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Global teams: the secret to winning the talent war in 2022

Posted on September 26, 2022September 26, 2022 by satya

In the last couple of years, we’ve all become equally familiar with phrases like “war for talent” or “the Great Resignation” of the “Great Reshuffle.” But what’s really happening? Let’s use numbers to put things into perspective:

Over 85 million jobs would be unfilled by 2030, leading to a global revenue shortage of as much as $8.5 trillion, with the shortage of high-tech workers alone accounting for a loss of $162 billion.
The talent shortage in the U.S. has tripled in the last decade, with as many as 69% of employers struggling to fill positions.

The U.S. is struggling with an acute shortage of skilled talent…

Meanwhile, the cost of hiring in the US has increased by the biggest margin since 2001, mainly due to an increase in wages and benefits. The employment cost index (ECI) surged 1.3% in Q3 2021 after rising 0.7% in Q2. This marks the largest gain in the last 20 years!

Employers today are facing the most brutal talent market in history, and there are multiple reasons for this.

Baby boomers are bidding adieu

One of the biggest factors contributing to this decrease in the supply of skilled workers is the accelerated retirement of Baby boomers. Nearly 30 million Boomers retired in the third quarter of 2020, leaving a large gap in the pool of skilled labor. While this was planned retirement for a part of the population, many Boomers retired early due to jobs lost during the pandemic.

Shortage of skilled workers in the younger generations

A large chunk of this shortage is simply demographic – think Japan or many Scandinavian nations, where the rate of birth has remained relatively low for decades. As a majority of Baby Boomers move out of the workforce by 2030, there will simply not be enough skilled workers from the later generations to fill this gap or invest the time and training that many highly skilled jobs require.

Work motivations have changed drastically

Skilled workers today know that they are a scarce commodity, and are not scared of using this as leverage. Professionals today want a significant increase in perks and benefits, better work-life balance, and greater flexibility and autonomy. 97% of respondents would choose some form of remote work in their lives, with 24% agreeing to take a pay cut in order to work remotely.

Professionals in the younger generations are leading the “Great Reshuffle”, with 87% of GenZ professionals in India planning to switch jobs in 2022. The fact that switching jobs does pay is a further incentive. Professionals who chose to switch their jobs got an average salary increase of 14.8%, with workers between 25 and 34 receiving the highest wage increase.

…and there is only one solution – global teams

The exponential demand for remote work opportunities also means that employers now have a chance to tap into a pool of talent that is global and limitless. Empowered by technology and the competitive cost of hiring, some of the biggest companies in the world are choosing to hire highly skilled professionals from different parts of the world and build global teams.

Different models of global teams

As companies rethink the most viable and profitable models of location-independent work, there are 4 major types that have emerged ~

Global capability centers

A GCC or a global capability center is a second, mirror team in a different location, which is generally an offshore tech hub that functions as an individual unit in itself. It mirrors the culture, setup, processes, and governance of the home office while giving the company access to extremely skilled talent at competitive costs. Simultaneously, it also enables the company to penetrate a completely new geographical market by accessing the local talent there. The cities of Sao Paolo, Mexico City, and Buenos Aires are emerging as the hottest tech hubs of LatAm, with Easter Europe and South Asia following suit. India is touted as the Global GCC capital, accounting for 45% of the world’s GCCs, generating an annual revenue of USD 33.8 billion in FY20.

At Talent500, we have helped companies across a multitude of industries, ranging from retail stalwarts like Giant Eagle, Advance Auto Parts, 7-Eleven, and Northern Tool + Equipment, to aviation giant Delta Air Lines setting up their GCCs in India.

Cluster offices/ hub & spoke model

Post-pandemic, a large part of the working population all over the world chose to move to the suburbs or their hometowns to cut costs. Cities like Miami, Austin, and Lisbon are emerging as fast-growing tech hubs, offering a better quality of life combined with a low cost of living. In this setup, the company operates a centralized main office – the “hub”, with more localized satellite offices, the “spokes”.

Following the hub and spoke model, companies like Adyen and MineralTree have chosen to set up their own offices in India with hiring assistance from Talent500.

Employer of record model

For businesses looking to expand globally and access a wider pool of skilled talent without the hassle of setting up a new entity, Employer of Record (EOR) is the solution. The EOR steps in to manage all the legal and operational requirements of building a global workforce for its client companies, from hiring and management of payrolls, to taxation, benefits, and legal compliances in a foreign country.

