The global manufacturing industry is experiencing significant shifts, driven by technological advancements, evolving consumer demands, and the need for sustainability. As the industry continues to transform globally, companies are looking for specialized talent to meet these new demands; however, the right expertise is often located beyond local borders.
Whether it’s entering new countries or hiring contractors with niche skills in automation or operational efficiency, manufacturing companies must deal with the complex challenge of ensuring compliance when hiring globally. Navigating regional regulatory frameworks can be difficult for leadership teams, but an Employer of Record (EOR) can simplify the process and mitigate the compliance risks associated with global employment.
Challenges of global hiring compliance in the manufacturing industry
According to the World Manufacturing Foundation’s 2023 World Manufacturing Report, manufacturing processes have become more digitized, creating a growing need for workers in sectors like automation and AI.
But before venturing into global talent pools to fill these roles, there are complex compliance laws manufacturing companies have to understand and manage. There’s a wide range of labor laws, tax regulations, and employment standards that vary significantly from one country to another, including:
- Benefits and compensation practices: Different countries have distinct labor laws governing employee contracts, working hours, overtime, and benefits. Manufacturing companies must ensure compliance with local laws and statutory minimums to avoid legal penalties.
- Tax and payroll complexities: Managing payroll and taxation across multiple countries is a complex task, with varying tax rates, social security contributions, and reporting requirements. Errors in payroll or tax filings can lead to audits, penalties, and strained relations with local tax authorities.
- Localized health and safety regulations: Manufacturing involves strict health and safety standards that vary by country. Ensuring compliance with local safety regulations, including those related to workplace conditions, equipment use, and employee training, is critical but hard to manage across multiple regions.
- Unionization and Collective Bargaining Agreements (CBAs): In some countries, manufacturing workers are heavily unionized, and companies must understand and manage different CBAs to avoid labor disputes and potential legal issues.
- Worker classification: Misclassifying employees as independent contractors can result in significant legal and financial consequences, including back pay for benefits and other entitlements. This risk is heightened in the manufacturing industry, where different types of workers are often needed, so strategic workforce planning is key to ensure compliance.
- Data privacy and security: Handling sensitive employee information across regions with varying data protection laws adds another layer of complexity to global hiring compliance.
The role of an EOR in ensuring global hiring compliance
An EOR is a third-party organization that hires workers on behalf of a company in a new country. EORs like G-P handle all aspects of employment, including contract generation, payroll, benefits, tax filing, and compliance.
This allows companies to bypass entity setup and focus on core business operations while ensuring that all employment practices are in line with the specific regulations of each region.
Partnering with an EOR offers several benefits for manufacturing companies looking to expand their global operations and workforce while maintaining compliance:
- Reduces the administrative burden: An EOR takes on the burden of navigating and staying up-to-date with complex labor laws and regulations, simplifying the global hiring process and reducing the risk of noncompliance.
- Assures ongoing risk mitigation: By ensuring compliance with local laws and regulations, an EOR helps reduce the risk of costly fines, reputational damage, and time-consuming audits.
- Provides access to local HR and legal expertise: An EOR provides access to local knowledge and expertise, ensuring that benefits packages and compensation practices align with the specific requirements of each region.
- Streamlines HR operations: An EOR streamlines HR operations across multiple regions, allowing manufacturing companies to focus on core competencies.
EOR in action: G-P helps AmbioPharm streamline global operations.
Founded in 2005 and headquartered in North Carolina, AmbioPharm is a global leader in New Chemical Entity (NCE) and peptide Active Pharmaceutical Ingredient (API) manufacturing, and provides comprehensive services to pharmaceutical, research, and biotech companies worldwide.
AmbioPharm strategically partnered with G-P to support their local workforce in key international regions, strengthening global operations and streamlining compliant payroll management. Today, AmbioPharm leverages G-P Meridian EOR Prime™ , our premium global employment package, to manage their global teams, access key insights in real time, and leverage in-region global employment experts to make strategic business decisions.
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How to choose the right EOR for your manufacturing company
As the manufacturing industry continues to evolve, leveraging the expertise of an EOR is a powerful tool for sustaining global success, operational efficiency, and business continuity. With the right partner, your teams can navigate the complexities of global hiring compliance while entering new markets with ease and complete confidence.
When selecting an EOR, consider the following factors:
- Experience and expertise: Choose an EOR with experience in the manufacturing industry and a strong understanding of the specific regulatory challenges in your target regions.
- Geographic reach: Ensure that the EOR has a global entity infrastructure and presence in the countries where you plan to expand, as well as the ability to provide around-the-clock support.
- Comprehensive solutions: Evaluate the EOR’s range of services, including payroll management, onboarding support, tax compliance, worker classification, and data protection to ensure alignment with your global hiring strategy.
Hire specialized talent quickly and compliantly with G-P.
No entity? No problem. If your manufacturing company would like to hire specialized talent or expand to new regions, G-P can help. As a global EOR and recognized leader in the global employment industry, we provide HR, legal, and compliance support at your fingertips, so you can build teams anywhere with confidence.
With us, you can fill critical manufacturing roles like production managers, quality control engineers, automation and robotics professionals, and R&D managers, quickly and compliantly, without setting up new entities.
Hire, onboard, and manage global teams in 180+ countries with the G-P Meridian Suite™ of global employment products.
