I recently had the privilege of partnering with atlas to co-author “The Global Employer of Record Report 2023”, a first-of-its-kind report that explores key trends and insights shaping the future of work and the growing importance of the agility-rich Employer of Record (EOR) service model in the modern HCM ecosystem.
The report includes insights and emerging trends for HR leaders to consider over the coming year, regional workforce trends, employer of record service adoption details by geography, and key considerations in navigating the current global landscape as an HR decision-maker. Download the report here: https://rb.gy/q0z2y
Below are my Top 5 takeaways from the report.
1. Expect a headwind of volatility.
Employers face a headwind of volatility and economic, geopolitical, environmental, and technological disruption. Navigating today’s digitally driven economy requires the capability to predict and “flow” with market demands, changes, and volatility. Organizations must become highly agile – capable of keeping up with the pace of change, moving with purpose, and proactively adjusting quickly to innovate, differentiate, and sustain growth.
Becoming an agile organization requires a modern, insights-driven, resilient, and scalable HR operating model that can support the organization’s strategic ambitions by attracting and developing top talent and skills to enable workforce alignment: the right people with the right skills, doing the right things, at the right time.
2. Digital disruption will provide a tailwind of human potential.
Digital technology remains the essential driver of business transformation and is central to navigating expected continued disruption. The early onset of large language models (LLM) and generative AI (artificial intelligence) has quickly found its way into the workplace and is poised to leave the global workforce with a broader skills divide, with employers globally estimating that 44% of worker skills will be disrupted over the next five years.
Cognitive technologies (AI, ML, NLP) are advancing rapidly and gradually scaling to address common use cases, which will profoundly impact daily life, especially in the workplace. These powerful technologies will accelerate workforce productivity, efficiency, and effectiveness, but employers must balance their use.
These technologies should be seen as something other than a replacement for the human workforce. Instead, they should be considered solutions to remove manual, labor-intensive, often undesirable tasks, allowing workers to shift focus to more value-added activities and enable new, more modern, technology-driven roles to evolve.
But transformation is more than technology investments alone. It requires highly skilled human talent – people are essential to transformation and strategic success. With a growing talent and skills shortage already stressing organizations and their HR teams globally, attracting and retaining top talent will remain an accelerating and significant hurdle to transformation and strategic outcomes.
3. The future of talent and work will be borderless.
Finding and retaining top talent has become incredibly challenging and only looks to accelerate in difficulty as we move forward. The 2023 WEF Future of Jobs Report found that over half of employers indicated difficulty in solving the skills gaps locally and their inability to attract talent as the primary barriers to transforming their businesses to remain competitive.
Agile HR organizations leverage methods like total talent strategies to remain flexible in adjusting quickly to market change and strategic initiatives and demands. By leveraging a strategic mix of full-time equivalent and contingent workers (independent contractors, freelancers, project-based workers), the organization can scale up or down with the right skills at the right time to act quickly on market opportunities.
The hyper-competitive jobs market requires an agile approach, and employers must seek and engage skilled talent pools beyond traditional means. This requires tapping into nontraditional talent pools of gig workers, independent contractors, underserved populations, and workers beyond their home market and international borders.
The future of talent and work will be borderless, and the war for talent will be won in the global marketplace by the most creative, flexible, and agile firms.
4. The risks abound.
Remote and hybrid work is another essential component of an agile talent and skills attraction strategy and a key flexibility enabler in the modern employee experience where hyper-personalization is the expectation. The rise in remote and hybrid work means organizations now have access to a deep global pool of skilled talent beyond their home market and borders.
While these modern talent strategies are essential in the agile HR organization of the future, they come with a unique and complex set of risks and challenges. The misclassification of a single worker can be detrimental to the organization’s strategic path by exposing employers to costly and time-consuming legal challenges, fines, penalties, and retro payments for underpaid or missed statutory entitlements.
Avoiding these headaches and costs and managing a globally dispersed talent pipeline and workforce requires proper legal business nexus and a keen understanding of local employment regulations in each country of operation. It also requires modern technology infrastructure, actionable people insights, deep compliance expertise, localized employment, in-country HR capability, and a strategy for managing each. It requires a global workforce platform of people, processes, technology, and insights.
5. Global Employer of Record is a Must-Have Agility Lever.
The convergence of modern talent demands with digital technology advancements and accelerating remote working trends have introduced a new breed of technology-enabled, global employment platform solutions capable of supporting organizations with an agility-enabling lever for executing strategic initiatives.
At its core, the global EoR solution offers C-Suites a turnkey, compliant global HR operating model that provides a vehicle for rapid, scalable market entry and unlocks opportunities and talent in more than 190 countries. By leveraging existing EoR provider investments in operating entities, localized compliance expertise, and technology, CHROs can execute strategic initiatives quickly and confidently at a much lower “total cost of ownership.”
The global EoR model fundamentally speeds market entry, saving the organization valuable time and money in bringing their ambitions to life vs. navigating the costly, time-consuming, and complex process of establishing business and employment nexus beyond home borders. It also helps facilitate opportunistic moments that matter to the organization, such as mergers, acquisitions, and divestitures.
The solution supports growth-oriented multinational businesses. It is a genuine human potential enabler and a gateway for connecting skilled talent to opportunities they may have otherwise been excluded from simply because of their country of residence. Global EoR solutions break down borders, unlock opportunities for engaging talent-rich yet overlooked and underrepresented populations, and enhance the organization’s diversity while enriching the lives of its workers.
There is massive value and ROI potential from the global EoR model in enabling strategic goals, diversifying skills, fueling talent strategies, and otherwise creating speed, agility, and scalability that enables material and competitive advantage while controlling costs and accessing the full value potential of the organization’s skills and resources to focus on what they do best.