Global hiring: Big opportunities, bigger responsibilities
Expanding internationally can open up exciting opportunities, such as accessing new talent, markets, and skills, but it’s not without risks. For HR teams already stretched thin, tackling compliance across multiple regions can feel daunting. Missteps can lead to hefty fines, legal issues, or reputational damage.
To help, we’ve outlined five of the most common compliance challenges growing businesses face and some practical ways to navigate them. These aren’t scare tactics; they’re real challenges we’ve seen businesses struggle with, and we’re here to help you sidestep them.
1. Employee Lifecycle Management: More than just compliant hiring
What it is:
Employee lifecycle management is about more than just compliant hiring and contracts. It spans every phase of an employee’s journey, from onboarding and probation periods to certifications, promotions, redundancies, and even post-employment admin like deregistering with local authorities. Each stage is filled with opportunities for compliance issues, especially when scaling across multiple regions.
Why it matters:
- Overlooked processes create big risks: Missing probation deadlines or mishandling redundancies in countries like South Africa, where strict labour laws govern notice periods and performance improvement plans, can lead to fines, legal disputes, or invalid contracts.
- Retention and morale: Retention and morale: A poorly managed lifecycle damages trust, increases turnover, and weakens your employer brand. According to a recent survey, nearly 1 in 10 employees leave a job within 90 days of joining, often due to inadequate onboarding and management practices
- Scaling inefficiencies: When lifecycle processes aren’t streamlined, bottlenecks form, time is wasted, and compliance risks multiply.
Data spotlight:
- In South Africa, probation periods aren’t just time-bound; they require performance feedback, improvement plans, and fair processes for terminations. Mishandling this is one of the top causes of disputes brought before labour courts.
- PwC’s report on workforce challenges revealed that 41% of HR leaders experience compliance issues tied directly to lifecycle processes like terminations or severance disputes.
How to manage it:
- Build scalable systems: Automate lifecycle tasks like probation tracking, certification renewals, and legal deadlines. Centralised systems reduce errors and free up valuable HR capacity.
- Plan for the full lifecycle: Before you hire, map out how you’ll handle key lifecycle stages in that region, from onboarding to exit. This includes understanding local severance laws, deregistration costs, and notice periods.
- Bring in expertise when needed: Partnering with local professionals or global hiring experts helps ensure compliance at every stage while giving your team room to focus on employees, not paperwork.
Pro tip: Start by streamlining one lifecycle stage, like probation periods. Aligning this with local laws can immediately reduce risks and improve employee trust.
👉 Check out our Hiring and Firing Guide for region-specific insights on navigating the entire employee lifecycle here.
2. Misclassifying Contractors and Employees
What it is:
Misclassification happens when a worker is wrongly classified as a contractor instead of an employee, or vice versa. Each type has different legal rights and tax obligations, and the rules can vary widely by country.
Why it matters:
- Financial penalties: Misclassified workers may claim retroactive employee benefits, such as holiday pay or pensions.
- Reputational damage: Lawsuits or public disputes about worker rights can harm your brand.
- Operational risks: Misclassification disputes can impact employee morale and productivity.
How to manage it:
- Conduct role assessments: Regularly evaluate job roles to ensure correct classification based on current duties and local legal definitions.
- Provide manager training: Educate managers on the distinctions between contractors and employees to prevent misclassification at the hiring stage.
- Local experts, like those at Teamed, can help audit your classifications and ensure your contracts are compliant with local laws.
Pro tip: If you’re unsure whether your current contracts are fully compliant or if a worker should be classified as an employee or contractor, we’ve built a simple tool to help. Our Contractor vs Employee Quiz can guide you through the key considerations and flag any potential risks.
3. Tax Compliance and Contributions
What it is:
Each country has its own rules for taxes, social contributions, and payroll filings. Staying compliant requires keeping track of deadlines, calculating the right amounts, and filing the correct paperwork.
