Millennials now make up the over 30% of the workforce. As this generation takes on more leadership roles, they are reshaping the way we do business and creating trends that affect how companies across the globe expand into new markets. Among these trends is a change in how companies are handling international assignments in order to respond to Millennials’ desire to travel. Paying attention to the latest trends in international assignments can help companies stay competitive as they approach new foreign markets.
Trends in International Assignments: Remote Working Lifestyle
Technology has the ability to break down communication barriers and enables us to collaborate from anywhere across the globe, opening opportunities for more people to work remotely. This practice gives companies access to a global workforce and provides employees with the flexibility they seek from their employers.
When engaging with remote employees in international locations, the first step toward a successful relationship is determining the employment arrangement, and whether a company plans to hire someone as an employee or an independent contractor. It is important for companies to keep in mind the compliance risks associated with utilizing independent foreign contractors before determining if this is the right choice.
Once companies determine the employment arrangement with remote employees, they need to ensure compliance with foreign tax requirements. For example, if a company is employing a U.S. citizen in an international market, they need to make sure to pay attention to the 183-day rule. This guideline states that if a person is in a country outside of the U.S. for more than 183 days in a year, they have to pay local taxes to that country. Each country has its own tax requirements for remote employees, and companies need to have a thorough understanding of which requirements apply to their business.
With more companies offering remote work opportunities, maintaining compliance with international employees becomes top of mind. Companies need to develop a plan for managing remote employees that take challenges, risks, and long-term goals into consideration in order to maintain compliance. This can be done by utilizing an employment solution, like an International PEO (Professional Employer Organization), to act as an extension of a company’s internal HR department and manage compliance with international employees.
Trends in International Assignments: Short-Term Projects
According to a recent article by the Forbes, a majority of millennials desire jobs that allow them to travel or work abroad. As more employees are looking for overseas opportunities, companies can capitalize on this movement with short-term international assignments.
Short-term assignments are projects that last for less than one year. These can provide a lean approach to testing foreign markets since they allow companies to enter a market without the need to set up a permanent establishment. These can be a cost-effective way for companies to get a glimpse at the potential in a foreign country.
Similar to remote working employees, companies need to determine how they will employ persons for short-term international assignments. This can be done by either using independent foreign contractors or deploying full-time team members into international markets. As mentioned above, International PEO is an agile expansion method that helps companies employ persons overseas efficiently and compliantly. In addition, International PEO helps companies maintain flexibility, so they can easily exit a market once an international assignment has been completed.
Trends in International Assignments: Popular Destinations
Companies that want to attract top talent can set themselves apart by offering positions in ideal locations. As more of us become digital nomads, the opportunity to work in unique locations is growing. From beachside escapes to cultural epicenters, nothing sounds more enticing to employees than working in their favorite destinations.
- Central and South America: Cities like Puerto Viejo, Costa Rica and Florianopolis, Brazil are attracting younger workers with their abundance of beaches, and ability to work without barriers. These tropical destinations are popular with people who want to work in exotic locations with a lower cost of living than more popular cities in the region. With the economy in Central and South America expected to grow in 2017, it is the ideal time for businesses to look into the region for opportunities.
- Asia Financial Hubs: Cities like Singapore and Hong Kong are ripe with opportunity for companies and their employees. These markets are consistently listed among the top countries to do business and are growing in popularity for a number of industries, especially financial services and tourism.
- Netherlands: Following Brexit, many companies are looking for alternatives to the UK for their international assignments. Among the most popular is the Netherlands, which boasts the sixth-largest economy in the EU and a strong history of global trade. Additionally, this country houses a highly-skilled workforce as well as an attractive tax system for companies considering the country for expansion.
Companies that embrace international assignments can capitalize on the trends that fuel them. From allowing employees to work remotely, to turning vacation spots into business destinations, international assignments are giving companies an edge in the global marketplace in order to attract top talent.
Don’t just follow global business trends, set them. Partner with the leader in international expansion and take advantage of the trends in international assignments. Reach out to the experts at Velocity Global to see how our International PEO solution can help you.