If you’re operating in a competitive local labor market, it can be hard to find the right talent. Global HR services open your business up to a wider talent pool, connecting you with qualified candidates from across the world. Further, they help remove the obstacles to hiring employees from international locations, ensuring that you remain compliant with the regulations that are local to your new team members.
In this article, I’ll be explaining how global HR services can help your organization, how they work, and the different types of HR functions they typically perform.
What Are Global HR Services?
Global HR services help small to mid-sized companies access top talent from other geographic areas without having to set up a legal entity in each country within which an employee resides. This may involve outsourcing services such as:
- Payroll processing
- Compliance with local regulatory guidelines
- Financial services
- Talent acquisition (covering applicant tracking and the full recruitment process)
- Employee benefits administration
- Performance management
Working with a global HR services partner means that your organization doesn’t need an enormous in-house human resources department to hire new employees from other countries.
Having the local knowledge and expertise provided by your HR consulting partner also helps you enhance employee engagement and increase retention, making sure that all the HR needs of your team members are being met in accordance with local expectations and standards.
How Do Global HR Services Work?
Global HR services allow you to streamline your in-house HR functions, either via a monthly rate per employee or by paying per service you wish to secure. Pricing depends on the extent of the services you use, and the number of employees you need to cover.
Depending on the type of global HR service you’re working with (see below definitions), the company either acts as your partner, sharing human resources management tasks with you or acts as the official employer of your team member, taking over all HR management tasks.
Services to Support International Teams
Global HR services can be broken down into a number of different functions. Let’s take a closer look at some of the most common global HR solutions:
Global Payroll Services
Global payroll services help you consolidate all the financial tasks for international employees. Each location has different salary expectations, minimum wage requirements, deductions, and taxation. Using HR software for global payroll can help you cut back on your HR team’s admin time, freeing them up to focus on things like employee development.
Most global payroll service providers offer the following features:
- Consolidated dashboard: A central location containing a streamlined view of all your international employee data.
- Local expertise: In-country personnel that have experience in the local tax, labor, and employment laws to ensure regulatory compliance.
- Global reach: Operations in multiple countries (anywhere from 50 to 240), and payment support for multiple currencies (between 50 and 100).
- Coverage for multiple employment types: Support for hiring and paying full-time and part-time employees, freelancers, and contractors, as well as PEO and EOR arrangements (read more below).
If this sounds like the type of provider you need, take a look at our list of the best global payroll service providers to find a good match for you.
Employer of Record (EOR) Services
An Employer of Record (EOR) acts as a surrogate employer for team members in other countries. Though the team member works for you, the EOR is their legal employer and performs many of the traditional talent management tasks including payroll and employee benefits. It’s a bit like having an external HR department to handle all the human capital management for international team members.
EORs allow you to expand your business into another geographic region without having to set up a legal entity there (a perfect fit for small businesses and startups). They enable you to add employees as an expense, rather than adding them directly to your payroll. EORs also commonly provide a singular pool of candidates that they offer to multiple companies. This enables you to access top talent at a reasonable group rate.
If your organization is looking to work with an EOR, check out our list of the best EOR services, as well as our thorough breakdown of the potential risks of using an EOR service too.
Professional Employer Organization (PEO) Services
A Professional Employer Organization (PEO) acts as your partner, helping you to carry out HR processes like benefits administration, tax filing, and payroll. Technically, this arrangement is considered to be co-employment. From a risk management perspective, keep in mind that this means your organization is still partly responsible for any liabilities incurred from the PEO services since your team members are employed directly by your organization.
When using a PEO, your organization is responsible for establishing a legal entity in each of the countries where your employees reside. The primary benefits of working with a PEO are that small businesses and startups can provide team members with high-quality healthcare benefits and HR professional services without having to hire an in-house HR department. PEOs are increasingly common, with roughly 173,000 small businesses to mid-sized businesses in the U.S. currently using their services.
If this sounds like a better fit for your needs, take a look at our list of the best PEO companies, including services offered, pros & cons, and pricing details.
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Connect With the Best of the Global Talent Pool
Not only does international staffing instantly connect you with a wider range of candidates, but it also enhances your team’s diversity and enriches your corporate culture with some fresh perspectives. The top HR services know how to use their global expertise to help you bridge this gap, taking you from a small business operating locally to a growing organization with a reach that extends around the world.
To give you a leg up in this department, take a look at these tips on how to tap into global talent and hire remote employees from our international recruiting expert Mariya Hristova.
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