The EOR model has worked tremendously well for companies like Nike & Space and Time, as well as many upcoming financial product companies like SaaS leader Chargebee, Peach Payments, and Servify with Talent500 acting as their employer of record.

Fully remote

Completely location independent, companies that are fully remote do not have any physical offices or headquarters. Team members telecommute from different parts of the world, working across multiple countries and time zones. With the U.S. seeing a 96% increase in the number of fully-remote employees, it is evident that this model has become immensely popular post-pandemic.

Globally renowned companies GETTR, GitLab, Automattic, Atlassian, and Buffer are fully remote, distributed organizations with no central office.

Top talent hubs to tap into across the globe

The biggest advantage of global teams is the ability to hire superlative talent at a highly competitive cost. Ranging from Eastern Europe and Latin America, to Southeast Asia and parts of Africa, these regions offer an abundance of highly skilled talent, at substantially lower cost of acquisition.

Leveraging the superlative talent in the LatAm region

Colombia

The Columbian IT sector specialises in catering to the ever-growing demand for services required for custom software products such as application development, game development, and mobile app development. The country’s VAT exemption brings in a substantial amount of foreign direct investment, thus supporting IT infrastructure. The average annual salary for a software developer in Columbia is COL$43,247,704, or USD 9900, a highly competitive amount even at a global level.

Argentina

Argentina’s emphasis on higher education and technical skills makes it among the top countries offering niche skills in AI, cybersecurity, cloud computing, Internet of Things, and application programming interface. A 75% tax rebate for startups, and a Teleworking Law makes Argentina a highly preferred destination for hiring remote workers. With only a one-hour difference from the U.S. time zone, working with Argentinian developers in real-time is a big advantage.

Capturing Europe’s tech expertise

Turkey

Free technical education at public universities is a huge contributor to Turkey’s thriving tech population, with about 8.4 million students graduating every year.

Its close proximity to the European time zones (local time is CET+1 and GMT+2) makes it the ideal talent hub for distributed teams. The ease of availability of niche skills like C#, Java, Node.JS, .NET Core frameworks, and React, makes it one of the most popular destinations for hiring remote technical talent.

Poland

The Harvard Business Review ranked Poland 5th among the most tech-skilled labor markets in the world, housing as many as 430,000 IT specialists. Poland consistently ranks as one of the top three countries with the world’s best programmers, known for their technical expertise, code quality and general proficiency with English.

Building cost-effective tech teams in Southeast Asia

India

The emergence of a young and dynamic workforce is a major catalyst in making India one of the most popular destinations for hiring remote tech professionals. The Global Startup Ecosystem Report of 2021 has ranked Mumbai and Bengaluru amongst the world’s top startup hubs, pegging the valuation of India’s tech industry at a whopping $200 billion. Tech professionals in India are known for their expertise with skills like Blockchain, IoT, cybersecurity, machine learning and data science, combined with excellent spoken and written English.

Vietnam

Based on TopDev’s 2021 IT market report, the total number of developers in Vietnam (as of Q1/2021) was 430,000 IT developers, and over 55,000 graduated IT Students from over 153 IT institutions per year. The startup scene in Vietnam is on pace to be the region’s next tech hub; funding reached $2.1 billion in 2021, up from just $48 million in 2017. Vietnam is attracting top tier Silicon Valley venture capitalists, including Goodwater Capital LLC, Accel Partners LP and Altos Ventures Management Inc.

Watch out for these emerging tech hubs

Kenya

According to Findeable’s 2021 Global Fintech rankings, Kenya takes the top spot among African countries boasting 51 tech hubs and an increasingly connected workforce that continues to gain the attention of global VC interest. In a world experiencing digital transformation of its industries, Kenya—a country with an average age of 17—is now able to use technology to catapult into a different league.

Azerbaijan

Post-pandemic, the IT-outsourcing market has grown tremendously in the country thanks to governmental investment in IT infrastructure and internet access. The opening of the Google Technology Users Group in Baku has brought in some of the biggest tech companies to the country. A major factor in establishing Azerbaijan as an outsourcing hub is its highly competitive cost of hiring and talent acquisition. According to Glassdoor, the average software developer salary in Azn 2000, or 1200 USD.

Wondering which country might be the most conducive to building your global team? Find a point-wise comparison here.

Companies of all sizes are struggling with an acute shortage of skilled talent, with Gartner reporting an increase of 10% in the rate of attrition in a single year. With the ever-increasing cost of hiring and an employee-centric talent market, businesses can no longer afford to restrict their hiring strategy to a 30-mile radius.

