Foreign employment laws a minefield for tech recruitment

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Foreign employment laws a minefield for tech recruitment

Despite more availability in talent-strapped markets.

Global tech giants slashed tens of thousands of specialist technical roles in 2022, flooding the global market with previously hard-to-find expertise from around the world. But before you drink from the overflowing talent pool, experts warn, you’ll need to understand your legal obligations.

It’s a point that some observers worry has been lost on the likes of Elon Musk, whose weeks-long Twitter spring clean last year sent thousands of staff packing, kicked off a flurry of wrongful-termination lawsuits, and saw thousands of workers take severance packages rather than agree to Musk’s demands of working “long hours at high intensity”.

Musk should have read up on European employment law before he started firing employees by email, and spoken with unions before he demanded uncompensated overtime, according to Palle Hoffstein, a union representative and Swedish video-game designer with Rainbow Six publisher Massive Entertainment – whose recent twitter thread highlighted just how messy the situation could become for Twitter.

Dismissing employees may be straightforward in some jurisdictions, Hoffstein pointed out, but in others it requires employers to demonstrate a long period of non-compliance with corporate rules, potentially including steps such as written warnings, negotiated compensation, governmental approvals, and arbitration.

“Elon has taken over a global company and is acting like it is a purely American entity,” Hoffstein said.

Twitter is just one of a string of companies that have sharpened their knives, rushing to reverse pandemic-era hiring sprees that were fuelled by easy access to contract and remote employees anywhere in the world.

And while recent research by Remote found that US companies are the world’s most likely to recruit employees locally – just 30 percent say they’re looking remotely – in other countries the race to hire skilled overseas staff is already well advanced.

43 percent of UK respondents, for example, said they have adopted remote work as an opportunity to hire staff for jobs that they can’t fill domestically – and around seven in 10 are targeting traditional talent hubs including Melbourne, Tokyo, and Paris.

Some 58 percent of organisations are currently running what Gartner calls a ‘borderless workforce’ in which they employ technology talent in other countries, while a further 27 percent of business leaders are looking into it.

That’s double the proportion than when the pandemic began, Gartner analyst Gabriela Vogel noted, saying the shift had changed borderless technology hiring from the exception to the rule.

“Today in the professional world location is fluid, the market is global, and the talent competition is agnostic as we are all competing under the same flag – technology,” she explained.

“Countries are losing talent to other countries, the public sector is losing talent to the private sector, and all the verticals are in the same situation. There are no more competition boundaries.”

Opportunities and risks for Australian companies

The removal of long-standing geographic boundaries has created opportunities for Australian companies struggling to find enough of the niche skill sets they require locally – particularly given years of problematic migration restrictions that left companies struggling to recruit skilled staff in tech, sales, marketing, and a myriad of other business areas.

The 10 countries whose tech communities are being tapped the most for staff are: India, the United Kingdom, Germany, France, Spain, the United States, Italy, Poland, Portugal and Brazil, according to Gartner.

Simultaneously managing the intricacies of employment law in each of those countries requires local knowledge and resources that most companies simply do not have, according to employment solution provider Remote's chief revenue officer Chris McNamara.

“Only large companies have traditionally had the legal and human resources required to manage foreign employment contracts within the context of local employment obligations,” he explained.

“The recent surge in tech company layoffs presents an opportunity for Australian companies to cherry-pick the best talent from around the world, but it’s important that they don’t blindly bind themselves to obligations that could come back to bite them in the future.”

Remote, which facilitates overseas workplace compliance for companies hiring remote workers, saw business soar during the pandemic and commenced operations in Australia in September to give local companies more confidence when dipping into the global talent pool.

Sourcing expertise overseas, McNamara said, helps Australian companies find specialised talent, enter new markets, increase the diversity of their team, scale up their operations cost-effectively, and provide round-the-clock support for clients.

The company’s ‘Employer of Record’ approach – in which it maintains legal entities in many countries around the globe – ensures Australian companies can hire employees living in other countries in compliance with all applicable local labour laws. Australian companies can broaden their talent pool while Remote provides a great employee experience throughout the full lifecycle of employment, from onboarding all the way through termination.

Issues such as pension enrolments and contributions, tax, health insurance, privacy compliance requirements, equity incentives, and more can be managed across one or many countries simultaneously.

Such support unlocks the potential of global employment markets for companies of any size, Gartner's Sanchez-Reina said, and helps to avoid the costs and risks of doing it alone.

“There are certain constraints that hinder the adoption and expansion of a borderless operation,” said Sanchez-Raina.

“They range from complexity of administration support [and] culture issues to security and legality concerns.”

McNamara believes Remote’s Australian operations will provide new options for local companies that are struggling to fill technical and other business roles amidst Australia’s worsening skills shortage.

“Being a contractor is good for some people, but others want to have stronger ties,” he explained.

“By providing employment compliance as a service, we can help companies employ foreign workers legally and retain them with locally relevant benefits packages and perks that help them gain the edge in a tough hiring market.”

Australia’s National Skills Commission updated its Skills Priority List in 2022, adding 133 new occupations to the list of positions now identified as being in shortage and bringing the total number to 286. 

Software and applications programmers were the second most in-demand profession, while ICT business and systems analysts ranked seventh.

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