uncertainty compels employers of all sizes to reevaluate their approaches to expanding their markets and securing talented individuals.The ones who can swiftly adapt and exhibit flexibility will be the most prosperous.Although we are seeing a shift back to
135、office work,EOR still offers the flexibility employers need to hire the best talent regardless of location.The EOR market is still new,as we see economies bounce back,you will see the expanded need for flexibility when finding global talent.EOR is just getting started.”Rick Hammell,CEO of AtlasThe G
136、lobal Employer of Record Report:202325Further,leveraging independent contractors and gig workers will be a favored approach to fueling agile talent strategies moving ahead.60%of executives expect gig workers to replace traditional full-time workers substantially.Given these dynamics,its no surprise
137、that the global EOR solution has seen unprecedented adoption over the past five years,with a massive opportunity ahead of it to help every HR organization facilitate the strategic direction of their businesses.Global EOR solutions have come a long way from their mostly payroll roots and have emerged
138、 as a full-service global employment and growth-accelerating technology-enabled platform.These solutions are and will continue to mature at an accelerated rate.Expect more digital innovation,deeper human capital management(HCM)integration and insights,and expanded workforce solutions,services,and en
139、ablers.This will lead to deeper integration and convergence for global EOR solutions to synergize with,complement,and extend the primary HR operating model to support global mobility and facilitate borderless hiring and speed to market while controlling the costs of market entry.CHROs of an agile or
140、ganization should look to complement existing HCM investments and resources to solve the volatility and marketplace dynamics,drive organizational agility,and enable material competitive advantage for their businesses.The global EOR model should be a go-to lever for enabling their talent demands and
141、driving impactful business outcomes.However,not all EOR solutions are equally capable,and the stakes and risks are high in“getting it wrong.”When seeking global workforce solutions,go slow to go fast.The marketplace for global EOR solutions is incredibly crowded,confusing,and filled with a wide rang
142、e of vendors of varying maturity.While speed to market is the value driver for the global EOR solution,take the time for due diligence when selecting a partner to fuel your global employment strategy.Understand the providers capability to support your firms requirements.Look for directly owned entit
143、ies,in-country expertise,compliance capability,financial stability,and enabling technology.Most importantly,ensure the solution can scale with the organization along its growth journey.Growth-oriented organizations of all sizes commonly find their opportunistic global mobility and employment needs b
144、ecome long-tail global payroll needs.Landing,expanding,and thriving in the target country and finding their footprints and compliance needs have grown.Look for providers with a technology-enabled managed global payroll services capability that compliments its global employment services and can suppo
145、rt compliant payroll for the organizations total workforce along its strategic growth path.Pete Tiliakos,Gxt AdvisorsAccording to the 2023 Mercer Global Talent Trends report,96%of organizations expect to redesign their HR functions,and 54%expect to do so by using agile HR resources to meet evolving
146、HR project/enterprise needs.This will require stepping outside their comfort zones,driving impactful change,and reaching beyond borders to engage the right mix of the best skills and talent available.The Global Employer of Record Report:202326Differentiators for EOR Services Providers According to t
147、he Everest Group,the key elements that will differentiate EOR providers going forward are:Country coverage Responsiveness Sophisticated technology platforms with a user-friendly interface Pricing Flexibility in benefitsWe will see EOR services providers focusing on these key elements to set themselv
148、es apart.Top trends to look for in EOR services are:Increasing digitization and centralization with other HR functions,including payroll and benefits administrationHigh country coverage,especially in new regions and emerging marketsResponsiveness Adoption of AI and automationThe Global Employer of R
149、ecord Report:202327A Regional Look at Work Trends and EOR Adoption Despite continued economic challenges in 2023,experts agree that the global EOR market will continue to grow at pace.As already mentioned,the Everest Group has predicted a value of the global EOR market between USD 3.1 billion and US
150、D 3.4 billion by 2025.The IEC Group,meanwhile,predicts the markets value will approach USD 10 billion in 2028.These valuations are expected to derive from revenues earned from sales of EOR services to companies in every global region.However,the growth and adoption of EOR services varies distinctly
151、from region to region.What follows is a breakdown of some of the key work trends that HR decision-makers should be aware of in each region and the adoption of EOR services from a recent Atlas survey.Africa and Middle EastEuropeAsia and PacificLatin AmericaNorth America07The Global Employer of Record
152、 Report:202328Africa and Middle EastKey Work Trends:Moderate to strong economic growth expected in ME and North Africa in 2023.Africas population expected to nearly double to 2.5 billion people by 2050,while it will become home to the worlds largest working-age population by 2040.Africa is undergoin
153、g a structural shift from agriculture to services,with employment in the services industry increasing from 30%to 39%.Economically growing nations in Africa include Ghana,Burkina Faso,Ethiopia,Kenya and Tanzania.Technology jobs especially in cyber security,data and cloud are in demand in the UAE and
