EXCLUSIVE CONTENT – Portas Global discuss how the PEO model can provide in an uncertain time.
Divorce can be a nasty, drawn-out affair – and Brexit is no exception, as the UK plods on to begin a new life outside of the EU. But with the ‘marriage’ not scheduled to end until March of next year, and with most EU legislation continuing to apply until 31 December 2020, it looks like uncertainty will reign for some time yet.
Which is worrying news for the vast majority of those in employment – none more so than the 47 per cent of highly-skilled EU citizens employed in the UK who are considering leaving our shores within the next three or four years. Not that employment issues are confined solely to Europe and the UK. However, the worry as far as the UK is concerned is that post-Brexit it might end up with a shrinking workforce. Already, we are seeing a skills shortage in some sectors, while even lower skilled EU nationals in the UK are now actively considering their options. But, gloomy as the situation may appear, businesses are ready to meet the challenge.
In fact, 2018 has been dubbed The Year of Action following a Mercer survey of 800 business executives, 1,800 HR professionals and 5,000+ employees from 21 industries and 44 countries. Encouragingly, over 92 per cent of UK companies said they planned an organisation redesign in the next two years.
“That’s all well and good,” said Carlos Ruiz, managing director of Portas Global Ltd, the Nottingham-based company, which manages the payroll, taxes and administration of HR on behalf of employers and employees in over 130 countries. “But in today’s hi-tech age, where advancements are being made daily, we really need to take a closer look at just what employment means.
“In particular, we have to re-think the old adage that employment is about working Monday to Friday, 9am – 5pm. This was part of the industrial revolution movement and we have moved way beyond that in the eyes of new age global recruits.”
The global market
Also, today, more and more companies are now operating in global markets and that in itself presents many complex employment challenges requiring an international perspective combined with a thorough knowledge of country-specific employment practices.
“For multinationals the challenges have never been greater,” said Mr. Ruiz, “what with economic and market changes, new technology, global mobility and demand for more flexible workforces. Not to mention an ever-increasing scrutiny of employment law compliance and the fact that when it comes to global recruitment, the problem is not just about how to find candidates; it is increasingly becoming about where to find candidates.”
Flexibility itself is now a key issue when it comes to attracting new staff. For example, accounting and professional services giant PwC has launched a scheme that allows new employees the option to work whenever they want, and for as few or many hours as they choose.
Why? Purely in response to the “increasing demand from people to work flexibly and forgo traditional working patterns.” Such a “flexible talent network” gives potential staff the option to work for the firm without being tied into a full-time contract and standard working hours. Significantly, the scheme has already received more than 2,000 applicants and represents a shift towards flexible working and an increased focus on promoting a healthy work/life balance, driven by a millennial workforce that has come to expect a different kind of corporate culture.
Similarly, years ago, who would have talked about “employee global mobility?” No one, of course – but today it is an established feature of international work patterns.
Mr Ruiz commented: “There is a revolution gaining momentum that all Recruitment and HR professionals must embrace as part of their search, attraction and retention toolkit. When it comes to global recruitment the same principle can and does apply across international borders. As a Global Professional Employer Organisation (PEO), Portas Global has first-hand experience with this revolution and the obvious impact it has for the global workforce.”
PEOs offer innovative solutions that enable companies to hire employees anywhere in the world, providing a service that is quick, compliant and without the need to set up a legal entity in foreign jurisdictions. PEO clients maintain day-to-day control of their international team members but the global model allows Portas Global, for example, to hire the employees and become their legal Employer of Record.
With its focus on the international employment of permanent staff, Portas Global is able to manage the payroll, taxes and administration of HR on behalf of the global recruiters’ clients and the employee.
“We have a solution to help a company retain its international talent and ensure continuity of employment,” said Mr Ruiz. Just because the UK and the EU will be going through a divorce does not mean a company has to separate from its international employees.
“The benefit of a global PEO model is that it provides an opportunity for businesses, that have a global workforce that might be impacted by Brexit, to strategically plan with confidence,” continues Ruis. “So, in the global PEO space, as long as an employee does not have to be head office based then there is no reason why they need to leave a company’s employment if they return back to their originating country. Remember also, that digital technologies, when effectively deployed, can improve global smart working and remote working possibilities and encourage business growth.”
He said that from the global recruiter’s perspective, the future would be about filling a bigger piece of the puzzle for their client.
“If the talent for the role can be found outside of traditional boundaries (local, regional, country) then one of the boxes can be ticked. But the missing piece of the puzzle is how to employ that individual, with all their amazing skill sets, in another country and ensure they are compliant from a tax and social insurance perspective that applies in the country in which they work. You can’t just simply ask the candidate to send you an invoice because they are not on your payroll.”
“This is where the Global PEO comes into the picture and ensures the final boxes are ticked as their core focus is to manage the payroll, taxes and administration of HR on behalf of the global recruiters’ clients and the employee. Such a partnership will enable transparency and compliance when dealing with international employment regulations.”
Global recruiters work with many suppliers that can facilitate certain aspects of global mobility for their candidates, such as visas, international schools, benefits management and accommodation. However, very few can also support their clients with a compliant global employment solution to manage the local taxes and social insurance contributions for newly hired employees.
“As a Global PEO, we are very much an extension of the global recruitment lifecycle by offering commercially focused solutions and reality checks about the compliance aspects of employing staff across the globe,” said Mr Ruiz, who added that recruiters who are experts at matching skill supply with work demand, while still enabling creativity and ambition for the candidates, would add greater value to their business clients of the future and significantly increase their pipeline of global resources.