International hiring skyrocketed in 2021 among businesses in the U.S. and U.K. after the pandemic replaced the office-work paradigm with a remote-first alternative.
Firms most commonly hire internationally because they want to expand into other markets, increase their market share in other countries or both, or find new talent, according to the “Cross-Border Payroll and Contractor Payments Report,” a PYMNTS and Nium collaboration based on a survey of 150 U.S. executives and 100 U.K. executives.
Get the report: Cross-Border Payroll and Contractor Payments Report
But international hiring isn’t without its drawbacks, and paying and managing international workers, particularly, presents a diverse array of challenges. Firms especially struggle with handling taxes when paying international workers, with 47% saying they faced that challenge when paying cross-border workers.
Other common challenges include regulatory compliance, data security and currency fluctuations. Those are cited by 44%, 43% and 38% of firms, respectively.
Enlisting Experts Who Can Remove Complexity
Firms with payment-related challenges tend to use private agencies more than firms that don’t, PYMNTS found. For example, 75% of the firms that reported struggling with taxes used a private agency, while only 53% of the firms that reported no payment challenges used a private agency.
Spencer Hanlon, Nium’s global head of travel payments, recently told PYMNTS that when it comes to the payment orchestration landscape, the biggest challenge is the complexity of paying internationally and dealing with licenses and local practices in multiple jurisdictions.
Read more: Travel Rebound Helped by Business Use of Virtual Credit Cards
He found that the most successful players understand the complex, ever-evolving regulatory environment and the infrastructure and practices specific to each market and can do the heavy lifting on behalf of their customers.
“It needs experts who understand and dedicate their time to ensuring that that complexity is removed, and who can build a network that is unrivaled in moving money quickly, efficiently and at an affordable cost with a high degree of visibility and speed,” Hanlon said.
Innovating Capabilities
Facing challenges largely leads firms to use private agencies. It also suggests the importance of private agencies in hiring decisions and the payment and management of international hires.
In simple terms, newer and smaller firms faced with international hiring and management challenges are more apt to use private agencies than more established firms.
Due to these challenges, most firms are interested in innovating their international payment capabilities. For larger organizations that want to scale their global workforces, innovation in cross-border payments is especially important.
As international workers continue to gain prominence, firms of different sizes and with varying numbers of international hires will face a unique set of challenges. For each category of firms, technology solution providers are well-positioned to meet their needs.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
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