Be it in any industry, across any part of the world – successful business leaders understand that leveraging the power of a global team is the only way to meet their hiring needs.

At Talent500, we understand that the transition to location independent working is a multi-layered process involving numerous stakeholders and factors. Our team of experts and network of highly skilled professionals are here to help you build your global team in over 50 countries. Ready to take the first step? Set up a consultation with our team here.

Why do you need a global talent acquisition strategy?

Posted on May 1, 2022July 11, 2022 by naveen

The job market is witnessing an unprecedented decline of available workforce post-pandemic. In the US alone there are over 7 million unfilled job positions relative to 6.3 million people looking for job opportunities domestically. There is a clear mismatch between the demand and supply of talent and this gap further widens as most people are looking for work-from-anywhere opportunities and exploring international markets. There is no way companies can fill the open positions by restricting their hiring to local talent.

Fortunately, with an exponential increase in demand for remote work opportunities, recruiters now have a chance to tap into talent sources from anywhere in the world. Global talent acquisition is the future of work and companies certainly need to put in place strategies and policies to hire globally, efficiently. Today, more than ever before, companies have the opportunity to build a globally distributed workforce with the right talent for the right job.

Why companies need a global talent acquisition strategy

Helps in building diversity

Building diversity in the workforce presents so many opportunities for employers that can’t be generated otherwise. According to a PWC survey, over 75% of managers and global companies agreed that diversity is a predominant factor for building a competent workforce. Furthermore, companies with diversity are known to generate 19% more revenue with a 1.4 times higher profitability rate.

There have always been discussions around diversity building initiatives in the workforce, and for some reason, companies have failed to deliver on their promises. But in 2022, when employees now have the option of choosing to work at almost any organization, they are more likely to choose ones that have a strong diversity and inclusion program.

Fosters operational efficiency‍

Operational efficiency is the measure of how smoothly business operations are conducted on a day-to-day basis. When companies have a global talent acquisition strategy in place, it considers cultural and local hiring practices which enable companies to better manage local talent because they are more prepared for behaviors and expectations.

When companies fail to adopt a global talent acquisition strategy, they end up making policies at the country level which only help with the selection and retention of a selected group of talent. This can be disastrous for expansion to new markets as there are clear operational gaps and inefficiencies. Many companies with no global talent acquisition plans are forced to outsource the recruitment process to third-party agencies. However, partnering with the right talent acquisition company can take your company to the next level.

Increases understanding of the local market

With a global outreach plan, companies are not only hiring candidates with different cultural backgrounds and mindsets but are also readying the environment to accommodate these differences. Companies that have diverse teams should plan training for current staff to help them interact with employees from other cultures.

This has far-reaching impacts as apart from embracing diversity, members of the organization also get acquainted with foreign market norms. For companies boasting a global workforce, they are better positioned to navigate through local customs to avoid misunderstanding. This significantly helps the business because it becomes clear as to what sells and what doesn’t in a particular market.

Provides access to a wider talent pool

Hiring globally implies that companies have access to a large pool of talent. However, to truly capitalize on this advantage, an effective global talent acquisition strategy is required. Apart from providing the above-mentioned benefits, it also helps with talent management.

As you continue hiring from different markets, you will have to work with different labor laws, compensation structures, and expectations from potential employees. An acquisition strategy will help in streamlining the entire hiring process to accelerate hiring and managing all the requirements in a local market.

At Talent500 we have been building global teams for Fortune500 companies. We have the tools and talent to help you build globally distributed teams faster. Let’s discuss your requirement, set up a consultation today.

Understanding the costs of a global, distributed workforce

Posted on April 5, 2022 by shanthamurthy

As businesses are recovering from the pandemic, they are realizing the benefits of building globally distributed teams. Industry leaders understand that they can get the work done from anywhere and this is an eye-opener for them. Not only does it result in impressive cost savings, but it also expands the talent pool available for hire, exponentially. Companies can now hire candidates with specialized skills from anywhere in the world.

However, with the freedom of a global workforce come associated costs and risks. When you hire globally, it becomes imperative to know the laws and requirements of each country. HR has to address and deal with policies around international payroll, statutory benefits, and taxes.

This is why understanding the cost of the global workforce is important. You have two options to deal with the compliance associated with global expansion: either set up an entity in each country you want to hire workers from or partner with a global employer of record (EOR) that will act as a single point of contact to manage the local workforce. The second option is more appealing in terms of cost-effectiveness and time. Setting up local entities can be time-consuming and end up working out very expensive. With EORs you can start operating in any country quickly and compliantly.

