Global expansion – Page 3

3 challenges and solutions for building strong company culture in a globally distributed workforce

Posted on June 22, 2022June 22, 2022 by naveen

It’s no secret that organizational culture impacts company success as well as employee satisfaction. A positive culture of shared values and healthy workplace behavior enables and empowers employees and managers to be engaged, driven, and loyal. Strong organizational culture also attracts a talented workforce. Nearly 77% of candidates look at the workplace culture before applying for a job, according to a report by Glassdoor. This suggests that a negative perception of an organization’s culture can make it challenging to fill open positions and retain top talent.

While instilling culture across the organization is a challenge in any setting, the COVID-19 pandemic underscored its importance as it significantly impacted productivity and forced leadership to evolve to the new normal. Their reassessment and reevaluation either strengthened the work culture or diluted it. Nevertheless, be it a fully remote workforce, or a distributed team working on a follow-the-sun model, culture is key to creating a sense of genuine connectedness and belonging.

Increased stress, lopsided work-life balance, isolation and job insecurity have all contributed to lower productivity of distributed teams and remote workers in recent times. This is only compounded by company culture that is transactional rather than relational. In fact, companies that managed to instill positive organizational culture, offering their workforce flexibility and transparency, saw big gains. Not only are 68% of teams evaluating their culture to better reflect the new normal, but 62% of remote and hybrid employees and 52% of on-site employees said that their workplace culture had a positive impact on their work as per a 2021 report by Gartner.

Here’s a deep dive into the challenges and means of scaling organizational culture in a globally distributed workforce.

Challenges of building workplace culture in distributed workforce

Fragmented and dispersed workforce

One of the ways to cultivate workplace culture is through shared experiences. In the past, these took shape as shared learning seminars and other such in-person activities. Unfortunately, due to the pandemic, such interactions aren’t as frequent or are fully digital when they occur, and thus lacking in one way or another. This makes building and enforcing a strong work culture challenging in a distributed workforce.

Too much transparency in the workplace

While transparency is essential, especially now, too much is problematic. Companies with an overly transparent culture often face issues of over-sharing, which in turn hampers the ecosystem. For instance, too much transparency about financial struggles, losses or even salaries can lead to unrest, detrimental competition and even unwarranted dismissals.

Increased pressure for productivity

Spurring productivity, while essential to any organization, is among the hurdles companies will likely face when building the right culture. Both managers and employees can make it difficult to set the right values or even act in accordance with them when there is pressure to boost productivity. According to research, 50% of senior leaders stated that this type of pressure is one of the biggest challenges in creating a positive culture.

How organizations can build a strong culture in a globally distributed workforce

Be intentional about culture and celebrate cultural differences

Having a set of principles or values that leaders and the top tier of management believe in and act on, is step 1. Bringing up workplace culture from onboarding and throughout the employee work cycle is key to it being taken seriously. While it is important to have a culture that all employees can share, it is also important to accept and honor diversity. An empathetic culture is mission critical in a globally distributed workforce, since companies are now expected to be diverse. According to this study, 84% of the CEOs said empathy drives better outcomes; the same study also said that 90% of GenZ employees are more likely to stay if the organization has an empathetic culture.

Leverage technology to better communicate and collaborate

Communication and collaboration are critical tools that support organizations in building desired workplace culture. Remote working can have a negative impact on both of these and active measures to counteract such gaps must be put in place. Organizations can assign mentors to the new hires, have online team huddles, and upgrade to technology that streamlines communication. Only through effective communication can the values be imparted into every sector and silo of the workforce.

Lead by example

Actions speak louder than words. For culture to truly set in, the organization’s values must be actioned by top management and the board of directors. Leaders should believe in what they say and do to get the desired results. On the other hand, leaders acting in opposing directions can create distrust among the employees, which then further deteriorates into a negative perception of the workplace. Simply put, when it comes to building the right culture, a ‘Be. Do. Say.’ style leadership is necessary.

Apart from the above measures, organizations should also rely on the in-country experts when managing a distributed workforce. This means that even though company values would be at the forefront in communication between employees, in-country experts should be at the forefront in matters concerning monetary and non-monetary compensation. This is because there are different customs and laws that come into play.

Dependency on the experts here can help with compliance and stronger culture. Talent500 can help you build and grow your global workforce in a seamless way with our AI-powered tools. Request a consultation now to know how we can help you manage your workforce, stay compliant, and engage with employees to cultivate a strong culture.

How to converse effectively with clients as a front-end developer

Posted on June 17, 2022July 21, 2022 by venkatesh

For front-end developers, communication is an essential skill. In contrast to backend developers, they have the active participation of stakeholders in their work. Whether working on a small website or a large-scale application, you will actively communicate with clients.

Speak with confidence

Confidence in your communication is a must to subconsciously convey to the client that you are an expert in your domain. Front-end developers have a lot to discuss with clients, project scope, design, timeline, cost, etc. Everything must be conveyed with the clear objective of informing the client.

