Global expansion offers companies the chance to tap into new markets and access diverse talent, but for Chief Human Resource Officers (CHROs), it also introduces a maze of challenges. Navigating different labor laws, aligning compensation with local expectations, and ensuring compliance in unfamiliar territories can quickly turn a promising opportunity into a risky venture.
But what if there was a way to simplify expansion? Enter the Employer of Record (EOR), a strategic partner that can help you seize new market opportunities — without the risk.
Our 2024 Global Employment Guide highlights how partnering with an EOR like G-P can help company leaders align to achieve a smoother, faster, and more compliant market entry.
So let’s explore the role and challenges of CHROs specifically and how an EOR can transform your approach to global expansion.
The CHRO’s crucial role in global growth
CHROs are at the helm of global hiring efforts. Their role extends far beyond recruitment; they are responsible for ensuring that every aspect of the employment lifecycle aligns with local standards, including:
- Managing global compensation: CHROs must identify the skills and expertise needed to compete in global markets while navigating each region’s unique cultural and economic landscape. They’ll need a deep understanding of employee expectations to offer competitive compensation and benefits that resonate with local talent.
- Navigating employment contracts and payroll: CHROs must ensure that their company adheres to local labor laws, tax regulations, and employment standards to avoid legal and financial repercussions. They must explore the nuances of local employment contracts and ensure that payroll processes meet regional standards.
- Upholding ethical standards: In addition to compliance, CHROs are responsible for maintaining ethical standards and corporate governance practices across all regions. Their efforts protect the company’s employer brand, enhance the employee experience, and ensure positive outcomes for customers and stakeholders in global markets.
Top 3 global hiring challenges for CHROs
1. Variations in compensation structures
When it comes to global compensation, four key elements come into play:
- Base pay
- Statutory benefits
- Variable and incentive compensation
- In-kind benefits
While most global compensation packages incorporate these core elements, expectations vary from country to country. For example, one region might prioritize base salary, while another might focus more on additional benefits like private healthcare, housing allowances, or bonuses.
Failing to align compensation packages with these local expectations can negatively impact your ability to attract and retain top talent.
2. Differences in benefits packages
Just like compensation, benefits packages vary widely across regions. In some countries, comprehensive health insurance and retirement benefits are standard; in others, these may be less critical. CHROs must navigate these differences to offer competitive packages that meet local norms and expectations.
When benefits packages fall short, it can affect workplace culture and damage employee engagement. CHROs must recognize the significance of tailoring benefits packages to align with employees’ unique needs to foster talent satisfaction and retention.
3. Compliance risks
One of the most challenging tasks is ensuring compliance with local laws and regulations, including employment laws, tax regulations, data privacy laws, and other legal requirements. Noncompliance can lead to severe legal and financial penalties and damage a company’s reputation.
Staying updated on these regulations and ensuring that your company operates within the legal framework requires a comprehensive understanding of the laws in your target market. Legal counsel and compliance officers are crucial in ensuring you meet all the necessary obligations to avoid potential liabilities and maintain a positive brand image.
Leveraging an EOR for global hiring success
Global expansion complexities and risks have led many companies to partner with an EOR. An EOR manages all aspects of employment, allowing companies to expand globally without sidetracking from core business operations.
Companies that leverage EORs can:
- Assure ongoing compliance: Partnering with an EOR provides access to a global network of compliance experts with a deep understanding of regional labor laws, tax regulations, and employment standards. This support helps your HR teams focus on other critical growth initiatives while ensuring legal and operational alignment during expansion.
- Access in-country HR expertise: EORs often have regional HR experts who can provide insights into local employment practices, compensation expectations, and cultural nuances. This localized knowledge is invaluable for creating competitive benefits and compensation packages that attract top talent.
- Utilize AI technology and data analytics: EORs leverage AI technology and data analytics to research local market dynamics. In 2023, G-P introduced GIA™, our generative AI-based Global Intelligence Assistant, to offer customers 24/7 support and guidance at any time or stage of their global employment journey. CHROs can use this data to make informed decisions and avoid costly errors.
- Develop competitive compensation packages: With the support of an EOR, CHROs can develop competitive compensation and benefits packages that comply with local laws. EORs can help companies set appropriate salary levels and offer benefits valued by local employees.
Boost your global hiring strategy with G-P.
Building and managing global teams can be a high-stakes endeavor, but for CHROs, it also represents an incredible opportunity to drive growth and innovation. By leveraging the strategic advantages of an EOR, CHROs can confidently navigate the complexities of global hiring.
As the recognized leader in global employment, G-P delivers everything companies of all sizes need to quickly and compliantly build and manage global teams in 180+ countries, regardless of entity status.
Our industry-leading global employment products and EOR packages, G-P Meridian EOR Prime™ and G-P Meridian EOR Core™, provide essential tools and expertise to ensure compliance, build competitive compensation packages, and achieve global success.
Download our 2024 Global Employment Guide to learn more about how an EOR can help align your Executive, HR, Legal, and Finance leaders. For more information on hiring and managing global teams quickly and compliantly, contact us today or book a demo.