Evaluating global expansion costs

The success of your global expansion for hiring talent will depend on how comprehensive your understanding of the cost that it entails is. Identify the areas that will require financial and personnel resources such as legal representation, awareness of banking policies, payroll costs and management, research about local tax law, and HR costs and considerations.

These are rarely one-time expenses and will continue to be part of the balance sheet as long as you retain global employees. Another factor to account for are additional costs such as tax filing and accounting support, IT support, statutory obligations, and more.

This is a general outline of what the cost of global hiring looks like when you are not establishing a local entity. If you choose to maintain a local entity, there are several other costs incurred for smooth functioning of your organization. This will include, and may not be restricted to, annual audit costs, property taxes, maintenance costs, HR consultancy fees, and more.

A partnership with an EOR is advisable for companies that can operate entirely online without requiring local physical setup such as IT companies.

Tax compliance costs

Tax compliance costs will significantly affect your global expansion plans. As these costs vary depending on the country, you must take them into account when hiring local talent. For example, France has mandatory employer costs that are around 50% of the employee’s wages. Similarly, many Asian countries have a 20% tax for international employers. There are also cities with little or no tax for global hires such as Dubai.

Fortunately, the EOR you will partner with can take care of tax compliance and the associated costs but depending on the complexity of the local laws, you may end up paying 10% to 30% in additional fees.

It is important to note that some countries have strict severance requirements that can include hidden costs. Some EORs might not discuss severance upfront, this may make monthly costs appear lower but once you decide to terminate the partnership, there can be a costly surprise.

Are you ready to make the decision?

Companies are benefiting from hiring globally. As the distributed workforce is slated to be the future of work, it’s time you weigh the costs of global expansion. It is important to consider tangible and intangible benefits along with the associated costs before you decide to expand internationally. Because setting up a local entity can be costly and time-consuming, a partnership with an EOR is a more viable option.

Familiarizing yourself with how and why employee costs are computed will ensure that you are aware of what costs are involved and can budget effectively. This is important to truly incentivize global talent-hiring benefits.

Talent500 can help you with building a global workforce and managing the associated costs and compliance requirements. We are a trusted partner of start-ups and Fortune 500 companies. Let’s discuss your global hiring plan, request a consultation today.

The power of remote: is your company ready to go global?

Posted on April 5, 2022April 5, 2022 by satya

Post pandemic, one of the biggest changes that we have witnessed has been the sheer increase in the number of people choosing to work from home. According to this survey by Buffer, as many as 97% of respondents would choose to work remotely for some parts of their work week.

The good news? The remote model offers multiple benefits to employers too, from reduced operational costs to access to an unrestricted pool of highly skilled talent. However, building and managing a successful remote team comes with its own set of challenges.

Right from the initial policy framework, to setting up the digital infrastructure and recruitment pipeline, an organisation has to consider a multitude of factors before it’s ready to go remote. Here are 5 areas that you must consider:

Remote work policies

A remote work policy is a set of guidelines that outlines the code of conduct and expectations from all remote employees of the company. These policies often cover work timings, communication expectations, time-tracking processes, data security rules, legal considerations and more. For teams transitioning to remote work, having a policy in place helps eliminate uncertainty and ad hoc decision making at the manager level.

A good place to start is by ensuring that your remote work policy covers the following:

Working hours and availability

Ensure that your remote work policy clearly sets down expectations with respect to working hours, times of availability etc.

Communication channels

An effective communication strategy is the backbone of every remote organisation. Clearly demarcate the preferred channels for both synchronous and asynchronous communication.

Cybersecurity standards

We know that data security is one of the biggest concerns for all remote organisations. Clearly mention all security measures that employees need to take in terms of firewalls, VPNs, antiviruses and usage of public wifi.

Mechanism for availing paid time off

Put down the number of leaves and vacation days, how they are divided and how they can be availed so as to make life easier for your HR department.

Digital capabilities

One of your most important responsibilities as a remote employer is to ensure that your workforce has access to the tools and technology that they need. Much like a physical office where you would set up cubicles, conference rooms, computer systems and desks, your remote workforce will require infrastructural support. This can be divided into three parts:

Hardware

Having a dedicated workspace enables your team members to bring their most productive selves to work. This includes the right computer and attachments like speakers or headphones, a fully functional workstation and an ergonomic chair.