154、Saudi Arabia.EOR Service Adoption:According to both the Everest Group,the MEA market remains one of the smallest in terms of EOR adoption.However,97%of companies surveyed in the UAE said that they are planning on entering new markets in the next 12 months,with 41%stating that they planned to use ext
155、ernal resources for hiring.This is because almost three in four(74%)of companies surveyed in the UAE have said that they have difficulty finding the right talent currently.Sources:Atlas Surveying,2023-The Everest Group,2022-McKinsey,2023-TechGig,2023-WEF Chief Economists Outlook,2023The Global Emplo
156、yer of Record Report:202329Asia and Pacific Key Work Trends:APAC countries in general expected to have moderate economic growth in 2023.Upskilling in demand in China because the workforce is aging compared to other emerging economies and its population is shrinking.Labor supply and demand mismatch.I
157、n Japan,for example,companies average just two applicants for every role and millions of jobs remain unfilled.Organizations are increasingly exploring dispersed operating models to de-risk operations based in China,with some manufacturers moving operations to Vietnam.EOR Service Adoption:EOR demand
158、is highest in China,Hong Kong,India,and southeast Asia.Industries seeking EOR services include technology,admin and support services,and health services.The challenges that companies are solving with EOR services include global expansion complexities,general hiring challenges,and the retention of ta
159、lent.Sources:Atlas Surveying,2023-The Everest Group,2022-China Briefing,2023-Korn Ferry,2023-WEF Chief Economists Outlook,2023The Global Employer of Record Report:202330EuropeKey Work Trends:Economic growth expected to be sluggish in Europe throughout 2023.Labor costs are rising significantly in EU
160、countries as much as 5.3%in the first quarter of 2023 as employment rates rise.More than 75%of EU companies report difficulties finding workers with necessary skills,highlighting a growing talent gap in the region.Its expected that 20 million information and communications tech specialists should be
161、 employed in the EU by 2030.EOR Service Adoption:Adoption of EOR services is high in Europe due to the increased number of enterprises adopting remote and hybrid work styles.Continental Europe makes up over half of the overall revenue contribution to global EOR providers.The challenges that companie
162、s are looking to solve with EOR technology and services include finding talent,exploring new ways to reduce operational costs,and consolidating HR services onto one platform for improved employee experience.In the post-COVID landscape,managing and maintaining employee remote working needs compliantl
163、y is also a huge driver of EOR services.Sources:Atlas Surveying,2023-Eurostat,2023-European Commission,2023-The Everest Group,2022-WEF Chief Economists Outlook,2023The Global Employer of Record Report:202331Latin America Key Work Trends:Weak economic growth expected in 2023.The largest economies in
164、South America are Brazil,Argentina,Chile,Colombia,and Peru.Latin American economies are expected to be as much as USD 9.2 trillion by 2030.EOR Service Adoption:As an emerging economy,the LATAM market is considered a targeted area for EOR services.Brazil remains the key market in the region,but Mexic
165、o,Colombia,and Argentina are also emerging centers of EOR expansion considering their favorable locations and highly-skilled pools of talent.In particular,EOR services that enable the management of contractor services will be particularly relevant to the LATAM market.Sources:Atlas Surveying,2023-The
166、 Everest Group,2022-NelsonHall,2022-WEF Chief Economists Outlook,2023The Global Employer of Record Report:202332North America Key Work Trends:Weak economic growth expected in North America for 2023.Talent shortage challenges are expected to increase,with 77%of employers reporting difficulties in fil
167、ling roles a 17-year high.Remote and hybrid working trends remain high in North America,with 48%of knowledge workers predicted to be working hybrid or fully remote in 2024,up from 27%in 2019.Employee retention also remains a challenge,with turnover rates expected to hit as high as 24%in the coming y
168、ears.EOR Service Adoption:North America leads the way in terms of adoption of EOR services.North American companies represented 36.4%of the global EOR services adopters market in mid-2022,up from 48%in 2021 as reported by the Everest Group.Top industries in need of highly skilled foreign talent in C
169、anada include the tech,healthcare,and financial sectors.Canada filling skills gaps with immigrating highly skilled workers.The challenges that companies are looking to solve with EOR technology and services include supporting employees in locations where the organization does not have its own entiti
170、es and the need to become compliant in terms of paying employees.Sources:Atlas Surveying,2023-Gartner,Forecast Analysis:Knowledge Employees,Hybrid,Fully Remote and On-Site Work Styles,Worldwide,6 January 2023-ManpowerGroup,2023-NelsonHall,2022-The Everest Group,2022-WEF Chief Economists Outlook,2023
171、The Global Employer of Record Report:202333List of Sources:This report was compiled by Atlas in association with key experts in the Employer of Record and broader HR/HXM industries.In particular,Atlas would like to give a special word of thanks to:Guidepost Growth Equity Everest Group HR.com Sixth S
172、treet Growth NelsonHall People Matters Pete A.Tiliakos,GxT Advisors The Global Payroll Association The IEC Group Other Sources:China Briefing,Chinas Changing Labor Market Trends and Future Outlook DLA Piper,Economic drivers in Latin America:Key industry sectors and the rise of SESG European Commissi
173、on,European Year of Skills 2023 Gallup,State of the Global Workplace 2023 Korn Ferry,4 Talent Trends Driving New Hiring Opportunities in APAC Mercer,Rise of the Relatable Organization,Global Talent Trends Study,2022-2023 McKinsey Global Institute,Reimagining Economic Growth in Africa:Turning Diversity into Opportunity Wall Street Journal,“As Americans Work from Home,Europeans and Asians Head Back to the Office”.World Economic Forum,Future of Jobs Report,May 2023The Global Employer of Record Report:202334Expand o Onboard o Manage o P