Landmark Global Study by Atlas Highlights Compliance is Key Barrier to International Expansion
Global survey of over 500 senior HR leaders accounting for $189billion in global turnover published following macro-economic volatility reshaping how businesses will scale internationally in 2024 and beyond. Over 80% of companies agree global layoffs have made them consider expanding into new markets for the right talent, with the same number changing their approach to hiring in order to be more cost effective.
Appetite to expand into new markets is unwavering: In the next 12 months, 87% of companies are planning to enter a new geographic market. This follows 81% who have invested in a new geographic market in the last year.
Underpinned by a struggle to find talent: Over 8 in 10 (82%) companies agree that recent global layoffs have made them consider expanding into new markets to access the right talent.
Compliance is key barrier when navigating complex regulations abroad: Over three in five (63%) HR decision-makers find that keeping track of changing regulations across multiple jurisdictions is particularly challenging.
Investment in HR technology on the rise: Nearly 9 in 10 (89%) said they would increase their investment in HR technology over the next 12 months, but finding the right technology fit is the biggest barrier for adoption (58%).
September 2023 – Atlas, an industry leader in Employer of Record (EOR) solutions and technology, today releases its 2023 Global HR Study, the EOR industry’s most comprehensive report to date, exploring the impact of technology, evolving skills, talent shortages, and regulations on businesses globally.
Set against a backdrop of significant macroeconomic and political volatility, findings from the survey of over 500 HR decision-makers in large and SME companies across the U.K., UAE, Singapore, Australia, and the USA, reveal that 82% of companies are considering expanding into new markets to find the right talent.
However, the survey finds that despite talent being the number one priority for HR-decision makers, concerns about compliance and a lack of local employment regulation knowledge remain major blockers. In fact, three in five (60%) companies find it particularly challenging to ensure compliance with local regulations.
Particularly challenging aspects of staying up-to-date with evolving employment regulations and HR policies:
Challenge | Percentage |
|---|---|
Keeping track of changing regulations across multiple jurisdictions | 63% |
Ensure compliance with local regulations | 60% |
Investing in the necessary resources to keep up to date | 53% |
Understanding the complex legal language | 52% |
To navigate the complex regulatory landscape, the survey shows that businesses are increasingly turning to HR technology, with over two in five (41%) companies reportedly “very likely” to streamline hiring and compliance using technology over the next 12 months.
Chelsey Griggs, Chief Strategy Officer at Atlas, comments: “A volatile business landscape and fears of a prolonged global downturn means that employers are looking for new ways to be more flexible and economical with their growth plans. Effectively accessing talent and successfully venturing into new markets necessitates a nimble and adaptable partner capable of navigating local laws and regulations, both domestically and internationally.
This study reaffirms that, despite the high appetite to enter new markets, expanding is a financial risk. Of those surveyed at large companies, over half (54%) are willing to allocate over 25% of annual turnover to expanding into new markets. Our modelling shows this as at least $204k – which, if done unsuccessfully and without regards for compliance, creates an expensive mistake.
The study revealed that over half (59%) of businesses don’t often review and update HR policies. Further, 3 in 5 (60%) find it particularly challenging to ensure compliance with local regulations. This is a potential risk to a successful expansion as businesses might be unable to remain compliant with local and international employment laws.
However, new solutions are emerging to address the new ways that we work. Employer of Record service providers, like Atlas, are one of the pioneering forces of this new world as they enable the fast expansion of people ops into new regions for just a fraction of the cost of setting up entities, allowing businesses to operate and hire talent internationally. Organizations that are nimble enough to adapt to the changing landscape will be the ones that will benefit the most in the next decade.”
The data follows the recent release of The Global Employer of Record Report 2023 which explores the emerging labour force trends and how EOR solutions are playing an important part in that, including facilitating global expansion and the hiring of international talent, retaining employees, digital nomad visas and supporting DEI initiatives.
About Atlas
Atlas enables innovative companies to compete in a global economy, believing that businesses should employ whomever they want, wherever the talent exists. As the largest Direct Employer of Record (EOR), Atlas is a technology platform that is supported by experts and delivers flexibility for companies to expand across borders, onboard talent, manage compliance, and pay their global workforce without the need for a local entity or multiple third-party providers.
To learn more about Atlas’ global direct EOR services, visit our website and connect with us via Twitter, LinkedIn, Facebook.