If you are wondering how front-end developers include confidence in their communication, here’s an example:

Suppose you have a feature that will make a client’s site faster, then your tone must reflect that you know what you are talking about.

“I think it will help make your site faster” is an unappealing statement. Instead, you should use “By reducing the number of HTTP requests to the browser, I will significantly improve site performance.”

Here the difference is that you sound confident, and the client knows precisely what you will be doing and how it will affect the project.

A word of caution here is to keep in mind to be respectful. During large web projects, there will be thousands of elements and components to work on. Something will slip through the cracks, do not be accusatory. Gently discuss with clients about project requirements or missed tasks.

Communicate roadblocks with a strategy

Clients are an essential part of a business. To get them on the same page, you need to structure your conversations around their needs. It is vital to keep them informed and included in the development process.

Most front-end developers tremble when they have to communicate roadblocks with the client. But it is not that difficult; think of it the same as creating a website’s front page.

You think about the action you want the visitors to take. In this case, navigate the client through the issue without aggravation.

Have a call-to-action ready that speaks to the client and paves the way for communication.

Design the rest of the page, i.e., the conversation around getting the visitor (the client) through the conversion funnel (talking through the issue).

Let’s see it through an example. Suppose you face difficulty with a component design and think you can achieve it with another programming language. It would help if you initiated something like this.

“I have completed the registration module, but we should make the KYC process faster. Right now, you have suggested Vue.js, but it is limited in its scope in performance. We should use Node.js, which is much faster and can be deployed faster.”

Here you are making clients stick to the path you want to take, cementing your authority and expertise.

Set expectations

Establishing boundaries around the project’s scope, turnaround times, response times, and support is crucial. The first step towards this goal is to make the expectations clear from the beginning.

Define the expectations as accurately as possible. It will help the client be clear about the scope of work you will be doing and the timeline. Discuss the project’s timeline with the client before starting the project to minimize the risk of future disagreements.

Most clients like to work with developers who stick to their agreement and put in the hours promised. Set up a proper communication channel and time when you will hold meetings with the client for effective communication. Avoid engaging clients outside this time unless it’s necessary.

Be transparent about your pricing

Be it a rate-based project or fixed hourly rates, the project’s pricing is always the elephant in the room. The final project pricing depends on the complexity of the project and the features you are going to build. Not all features are created equal, and if you do not communicate this to the client, there will be a misunderstanding later on.

Eliminate any scope for miscommunication by putting your pricing in writing. Mention what features you will be working on and that any additional features will cost extra. Be open to the demands of the clients and their budgets. You can compensate for less pay by using technologies that offer better automation and faster delivery. For instance, if a client wants static pages in a JavaScript page, you can use GatsbyJS, which has ready-made static page templates.

Conclusion

Front-end developers are not the awkward, bespectacled geeks who fail to communicate with clients; they are professionals who deliver on clients’ requirements keeping them in the loop throughout the development process.

We hope these tips will enable you to talk to clients professionally about everything related to the project. The key here is to prioritize the needs of the client but demonstrate your value as well for a sustainable partnership.

Talent500 is a platform for front-end developers to explore remote work opportunities with fast-growing startups and Fortune 500 companies. Sign up today to join the pool of elite talent.

Global technology talent crunch: What it means, its implications, and how to solve for it

Posted on April 29, 2022July 8, 2022 by mahidhar

Shortage of skilled tech talent has been a pressing issue globally due to rampant digital transformation. In recent times when the pandemic played the role of disruptor, this gap only widened and reliance on digital increased. Satya Nadella, CEO of Microsoft, rightly stated, “All businesses are software businesses”. This is apparent now more than ever as entire industrial ecosystems have now gone digital. This shift was revolutionary, putting talent in the driver’s seat for the first time in a long time, and new movements took form.

For instance, the full force of the ‘great resignation’ phenomenon was felt by global industries as professionals across major countries were quitting jobs in record numbers. According to Microsoft’s Work Trends Index 2021, more than 40% of employees were considering changing jobs. And in a more recent Talent500 Talent Intelligence survey, 85% of employees are considering a job change in 2022. With travel restrictions, tightened immigration policies, reshuffled company budgets added to the mix, it is no wonder that several big players found it hard to maintain steady workforces. In fact, the attrition rate at India’s IT giants has spiked to 20-30% per annum.

The situation did improve over time as data published in CompTIA’s Workforce and Learning Trends report, 2021, stated that 40% of companies hired IT talent during the pandemic. Unfortunately, this did little to solve the talent crunch as nearly 54% of global companies faced some form of talent shortage. So, what does this talent crunch mean for the global IT ecosystem? Read on to find out.

The impact of the IT talent crunch

As industries continue to integrate with technology, reliance on qualified talent will only increase. There’s no dearth of evidence for the rising demand of technology talent but very few countries have the resources to deliver. India, for instance, was found to be the only country capable of matching the talent needs across various sectors, even having a surplus with a total pool of 250 million workers!

