Global employment outsourcing allows expanding businesses to overcome the challenges of cross-border employment. This includes payroll, benefits management, tax compliance, legal onboarding, and more.
Besides the fact that employment outsourcing facilitates international employment, there are many other ways in which businesses benefit from outsourcing global employment to third-party service providers. So, what are the advantages of global employment outsourcing? And are there any drawbacks to outsourcing employees?
Employment outsourcing, also commonly referred to as outsourcing employees, describes a business practice under which organizations outsource their employer responsibilities to an external service provider. The latter is then contracted to manage all things HR, employment, compliance, and payroll. Service providers that specialize in such employment services include Professional Employer Organizations (PEO).
Global employment outsourcing takes the idea of outsourcing the employment function one step further. In the context of global expansion, employment outsourcing is a solution businesses use to hire international employees in jurisdictions where they don’t have a legal entity. This typically means using an Employer of Record (EOR) service.
Global employment outsourcing holds several advantages for both the business and its employees. Businesses benefit from outsourcing their employment responsibilities to a third party in the following ways:
Enhanced compliance and risk management: Outsourcing all things employment to a third party that specializes in employment services ensures compliance with employment, payroll and tax rules. Especially for organizations with employee populations in several countries, this significantly decreases the overall compliance risk.
Quick market entrance: One of the main advantages of global employment outsourcing is that it doesn’t require establishing a legal entity in the jurisdiction for the sole purpose of being able to hire employees. This makes entering a new market a lot quicker and easier.
Focus on core business: Outsourcing certain business functions and tasks is always about freeing up resources to focus on more important tasks. Employment outsourcing is no exception to that.
Cost savings: Cutting costs is another main driver for outsourcing employees. Paying an external service provider to handle employment matters often means getting better results at a lower cost. In global employment outsourcing, this is mainly due to the fact that there is no requirement to pay for incorporation.
Further advantages that are also beneficial to the employees include:
Local benefits and compensation standards: Despite it being called global employment outsourcing, outsourcing employees happens on a local level. This means that foreign employees hired through an external service provider receive a compensation and benefits package that matches local standards.
No need to relocate: Global employment outsourcing enables cross-border employment, which means that employees can take jobs with foreign employers without having to go through the trouble of employee relocation.
Less errors in HR and payroll: If payroll is late or important forms aren't filed on time, it’s usually the employees who feel the repercussions. Outsourcing crucial employer responsibilities such as payroll and HR management to a specialized service provider significantly reduces the risk of errors in this department.
Perceived loss of control: Some businesses struggle with the idea of giving up control over something as important as managing employment compliance and everything related to it. Depending on how the organization operates, outsourcing employment might seem like losing control over employees and crucial business processes.
Reduced sense of belonging: Global employment outsourcing might have a negative impact on the employee’s sense of belonging. When employment contracts and payslips are signed by a different organization than the one the employee actually works for on a daily basis, this can lessen the employee’s feeling of loyalty towards the company.
Dependence on an external service provider: When outsourcing global employment, the responsibility to make sure everything is under control is on the service provider. A global employment solution should normally allow businesses to gain peace of mind, knowing their employment compliance is in good hands. However, depending on the chosen outsourcing model, at least a part of the liabilities arising from the employment may still be on the organization that uses the service for outsourcing employees.
The Lano Academy is for informational purposes only and should not be construed as legal advice. Lano Software GmbH disclaims any liability for any actions you take or refrain from taking based on the content contained in this article.
CONTRATA DONDE SEA
Contrata e incorpora empleados en el extranjero sin abrir entidades
Contrata, gestiona y paga a autónomos en todo el mundo
PAGA EN TODAS PARTES
Consolidación global de nóminas
Unifica las operaciones de nómina en todos tus países
Gestión de nóminas en varios países
Paga a tus empleados en otros países
HÁGASE SOCIO
Únase a la red Lano de socios locales de nómina
X
Hágase socio afiliado de Lano para empezar a ganar comisiones
Explora el ecosistema de integraciones y socios de Lano
Descubra cómo Lano puede ayudarle a crecer y pagar a su equipo internacional
EMPLEO GLOBAL
Contrata a los mejores talentos en cualquier lugar
Contrata empleados en países donde no tienes entidad jurídica
Prueba nuevos mercados sin el riesgo ni el coste de abrir entidades locales
Reubica y fideliza a tus empleados
Mantén el talento que se marcha a otros países
Convierte a los autónomos en empleados
Incorpora a los autonómos a tiempo completo de manera legal
NÓMINA GLOBAL
Gestiona las nóminas de todas tus entidades y proveedores en un único lugar
Implanta nóminas en nuevos países
Establece y gestiona nóminas en conformidad en cualquier país
Cambia los proveedores locales de nóminas
Sustituye a los proveedores de bajo rendimiento por partners de Lano
Realiza pagos transfronterizos
Paga a tus empleados en todo el mundo en moneda local
CASE STUDY
Descubre cómo PrestaShop se expandió en cuatro países en sólo seis meses con Lano
RECURSOS
Todo lo que necesitas saber para contratar en el mundo
Conoce las mejores prácticas para gestionar las nóminas de forma global
Todo lo que necesitas saber para contratar en el mundo
Compara los costes de pagar en todo el mundo con Lano
APRENDIZAJE
Aprende a utilizar y sacar el máximo partido a Lano
Mantente al día de las noticias, contenidos y mucho más de Lano
Explore nuestro glosario de términos de recursos humanos y de nómina
Learn all you need to know about global payroll and hiring
ACADEMIA
Conviértete en un experto en contratación global y nóminas
Gain insights into how much it costs to hire remotely in a country
Precios
CONTRATA DONDE SEA
PAGA EN TODAS PARTES
HÁGASE SOCIO
EMPLEO GLOBAL
NÓMINA GLOBAL
RECURSOS
Precios
English
Français
Deutsch
Español
© Lano Software GmbH 2024
English
Français
Deutsch
Español