Global Hiring Compliance in the CPG Industry: How an EOR Can Be a Strategic Ally

In the fast-paced consumer packaged goods (CPG) industry, companies are continuously racing to meet changing consumer preferences, increasing demands for sustainability, and the rapid rise of e-commerce platforms. According to a recent report by McKinsey & Company, today’s consumers are spending more but buying less: In 2023, Americans spent 10% more on groceries but bought 4% fewer items. 

As a result, the ability to identify sustainable growth pockets is more critical than ever for CPG companies. That’s why many food, beverage, and personal care businesses have set their eyes on emerging markets where middle-class populations and disposable incomes are expanding; however, navigating unfamiliar markets is not an easy feat. 

From varying labor laws to contrasting tax obligations and reporting requirements — the stakes are high. One single compliance mistake can result in large fines, operational delays, or reputational damage.

In this age of market agility, CPG companies are in need of a fast and easy solution to compliant market entry: That’s where the Employer of Record (EOR) comes in. In this blog, we’ll explore the compliance challenges CPG companies face in global markets and how an EOR can be a strategic ally.

The challenges of global hiring compliance in the CPG industry

Global expansion offers immense opportunities, but it also brings a maze of complex regulations. Each market has its own set of labor laws, tax obligations, employment contract requirements, and employee benefits expectations. For the CPG industry, staying compliant across different markets can quickly become a logistical, operational, and legal nightmare.

Top compliance challenges include:

1. International labor laws: Each country has distinct rules around hiring, working hours, compensation, minimum wage, and termination.
2. Tax obligations: Global payroll management requires understanding local tax structures and social security contributions.
3. Employment contracts: All employment contracts must comply with local regulations and reflect the company’s policies.
4. Data privacy: Country regulations can vary and add another layer of complexity to managing employee data internationally.

CPG companies operating in multiple countries face increased risks of misinterpreting local laws, which can slow down market entry and affect operational efficiency, as well as overall business performance.

Key trends in the CPG industry: Where is the talent?

The top regions and markets for CPG companies in the food, beverage, and personal care field are typically those with large, growing consumer bases, high disposable income, and dynamic retail environments. Key regions that are ripe for CPG talent include: 

• North America: U.S. and Canada. Popular roles include brand managers, product category managers, and sales managers.
• Europe: Germany, France, the Netherlands, and UK. Popular roles include demand planners and business development managers.
• Asia-Pacific: China, India, Japan, and Australia. Popular roles include food scientists, production supervisors, and quality assurance managers.
• Latin America: Brazil. Popular roles include product managers, talent acquisition specialists, data analysts, and procurement specialists.
• Middle East and Africa: UAE, Saudi Arabia, and South Africa. Popular roles include regulatory affairs managers, compliance managers, and product engineers.

For CPG leadership teams, understanding regional trends is foundational to success. 

• E-commerce growth: Across all the regions noted above, the rise of e-commerce is transforming how CPG companies reach consumers, especially in countries like China, the U.S., and the UK.
• Heightened sustainability concerns: There is a growing demand for eco-friendly, sustainable, and health-conscious products globally, especially in regions like Europe and North America.
• Increased product localization: Successful CPG companies are tailoring their products to regional tastes, especially in diverse markets like India, Brazil, and China.

What is an Employer of Record (EOR)?

An Employer of Record (EOR) legally employs workers on behalf of another company, enabling global hiring without setting up a legal entity. While CPG companies maintain full control over day-to-day operations, an EOR takes on the responsibility of managing compliance and the entire employment lifecycle, including everything from payroll, taxes and benefits to ensuring local labor laws are observed and enforced.

How an EOR can be a strategic ally for CPG companies

For CPG food and beverage companies, an EOR offers more than just legal compliance — it provides a strategic advantage in global optimization and expansion. Working with an EOR has the following benefits:

1. Risk mitigation: An EOR removes the burden of understanding local labor laws and ensures compliance with regulations, minimizing risks for CPG companies.
2. Cost efficiency: Setting up legal entities in each new market can be costly and time-consuming. An EOR allows CPG companies to enter new markets without incorporating, saving time and money.
3. Seamless market entry: With an EOR managing the legalities of hiring and employment, CPG food, beverage and personal care companies can quickly onboard talent and begin operations in new markets in minutes, not months.
4. Comprehensive guidance: An EOR like G-P has a robust team of HR and legal experts to help streamline and simplify new market entry and expansion. This frees consumer packaged goods companies to concentrate on core operations like product development, marketing, sustainability, and growing their customer base.

How to choose the right EOR for your CPG company

When selecting an EOR, choosing a partner with deep expertise in the CPG industry is critical. The right EOR will manage compliance and provide data insights and reporting tools to inform your expansion strategy. Among the key considerations for companies researching EOR solutions are:

• Industry experience: There are many EORs out there, so partner with an industry-leading provider. Research third-party analyst reports and ensure the EOR has experience working with CPG industry companies and understands the industry’s unique challenges.
• Regional expertise: Select an EOR with a global entity infrastructure and a proven track record in your target expansion countries.
• Long-term scalability: Partner with an EOR with solutions that can scale with your business and support your teams with future business initiatives.

Build global teams quickly and compliantly with G-P.

If your CPG company would like to hire specialized talent or enter new markets quickly and compliantly, G-P can help. As a global EOR and the recognized leader in global employment, we provide HR, legal, and compliance support at your fingertips, so you can build teams anywhere. 

With our industry-leading suite of global employment products, companies of all sizes can hire, onboard, and manage global teams in 180+ countries. Partner with us today to unlock global talent and fill critical CPG roles in market research, supply chain management, forecasting and demand planning, food science, quality assurance, and more. 

 Contact us or book a demo.