The struggle and delay to identify and hire skilled talent is massive as it results in stop-gap solutions that often fall short of the mark such as temporary staffing and inflated salaries, all in a bid to retain what little talent is available. In fact, surveys found that such tactics cost UK companies €7.6 billion every year, negatively impacting their bottom lines. This loss in revenue is alarming and much of it has to do with talent and skill shortages. That’s not all; lack of talent also impedes a company’s ability to cater to their clients, offer services or maintain desired output. The global talent crunch has led to competition among companies, cities, and countries.
According to Korn Ferry’s projection, some nations will be affected more than others in the coming years. Among the countries that are expected to struggle with technology talent shortage include the US, Russia, China, Brazil, Indonesia, and Japan. The crunch has devastating implications, some of which are restricted world trade, reduced overall quality, slower production cycles, and increased cost of labor.

The key causes of the IT talent shortage

Talent shortages are fueled by several factors. On one end was the rapid digitalization brought on due to the pandemic. Almost overnight, entire industries went digital, leaving many employees inadequately equipped for their new roles. Another contributing factor is the lack of education. Emerging technologies and advanced systems rely on educated talent for optimal execution and the supply is not nearly enough to meet the demand. While countries like Poland, Portugal, and Israel are working toward building these educated workforces, major players are plagued with socio-economic issues that stifle progress.

Aside from these, the increase in the number of workers at the end of their career is another notable factor. Baby boomers are now closer than ever to retiring and the millennial workforce is partly reluctant and partly ill-equipped to fill their shoes. While a part of the problem has to do with the steep learning curve of modern technologies, the more pressing issue here is the lack of managerial skills required to take on these roles. As such, companies are left with limited options, if any.

This compounds the issue as bigger corporations and even non-technological companies compete for the precious few capable of handling these roles – throwing big money at the problem. Employees then cement themselves in these positions with no future plans to move. As a result talent is unevenly distributed, and smaller companies have to think out of the box to stay afloat. This often includes relocation to places with a more stable technology talent base and lesser competition.

How tech giants and major players responded to the talent crunch

Tech giants have employed diverse strategies to attract and retain talent. Some include driving up wages or offering higher remuneration through generous signing bonuses and incentives but there are other tactics in play too. Upskilling, for instance, is a big priority for the modern employee and employers are happy to oblige. For instance, Amazon recently invested $700 million to re-skill or upskill their employees. Similarly, PwC planned to invest $3 billion towards upskilling workers in the field of AI and machine learning. Interestingly, 42% of companies plan to launch upskilling initiatives.

By creating training programs and offering opportunities to improve, employers invest in their employees, who in turn become value drivers. Another viable option that now has its moment in the sun is the freelance ecosystem, also known as the gig economy is a labor market that consists of short-term contracts. In this context, companies look to hire self-employed individuals who can take on specific jobs in return for an agreed-upon payment. While this could lead to permanent, full time roles, usually these are intended for short term projects.

Hiring from anywhere has the potential to deliver value in a cost-effective model, and many companies have this option as a preferred route. In fact, hiring remote employees and adopting hybrid work models is now the norm. Around 85% of businesses agreed that implementing hybrid work models increases workplace productivity while 77% of companies declared that remote work reduces operational costs.

Global talent acquisition outsourcing: A long-term solution to bridge the talent gap?

Recruiting international staff is challenging and time-consuming. The top leaders including Fortune 500 companies outsource global recruitment and leverage globally distributed working models, EOR frameworks, and global talent management companies to meet these goals. Data suggests that 65% of successful companies employ outsourcing in their hiring model. This makes sense considering that the global IT outsourcing market is expected to reach $98 billion by 2024. Outsourcing frees up company resources, which can then focus on evolving core business practices.

Around 66% of companies with more than 50 or more employees outsource recruitment. And 78% of businesses have a positive view of their outsourcing partners. Companies like Alibaba, Skype, WhatsApp, Citigroup, Pricena, Slack, CuriosityStream, Klout, Github, Transferwise, and StudyTube found success through this model. Global talent managing companies like ours have successfully helped start-ups and Fortune 500s including Nike, Walmart, Rakuten, Uber, H&M, Twitter, Pepsico, and Target to manage and scale their global teams globally.

With the continuous demand for high-skill IT personnel, companies can’t afford to ignore global talent when hiring. To make hiring the best talent easier, partner with Talent500. Our pre-assessment tests, Intelligent AI fit, and multi-channel sourcing makes hiring 5x faster and 60% more efficient. Find and build the perfect team and scale effortlessly. Schedule a consultation today and build effective globally distributed teams that deliver.

5 compliance mistakes to avoid when building your global team

Posted on March 9, 2022March 9, 2022 by shanthamurthy

Global expansion is a tangible milestone in the growth trajectory of every company. In the last couple of years, we have seen a massive increase in the opportunities for location-independent work opportunities. As a result, businesses have been leveraging the multiple benefits of having a global team.

However, hiring across borders comes with its own set of caveats. When it comes to employment, every country has its own set of laws which must be followed strictly. Considering different technical hubs in order to build your location strategy? Don’t forget to factor in the time, cost, effort and expertise required to fulfil legal requirements in a foreign country.

