According to data from Accelerance, 60% of American companies are outsourcing their application development needs. Locations like Costa Rica are positioning themselves, with respect to North America, as ideal recipients of international investment in this context. In addition, the McKinsey and Business Of Fashion report, The State of Fashion 2022, states that 70% of companies in the fashion sector are considering increasing their nearshoring percentage.
This trend also has important consequences for talent professionals. The benefit of access to a much larger talent pool includes the emergence of new competitive opportunities linked to business models. Which brings us to the next point.
Outsourcing: gaining a strategic business ally
Outsourcing is no longer perceived as a solution that simply lightens the workload of the teams, but is now proving what it really is: an opportunity to generate added and strategic value. The study we published, Capitalising on a Changed Private Equity Landscape, shows that over 90% of fund managers internationally already outsource or plan to outsource accounting functions or cash control – essential tasks for their activities. While this does give time back to internal teams, it also reduces risk and provides easy access to strategic data for stakeholders, among other benefits.
Having a strategic partner at an international level also provides a global vision combined with expert local knowledge. An outsourcing partner can also represent other advantages, such as reputational benefits, access to technology that would involve a significant financial investment, support in the management of corporate risks, and help with upskilling both your HR teams and others with new technologies.
The importance of the payroll process in international talent management
Having international teams means managing multiple payroll processes and knowing the labour regimes of all the jurisdictions in which you operate, which is not easy. International payroll management is possibly the most complex of all the functions of HR professionals because of the time it consumes and the amount of knowledge needed.
And leading this essential international process also brings other challenges. The payroll professional must take into account linguistic, cultural and communication differences (having to coordinate teams in various locations and countries), cybersecurity and regulatory compliance (essential given the sensitivity of the information involved), and will have to coordinate global and local resources, manage money flows, consolidate information…
There are two key elements that provide the answers to these challenges: the management model that you want to implement to successfully complete the international payroll process, and the technology necessary for it.
International employee experience
Perhaps one of the biggest challenges of the talent manager is, that while the pandemic has taught us that staff can work remotely, combining different procedures in hybrid format with delocalised teams, the greatest difficulty is to generate an employee experience that meets the needs of the teams as a whole and the employee as an individual.
According to Slack’s Remote Employee Experience Index, the great challenge for the remote management of international teams is the feeling of belonging. While the rest of the variables analysed (work-life balance, anxiety management, productivity, satisfaction with working conditions) all grew, the feeling of belonging decreased by 5 points for remote workers.
In order to overcome this challenge, the international talent manager must focus on offering a better employee experience, adapted to the reality of the new times, by: implementing authentically hybrid models, putting technology at the service of people (not the other way around), replicating the employee experience based on the consumer experience, generating memorable and meaningful interactions, betting on real flexibility and having tools for conciliation to help with the feeling of disconnection and the overall well-being of employees.
These are just a few of the trends we’ve seen in international talent management. Thanks to our extensive experience working with some of the biggest multinational firms, we see these trends as those with the biggest impact on the day-to-day of international talent professionals. These are not the only issues, there are more – but we have no doubt that outsourcing to Auxadi can help.