Why it matters:
- Hefty fines: Missing a single tax filing can result in steep penalties.
- Double taxation risks: Mismanaging tax treaties between countries could mean paying the same taxes twice.
- Operational impact: Tax audits can disrupt day-to-day business and take time to resolve.
How to manage it:
- Use payroll systems or partners with deep expertise in local tax laws to ensure timely and accurate filings.
or,
- Maintain a compliance calendar: Create a centralised calendar with all tax filing deadlines for each operating country to prevent missed filings.
- Engage local tax advisors: Consult with tax professionals familiar with regional laws to navigate complex tax treaties and obligations.
Pro tip: Managing international taxes doesn’t have to be complicated. A trusted global hiring partner can handle compliance and contributions for you. Learn more about international payroll solutions.
4. Understanding Local Labour Laws
What it is:
Labour laws vary by country, covering everything from benefits and working hours to probation periods and termination procedures.
Why it matters:
- Compliance risks: Failing to meet local requirements can lead to lawsuits or penalties.
- Hiring roadblocks: Without competitive, compliant contracts, attracting top talent is harder and could lead to e.g. legal procedures with union representatives.
- Financial setbacks: Missteps often result in fines, compensations, or settlements.
How to manage it:
- Tailor your employment contracts to meet local standards. Working with global hiring partners can ensure compliance without the guesswork and added strain to your team.
5. Data Organisation: Keeping employee data safe, accessible, and efficient
What it is:
Managing employee data across multiple regions quickly becomes chaotic. Different countries often require separate systems for payroll, compliance, and record-keeping. Without a single source of truth, businesses risk losing track of critical information, like work permits, certifications, and local tax filings.
Why it matters:
- Operational inefficiencies: Juggling multiple systems is a recipe for confusion. If you have a separate payroll provider for every country, keeping track of deadlines and data becomes overwhelming.
- Compliance risks: Disorganised records make it hard to stay ahead of renewals and legal requirements. Expired work permits or missing certifications can result in fines or disrupt operations.
- Employee trust: People expect their sensitive information to be managed securely. Poor data organisation damages trust and could hurt your reputation as an employer.
Data Spotlight:
- Deloitte found that 32% of businesses struggle with compliance due to fragmented HR systems.
- A Forrester survey showed that 64% of employees trust companies more when their employment data is transparently and securely managed.
How to manage it:
- Centralise your systems: Use a single platform to manage employee data for all regions. This makes it easier to track compliance and access records when needed.
- Automate key tasks: Tools that send alerts for deadlines, like visa renewals or tax filings, reduce the risk of missing critical dates.
- Stay audit-ready: Keeping a digital audit trail of all employee records ensures you’re prepared to provide compliant documentation at a moment’s notice.
Pro tip: Centralised platforms don’t just improve compliance; they save time and create consistency across the organisation. If you’re scaling quickly, this can be the difference between smooth growth and chaotic bottlenecks.
👉 Learn more about simplifying global hiring and chat with our team → book a call with our hiring experts here!
How great global hiring partners simplify compliance
Global compliance can feel like a minefield, but you don’t have to tackle it alone. A reliable hiring partner can guide you through the complexity while keeping you compliant and your team focused on strategic growth.
Here’s how a great partner can help:
- Expertise on local laws: Regional experts handle compliance, payroll, and benefits so you don’t have to.
- Tailored solutions: Contracts and benefits customised to fit your goals and the laws of each country.
- Secure data handling: Systems that prioritise employee data protection and meet global standards.
Ready to make global compliance stress-free?
Global hiring doesn’t have to be overwhelming. By working with a partner like Teamed, you can focus on growing your team while we handle the complex details.
👉 Chat with our team to get started.
Rachel Gething, People Operations Manager at Data Science Talent:
“Teamed feels like an extension of our team. They just take care of compliance so seamlessly that we never have to worry about it. Their human touch and expertise make all the difference.”