Here are five areas of compliance that must be fully vetted before you start rolling out offer letters:

Taxation laws

When hiring in a new country, ensuring compliance with its tax regime is non negotiable. We know that Income tax is a common deduction across all nations. However, the percentage can differ anywhere between 5% to 40%, depending on the country’s laws. In addition to this, there are multiple other allied taxes that employers must take into account when calculating compensation.

For example, employers in Brazil are responsible for paying a portion of employees’ social security and unemployment tax. In Germany, employers pay taxes toward employees’ social security (unemployment, accidental and health care insurance).

Misclassifying your employees

Many companies prefer hiring independent contractors as compared to full-time employees, as it restricts their employer responsibilities substantially. Full time employees are generally entitled to a host of benefits like pension fund, health insurance, paid time off etc. On the other hand, these benefits are not usually provided to contractors. Due to this reason, many companies choose to intentionally misclassify their full time or part time employees as contractors on their payrolls.

However, this is one mistake that you must avoid at all costs, as this can result in hefty fines and significant legal consequences. For example, in the USA, the punishment for misclassification is $1000 and imprisonment for a year. In Japan and the U.K., employees with a fixed-term contract automatically become permanent employees after a certain amount of time.

Not offering statutory entitlements and benefits

While every company can decide what perks and benefits it wants to offer, there are certain basic benefits that all employees are entitled to. These range from employer’s contributions to pension funds, to health insurance, maternity leaves and many other similar aspects. In India, all female employees are entitled to a minimum of 12 weeks of maternity leave. In France, it is illegal to ask your employees to work over weekends under the Right to Disconnect law.

There is no one-size fits all solution when it comes to identifying employee entitlements and benefits. Our advice? Draft your policies in a way that is aligned with statutory requirements of individual countries.

Violating minimum wage/ compensation laws

We understand that one of the biggest benefits of hiring globally is getting access to highly qualified talent with affordable compensation. However, as you set about calculating compensation for employees living in a different country, you must factor in minimum wage laws.

All over the world, over 193 countries have a list of their own minimum wages that must be complied with. India has over 1200 different classifications of minimum wage. The USA has a minimum wage for each state, as well as the federal minimum wage. What remains uniform is the strict penalty dealt out to businesses that fail to comply with these regulations. In Japan, the fine for non-compliance can go up to 500,000 Yen.

Not meeting immigration, visa or work permit requirements

When working globally, you will often have to bring foreing nationals into your home country, or send employees to a different third country. In all such cases, you must ensure compliance with all immigration and work visa requirements.

Some countries on the top of this list are the USA, Canada and most European countries. Individuals on a tourist or dependent visa will not be allowed to work in these countries. Moreover, non-compliance with immigration, visa and work permit laws can lead directly to deportation of the employee. For the employer, it could mean heavy penalisation and black-listing of the company.

A global team is the solution to numerous problems, from the lack of specialised talent, to the ease of entering into any country’s local market. As you build your global team, it is important to prioritise these five factors for a seamless hiring process.

At Talent500, we are helping global companies hire, build and manage global teams in 30+ countries by acting as their Employers of Record. We aim to transform high-impact companies by giving them access to a worldwide community of highly skilled professionals transcending geographical boundaries. Sign up here to take your first step towards global expansion!

Compensation and Benefits across top 4 talent hubs

Posted on March 2, 2022March 2, 2022 by temp

87% of companies worldwide say that they have a skill gap, or expect to have a skill gap over the next few years. The logical solution to this problem? Building globally distributed teams.

In the last few years, rapidly expanding businesses have leveraged the multiple benefits of recruiting across geographies. In order to assist you with your location strategy, we look at the top 4 emerging technical hubs globally and compare the essential hiring considerations.

Poland

Often referred to as the “Silicon Valley of Europe”, Poland is one of the fastest growing technical hubs in the world. Poland’s robust educational system, focusing on core mathematics, science, and engineering knowledge is the perfect recipe for highly skilled tech talent.

Another favourable factor is the country’s strong startup ecosystem. With over 37 tech parks, a strong business infrastructure, and equality supportive governmental policies, Poland has become the most desired hiring location for numerous businesses.

Terms of contract

An employment contract should be concluded in writing. Otherwise, the parties, contract type, and terms and conditions must be confirmed by the employer in writing at the latest on the work commencement date. According to the country’s labour code, the contract must specify:

Parties to the employment contract
Employment contract execution date
Type of employment contract
Work commencement date
Type of work
Place of work
Remuneration for work corresponding to its type, and a list of the remuneration components
Working hours (full-time or part-time)
Holiday entitlement
Notice period
Place, date and time of remuneration payment
The procedures for confirming arrival and presence at work and justifying absence from work

Working hours

The number of working hours cannot exceed 8 hours a day and an average of 40 hours per week in an average five-day working week. Under certain conditions, daily working hours can be extended and balanced by shorter daily working time on other days or by days off.
As a rule, overtime must not exceed 150 hours per employee in any calendar year. However, a collective work agreement, work rules or, in the absence of these, an employment contract, can provide for a higher overtime limit. In this case, employees’ weekly working hours, including overtime, cannot exceed an average of 48 hours a week.