Software

Working without the necessary tools is like running a race barefoot. Ensure your team has access to all necessary licensed softwares like adobe illustrator, Microsoft365, CRM softwares, etc

Remote work tools

Today, there exist multiple tools designed specifically to help remote teams increase their productivity. From synchronous and asynchronous communication, to having a common central repository of all data, these tools help remote teams function as a single unit.

Recruitment essentials

73% of all departments are expected to have remote workers by 2028. Now, more than ever is the time when recruiters upskill themselves in order to have a seamless remote recruitment process.

We recommend dividing this process into office stages:

Assessment and planning

As the most important part of building your remote team, it is important to ensure that you have a clear understanding of the various roles and job descriptions. We also recommend having an organisational chart in place before you start recruiting.

Build your employer brand

According to Gartner, 65% of the candidates surveyed report that they have actually discontinued a hiring process due to an unattractive employer brand. The right EVP (employer value proposition) helps potential candidates understand how their professional goals align with your company’s trajectory. Make sure your careers page includes information about your company’s culture, perks and benefits, employee testimonials and opportunities for growth and learning.

Building a remote talent pool

One of the biggest advantages of working remotely is to be able to hire solely on the basis of skill set and relevant experience, regardless of the candidate’s location. Here are some tips to help you build an expansive pool of talent for recruiting your remote team members:

a) Leverage technology: Thanks to the integration of AI and machine learning into hiring workflows, companies can now post across multiple channels via a single process. Remember to include platforms meant exclusively for remote workers like flexjobs and angel list.

b) Use your social media: Not just LinkedIn, but even your company’s Facebook, Twitter and Instagram accounts are good places to publicise the fact that you’re hiring. If your blog posts receive a fair amount of traction, it’s a good idea to use them for putting out hiring requirements.

c) Employee and user networks: Employee referrals are one of the most effective ways to find and retain new employees. We also suggest sending out feelers in your user base. The added advantage here is that they are already familiar with your product or services.

Preparing for virtual interviews

Whether an interview is conducted in person, or across a computer screen, the qualities that all recruiters look for remain constant. Share all relevant information like the date and time of the meeting, name of the interviewer and any other such requirements a few days prior to the interview. We also recommend preparing a standard list of questions and a hiring rubric for a completely objective interview. This has the twofold benefit – it ensures that the interview covers all required areas, while simultaneously guarding against any bias that might creep in.

Onboarding your distributed teams

The right onboarding process can improve employee retention by 82%. Effective onboarding becomes increasingly important for remote organisations as it plays a major role in helping new employees find their place within the organisation. In the absence of the same, HR departments at remote organisations need to strategically build a highly engaged and interactive onboarding process.

We recommend dividing your onboarding process into three parts – pre joining, first day, and post joining. This enables you to structure all activities in a chronological order and maximise the results.

Compensation and benefits

The remote workforce knows exactly what perks and benefits it wants, and it isn’t a high-end coffee machine or foosball table. ‘Flexible working hours’ and ‘the ability to work from home’ are some of the most valued employee benefits according to millennials.

When recruiting globally, employers also need to factor in the statutory benefits of the employee’s country of residence. For example, Indian law requires that all companies with over 20 employees make contributions to a provident fund. Most countries will require employers to contribute to provisions made towards health insurance, pension funds, or accidental insurance. As you decide your remote recruitment strategy, it is important to factor the cost of providing these benefits to your remote workforce.

Legal and regulatory compliance

Access to a global team also means that you will now have to ensure compliance with the employment laws, taxation regimes and legal requirements of the countries of residence of your foreing employees. While you might not have to worry about the taxation percentages for the contractors you hire, all full time employees will be subject to taxation in their country of residence.

Similarly, every country has its own employment laws and regulations, non compliance with which can result in hefty fines. A sizable amount of the initial cost will go towards registration and paperwork, and consulting legal and financial experts.

A good way to hire across multiple countries without investing a substantial amount of time and capital is to avail the services of an employer of record. An Employer of Record is a third-party organisation that serves as the legal employer for a company’s foreign employees. The EOR undertakes the management of all workforce-related aspects – from hiring & payrolls to taxation, employee benefits, and legal compliances.

If there is one thing that is common to all companies that have thrived in the last two years, it is their ability to function remotely. As you take the first step towards building a remote organisation, remember that its success hinges heavily on the foundation that you lay much before you start recruiting.

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!