Minimum wage

The minimum monthly wage in Poland is PLN 2,600 (EUR 585) to PLN 2,800 (EUR 630).

Benefits

Mandatory employee benefits in Poland include pension (PPK), social insurance, and occupational medicine (OM). Supplementary employee benefits in Poland include private medical insurance, life insurance and business travel insurance.

Pension
Since 2019, pension is mandatory for all employers in Poland. The new law is called Employee Capital Plan (PPK) and was introduced by The Polish Government to increase savings of the local nationals.

Social security
In Poland, social security consists of pension insurance, disability insurance, accident insurance, labour fund and sickness insurance. Both the employer and the employee are obligated to contribute to the Polish social security system. The employer is obligated to withhold the employee‘s share of the social security contributions and remit them to the Social Security Authorities (ZUS).

Occupation Medicine

Every employer is obligated to conduct occupation medicine examinations for their employees. It involves tests to determine an employee’s individual predispositions to work in a specific position under certain conditions. In this regard, account is taken of any harmful and onerous factors in a given working environment.

Leave policy

Public holidays – 13
Annual vacation – 20 days (for employees with less than 10 years of experience) and 26 days (for employees with over 10 years of experience.)
Sick leave – 33 days for employees under 50, 14 days for employees over 50. Employers must pay their sick employees at least 80 percent of their remuneration for a certain number of days before the Polish Social Security Office (ZUS) takes over.

India

With over 340 million people having access to the internet, India is the second most connected country after China. The city of Bengaluru and the surrounding state of Karnataka is also the world’s 4th largest technology and innovation cluster, and home to more than 400+ global R & D centers. Out of 25 Fortune 500 retailers, about 10 have set up technology shops in India in the form of GCCs or global capability centers. According to Nasscom, the number of GCCs in the country is expected to grow at a CAGR of 6-7 percent to over 1,900 by 2025.

India’s universal digital literacy and deep internet penetration play a huge role in making it a highly accessible tech market. With 3.1 million students entering the workforce annually, the country’s sheer numbers give it a definite advantage. Along with the tech hubs of Bangalore and Hyderabad, India is now extracting the tech potential of tier 2 and 4 cities like Indore, Vadodara and Kochi, among others.

Employment contracts

Labour law and employment in India requires the work relationship to be based on an employment contract. When recruiting or hiring contract must include all relevant details such as:

The identities of the parties
The date of contract and commencement of work
Term of work
Roles and responsibilities
Salary
Working hours
Holidays
Termination details

Working hours

The average work week in India varies between 40 to 48 hours, depending on whether its a 5 day or 6 day week. Overtime is paid at double the rate of the normal pay.

Minimum Wages

India offers the most competitive labour costs in Asia, with the national-level minimum wage at around INR 176 (US$2.80) per day, which works out to INR 4,576 (US$62) per month. However, specific minimum wages vary on the basis of industry and geographical location.

Leave policy

Public holidays – 3
Vacation days – 15 paid annual vacation days. A maximum of 30 vacation days can be carried over to the next year.
Sick leave – 15 paid sick leave days a year and receive 70% of their average daily wage.
Maternity leave – 26 weeks paid leave, or 12 weeks paid leave in case of 3 or more children.
Parental leave – No mandatory leave, government employees receive 15 days.
Casual leave: provided for urgent and unexpected matters. Casual leaves can typically range from 12 to 24 days annually.
Work-related injury leave: Work injury benefits come from the contributions made towards the employees’ compensation and employees state insurance. Temporarily disabled workers receive 50% compensation monthly.

Benefits

Employee Provident Fund: The EPF scheme aims to build a sufficient retirement corpus for an individual. For every company with over 20 employees, employers need to contribute 12% of the employees’ basic salary.

Gratuity: All employees engaged in establishments with over 10 employees, having rendered continuous service for not less than 5 years (except in the case of death or disability) receive a gratuity payment from their employer at superannuation, retirement or resignation, or death or disablement. Gratuity is calculated at 15 days’ wages multiplied by the number of years of service.

Vietnam

At around 20%, Vietnam has the distinction of being one of the few countries to channel the biggest share of government spending in the education sector, which towers over the global average of 14%. Vietnam also gives out supporting policies, tax incentives, and favourable laws, creating an ideal environment for hiring your global team.

Let’s take a look at the specifics:

Employment contracts

Employment contracts in Vietnam are either for an indefinite period, for 12 to 36 months, or fixed term contracts, for less than 12 months. An employment contract should include key terms of the employment relationship including:

Name and address of employer
Name, address, date of birth of employee
Description of job and working address
Time frame of the contract
Salary, payment type, date of payment, allowances and other benefits
Promotion and salary review system
Working hours and vacation
Details of social and medical insurance

Working hours

The standard work week in Vietnam consists of up to 8 hours per day, 48 hours per week.
Overtime cannot exceed 50% of regular working hours per day, 30 hours per month and a total of 200 hours per year. In special cases regulated by the government, the yearly maximum can be increased to 300 hours per year. Pregnant women who are in their 7th month or later or women with babies under a year old are not permitted to work overtime.
Overtime pay:
- The employee is paid 150% of salary on normal working days
- The employee is paid 200% of salary on scheduled days off
- The employee is paid 300% of salary on public holidays

Minimum Wage

Minimum wage in Vietnam is divided into the following categories:

Common minimum wage – VND 1,490,000 (~US$64) This is used to calculate salaries for employees in state-owned organizations and enterprises, as well as to calculate the social contribution for all enterprises.
Regional minimum wage – used for employees in all non-state enterprises based on zones as defined by the government. Divided across 4 regions, this can range between VND 2,920,000 (US$ 125) to VND 4,180,000 (US$180).

Benefits

Vietnam has the standard requirements when it comes to employee benefits – employers need to provide compulsory social, health, and unemployment insurance. Employers usually withhold employees’ contributions from their salary and directly transfer them to insurance companies.

Companies with more than ten employees should make a mandatory contribution to unemployment insurance. Foreign nationals with local employment contracts have mandatory contributions only towards health insurance.

Social Insurance – 17.5 % (Including accident, retirement, sickness & maternity and gratuity contributions.)
Health Insurance – 3%
Unemployment Insurance – 1.00%

Additional benefits

Some employers provide a 13th-month salary as a bonus. Others provide additional days of leave per year, and even private health insurance.

Paid time off

Public holidays – 16
Annual leave – 12 vacation days of leave per year.
Sick leave – 30 days (if they have paid the Social Insurance Fund for less than 15 years) and 60 days (if they have paid more than 30 years to the Fund). Employees are entitled to 75% of their salary for sick leave pay.
Maternity leave – paid maternity leave for 6 months, which increased by 1 month for each additional child. Employees receive 100% of their regular salary, paid by the Social Insurance Authority. Salary during the maternity leave period is capped at VND 29,800,000.
Paternity leave – can range from 5 to 14 days. New fathers receive 100% of their regular salary paid by the Social Insurance Authority.
Other leave – employees can take 2-3 days of paid leave in the event of a wedding, or a death in the family.

Indonesia

The past few years has seen Indonesia emerging as one of the biggest tech giants of Southeast Asia. The country offers great potential for entrepreneurs who need excellent tech talent, a supportive tech ecosystem to build their remote teams, and accelerated market penetration.

Employment contracts

Employment contracts can be either for a fixed term or of an unspecified duration (usually limited to 2 years, after which they must be renewed).

Fixed-term employment contracts must be written in Bahasa, the official language of Indonesia. If not in writing, fixed-term employment contracts are deemed indefinite-term employment contracts.

All employment contracts should specify:

Job responsibilities
Salary in Indonesia Rupiah (Rp)
Benefits
Rules around termination

Working hours

The average work week is 40 hours, which can be divided over 5 or 6 days.
Any work beyond the 40 hours in a week is considered overtime. An employee can perform overtime work for a maximum of 4 hours per day and 18 hours per week.

Leave policies

Public holidays – 16
Annual leave -12. All employees are entitled to an off on ‘Cuti Bersama, intended to encourage domestic tourism
Sick leave – no specific number. As per Indonesian law, Employees receive the following sick leave allowance if they provide medical confirmation:
- Full salary for the first 4 months of sick leave.
- 75% salary for the next 4 months
- 50% salary for the 4 months following
- 25 % thereafter until the employer terminates the employee contract

Maternity leave – 3 months of maternity leave ( employees receive their full salary during this period.)
Parental leave – Employees are entitled to 2 days of parental leave for marriage, death, baptism and circumcision.
Menstrual leave – Female employees can take leave on the first and second days of menstruation.

Minimum wage

The minimum wage varies from region to region and ranges from IDR 1,798,979 (USD 123.85) in Central Java to IDR 4,416,186 (USD 304.04) in DKI Jakarta. Find a detailed list of region wise minimum wages here.

Benefits

Health Insurance: With rising health costs, health insurance is the most attractive employee benefit in indonesia. Employers contribute the following percentages for employee insurance:

Health Insurance – 4.00%
Old Age – 3.70%
Pension – 2.00%
Death – 0.30%
Work Accident – 0.24% – 1.74%

Additional benefits

Employees receive a yearly payment called the Tunjangan Hari Raya (THR) payment, before their longest religious holiday. THR is a one-time salary for employees who have been with the company for 12 months. If the employee has been working at the company for less than 12 months, they receive an amount proportional to the length of their employment.

Thinking about building your global team? Take the first step towards building your distributed workforce with Talent500. Our team of experts and network of highly skilled professionals help you build your global team in over 50 countries. Ready to take the first step? Set up a consultation with our team here.

The tech hubs of tomorrow

Posted on December 17, 2021December 17, 2021 by shanthamurthy

The pandemic catalyzed the shift to a digital working interface, and remote working opened the door to a world that many companies had not yet considered – recruiting across borders. Companies, especially when recruiting for tech roles, now have access to an unlimited pool of highly qualified technical talent from hubs across the globe.

A key factor that companies assess when choosing a country to migrate over a digital-run economy, is its readiness. More importantly, the existing infrastructure should be able to withstand the bandwidth-intensive spike in traffic.

Some additional factors taken by businesses when hiring globally include:

Existence, robustness, and resilience of platforms key to business continuity
Digital payment solutions in use to ensure seamless transactions

Research conducted at Tufts University’s Fletcher School measured the readiness of 42 countries in this regard. This data is important because it shows which locations have the required infrastructure and resilience to accommodate the needs of companies. The findings showed that advanced economies were usually better prepared and a better choice, but such was not always the case. The EU, for instance, was found lacking due to archaic infrastructure and many limitations.

So, which locations make the cut for ideal tech hotspots in a digital world? More importantly, can any of these locations emerge as tech hubs of tomorrow? Read on to find out.

Argentina

Among Latin American locations, Argentina is a hotspot for tech companies looking to find remote workers in the industry. Its IT sector has seen tremendous advancement over the past years, but its appeal to industry leaders is due to its talent pool.

Per Coursera’s Global Skills Index Report 2020, Argentina secured Rank 22 globally for Data Science Skills. Some of the categories in which it outdid other Latin American countries were:

Cybersecurity
Cloud computing
Application Programming Interface
Convolutional Neural Network
Web development
UX design
Internet of Things

That’s not all. The same year, Argentina also secured 1^st place in the global ranking in technology. The Argentinian government is also actively involved in the development of this sector, with one of its campaign goals centered around increasing the number of women in technological fields. As per a report, this has proven effective and is expected to grow to include 40% of females by 2024.

The wages for such professionals are another reason why tech companies are likely to jump at the opportunity to set up remote teams here. The average monthly income for software developers is about $1000, and can go up to double the amount based on seniority.

Poland

Nearly a quarter of the 1 million IT professionals in the Eastern and Central European regions live and work in Poland as per data published by Stack Overflow. For a country in the heart of the EU, the sheer numbers alone make it a tech hub for the world. Teams working in this region enjoy easy collaboration benefits, and their stable economy reduces the risk of attrition.

From an employer’s standpoint, Poland is one of the ideal locations to set up a remote team for a number of reasons:

Ranked 3^rd globally on the HackerRank challenges.
Nearly half, 43.5%, of the population has a tertiary level education across STEM fields.
Salaries in Poland can be up to 50% lower than the average salary in the US or Western Europe. In fact, the average salary is around $25,800, which is nearly 3X less than the salary offered in the US for the same quality of service.
Professionals often work with international companies and are proficient in English. Communication problems are few, and this is key for a remote team.

Brazil

With over 450,000 developers, Brazil has steadily become one of the locations that tech companies choose when hiring or setting up distributed teams. Much like the other Latin American powerhouse, Argentina, the IT infrastructure in Brazil is booming. Tech parks, accelerators, and high-density research centers churn out some of the most talented professionals, most of whom are sure to be assets.

A key reason why Brazil is soon to become the go-to in the future is because of its proximity to the United States. Collaboration is much easier, and top tech companies located in the valley won’t have trouble with the time difference and can work in real-time. Lastly, Brazil offers cost-effective talent that is reliable with high retention rates. The average yearly salary here is $18,043 and as the market isn’t as competitive, the risk of attrition is negligible.

India

India has always been known to be one of the most cost-effective locations for technology-related services. The country has more than 2 million people working within the IT sector, meaning that companies have a rich vein of talent to choose from.

Besides this, tech companies looking to set up remote teams in India also benefit from the fact that it is a cost-effective option and that it has a booming IT market. The average hourly wage for IT professionals in India is between $25 and $49 per hour, and it is possible to work with experts at a significantly cheaper rate. Communication is another plus point as English is a primary language. Combining the largest talent pool with the evolving IT sector, companies looking to set up efficient remote teams needn’t look any further.

According to Gartner, as many as 51% of knowledge-intensive workers like engineers and writers will work remotely by the end of 2021. This seems more than likely considering the vast pool of talent spread around the globe and tech companies are sure to leverage them to the maximum. However, choosing skilled workers from the tech hubs is just one-half of the battle. The other is extracting true value from the exchange. Oftentimes the price-to-quality ratio isn’t all that favorable. This is especially the case with remote software development teams and fixing issues could easily cost twice as much.

Partner with Talent500 to establish global remote teams that deliver. Get access to over 200,000 pre-vetted, location-independent professionals and scale efficiently. Talent500 also offers enterprises the option to establish a global presence through the Employer of Record (EOR) model. Benefit from complete compliance and employee management services from a trusted market leader. To know more, request a consultation online.

EOR vs. Entity: choosing the right model for your business

Posted on September 13, 2021September 14, 2021 by temp

Global expansion has become more of an imperative for businesses than a choice. Setting up a new entity in a foreign country is, however, not an easy task and requires commitment and extensive planning around a long-term business plan, the infrastructure, employment law, compliance, and regulatory frameworks. Less than 25% of US-based companies that expand globally are successful, mainly because they do not understand the local laws of the country they enter. Naturally then, the first step is to decide the most efficient and the most secure way to enter this uncharted territory.

Every company that decides to explore cross-border expansion has two routes.

Setting up an entity

This is the traditional way of expansion, where a company sets up a legal entity in new geography in the form of a foreign branch or subsidiary. Setting this up from scratch requires multiple steps that can take anywhere between a couple of months to over a year. To lay the foundation for their new business, the most important steps include getting the entity registered with the country’s local authorities, opening a local bank account, consulting with a team of local legal, financial, and HR consultants, ensuring compliance with tax and statutory laws, and recruiting their team.

Employing an EOR

With the Employer of Record, you don’t need to have a legal presence in the country. An EOR is a third-party organization that specializes in handling all the legal and operational requirements of building a global workforce for its client companies. They manage the hiring, payrolls, taxation, benefits, and legal compliances for this new branch, relieving the company of the time and risks of doing it all themselves.

Picking the right fit

Every company deals with its own set of requirements and restrictions, which is why there is no one-size-fits-all solution when it comes to global expansion. The trick is to find the expansion model that works best for you.

Here are some key questions companies need to ask themselves:

1. What is the purpose behind setting up operations in a foreign country?

Is it for entering a specific market long term, or getting access to certain resources that are available exclusively at a particular place? If yes, then setting up an entity might be a better option for you, keeping in mind that most countries offer a wide range of tax benefits and write-offs in the case of foreign direct investment.

However, if your reason for expansion is to tap into the talent pool of a specific country, or for the completion of a short-term project in a new country, then an EOR could be a more viable option.

2. How much capital are you willing to invest?

One of the biggest considerations when setting up a subsidiary or foreign branch is the money that you will have to invest. Take into account estimates for the costs of a physical structure/address, registering with local tax and labor authorities, opening local bank accounts, setting up payrolls, and linking up with the correct official authorities. Seems like a handful? Now add the cost of liaising with specialist tax consultants and employment lawyers, as you will have to constantly stay in touch with them. Finally, that leaves us with the recurring cost of maintenance and winding up (if things don’t work out). These costs will be significantly lower in the case of an EOR. Being in the business of setting up and managing global teams, an EOR will have in-house financial and legal consultants, as well as experienced personnel to manage the various aspects of talent acquisition and retention.

3. Are you committed to establishing a long-term presence in the new geography?

If you are confident that entering this market is the right decision for the business, or if the business already has a roster of loyal contractors in the chosen country, entity setup can be a worthy commitment. Most countries want to increase foreign infrastructural investments and therefore offer numerous tax exemptions to companies setting up their foreign branches. On the other hand, if you’re still weighing your options, or want to set up this new foreign branch only for a short-term project, then entering through an EOR would be a safer bet.

4. What is the timeline to begin operations?

If you are certain that you want to establish a firm presence in the foreign market and set up a base for years to come, then establishing an entity might give you better returns in the long run. However, setting up an entity can take anywhere between 3-12 months, depending on how investment-friendly the local legal regime is. Alternatively, if your presence on foreign soil is for a limited period of time – like a special project for a third party, completion of a time-bound goal, or if you want to test the waters before a full-fledged investment, then the EOR route is better suited. With an established base in the desired country, the EOR enables you to start operations almost immediately.

5. What is the desired size of the workforce?

The size of your team plays an important role in determining the route of expansion. When it comes to hiring and onboarding a limited number of employees, an EOR will certainly prove to be faster and more cost-effective. EORs have their own set of trained experts who can handle these processes, thereby reducing the client’s resources and simultaneously empowering them to focus on other aspects of the business. On the other hand, in the case of larger teams in a single country, having its own foreign entity enables companies to operate without any restrictions, while facilitating faster decision making.

6. Would the business benefit from the presence of local leadership?

Companies today rely on employees around the world, especially in leadership roles to leverage their diversity and local expertise to gain a competitive edge. In the case of an entity setup, businesses can leverage the presence of local leaders to effectively navigate the complex legal overheads and challenges when entering a new market. Conversely, if your new workforce does not require regular high-level decision-making, then choosing an EOR would be favorable.

To sum it up

Whether a company decides to set up a new legal entity or enter a foreign country with the assistance of an EOR, there exist certain advantages and limitations in both these routes. If the agenda behind the international expansion is the establishment of a definite physical and legal presence for a long period of time, then setting up an entity would be favorable. However, if a company wants to expand quickly and in a short duration of time, then taking the assistance of an EOR is immensely beneficial and cost-effective.

We hope that this blog post has been able to give you a holistic view of all the factors that weigh in on your decision; should you want to dive deeper, our team of consultants would be delighted to assist you with more information. At Talent500, we are helping global companies hire, build and manage global teams in 30+ countries by acting as their Employers of Record. We aim to transform high-impact companies by giving them access to a worldwide community of highly skilled professionals transcending geographical boundaries. Sign up here to take your first step towards global expansion!