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The pandemic fundamentally reshaped how businesses operate, with remote work becoming the norm. As companies adapt to this new working landscape, many embrace a decentralised, remote contingent workforce to leverage non-location-specific talent from around the globe.
The contingent workforce industry, a powerhouse generating an impressive $171.5 trillion in 2021, is poised to soar to extraordinary heights, reaching a projected $465.2 trillion by 2031. Recent studies also predict that 70% of the workforce will be remote by 2025, making the management of remote contingent workers a crucial element for most companies.
Organisations that embrace the ability to onboard a remote contingent workforce benefit from enhanced flexibility, scalability, and reduced risk – all while ensuring their permanent workforce remains unaffected. This progressive approach aligns perfectly with the growing demand among workers for remote contingent opportunities.
Hiring contractors remotely and sourcing offshore resources comes with compliance challenges, from legal and tax implications to local labour laws and candidate cultural nuances. So, what solutions exist for firms to navigate this new reality?
In this article, we investigate how employers can best manage the complexities of cross-border recruiting and ensure compliance while maximising the advantages of a decentralised, remote contingent workforce. We also delve into real-world examples of how Pontoon, in collaboration with the Adecco Group, is uniquely positioned to identify client challenges and mitigate risk, adding value for our Managed Service Provider (MSP) clients.
Employers venturing into remote or offshore contingent workforces must first understand the legal implications involved. Employment, taxation, and contractor classification laws vary across jurisdictions, making it imperative to stay informed and compliant. Failure to do so can result in legal and financial consequences that may significantly impact business operations.
As part of the Adecco Group, Pontoon has access to subject matter specialists, like Adecco Group Public Affairs. These resources support Pontoon with worldwide monitoring and updates on contingent employment practices, laws, and regulations to suitably represent our client’s interests in front of policymakers, employment federations, and other organisations and networks.
Through our collaboration and affiliation with the Adecco Group, Pontoon has the unique capability to tap into applicable local legal guidance (which is very hard to ascertain solely from a global perspective) to help solve complicated operational challenges for clients. In other words, we can gain access to dedicated legal professionals worldwide who understand Pontoon’s business (and its clients’ needs) and can recommend sound courses of action to ensure compliance.
One of the most significant challenges in hiring global remote talent is compliance with local labour laws. With legislation varying from country to country, it can be tough to understand and remain current with regulations.
To successfully hire and manage a decentralised, remote contingent workforce, employers should consider the following best practices:
As a leading provider of workforce solutions, Pontoon collaborates closely with our parent company, the Adecco Group, to identify legal and compliance challenges and mitigate risk for the benefit of our clients. By accessing the collective expertise and global reach of the Adecco Group, we are distinctively positioned to assist our clients in managing contingent legal and tax implications associated with remote or offshore workforces.
Alongside Adecco, our combined suite of services includes tailored solutions for contractor classification, tax management, payroll administration, and policy development. By partnering with Pontoon, you can confidently traverse the difficulties of managing remote contingent workers. We enable our clients to focus on their core business operations while we take care of optimising their talent acquisition strategies.
We partnered with a prominent US company that recently expanded its established UK & US MSP programme to encompass 12 EMEA countries. Previously, most, if not all, hiring took place locally with country-specific agreements and processes. However, Pontoon identified a group of 30-40 long-standing contingent workers who operated as independent contractors across multiple countries, posing a potential risk of misclassification. We embarked on independent audits covering all these workers to address this concern. This involved scrutinising contractual language and evaluating actual working practices.
We collaborated with Adecco’s “international assignment” team in the UK, specialists in cross-border tax issues. Additionally, we accessed local legal advisors in regional Adecco offices across EMEA to grasp local nuances and legislation. We mitigated the risk by updating policies, modernising contractual language, and implementing changes in how managers and contract workers interacted. We also streamlined off-boarding procedures and facilitated permanent conversions where applicable. Through this comprehensive approach, we ensured compliance and fostered a more secure working environment for our client.
At Pontoon, we’re witnessing a growing trend among contingent applicants expressing interest in working internationally, extending beyond their usual base of operations. We’ve received requests from supplier partners working with individuals looking to work in countries such as Pakistan, India, South Africa, Iran, China, France, Switzerland, and Argentina for short durations. We implemented a streamlined procedure within our MSP programmes to address these inquiries.
Upon candidate submission, each request undergoes careful review by our adept legal colleagues from the Adecco Group, who possess extensive knowledge of international tax and working operations. Factors like immigration status, local and international tax implications, international sanctions, work visa requirements and the requested duration are considered during the evaluation process.
We collaborate closely with our Adecco regional partners to conduct thorough assessments, ensuring compliance, before seeking final approval from the client. This meticulous approach guarantees that each international work arrangement is handled with precision and expertise.
We recently encountered a unique situation where our client required onboarding a worker and payroll partner in a country where they lacked a natural presence or legal entity. The worker possessed a specific skill set that was highly sought after by our client, having recently relocated to this country as part of an international family move.
The candidate recommended a local payroll service provider, but upon conducting our standard supplier onboarding checks, they didn’t meet our compliance requirements. This prompted us to seek an alternative payroll company. To resolve this, we contacted the Adecco “international assignments” team, who recommended a reliable and compliant payroll provider with a strong track record in adhering to regulations alongside our local Adecco Group colleagues. This decision resulted in significant cost savings for our client and ensured a legally compliant “taxed at source” set up within the country.
Managing a decentralised, remote contingent workforce requires careful attention to legal and tax implications. By consulting with legal experts, establishing clear contracts, understanding tax obligations, correctly classifying workers, implementing robust payroll systems, and regularly reviewing policies, employers can mitigate risks and ensure compliance.
Furthermore, by connecting with Pontoon, organisations can benefit from a comprehensive and tailored approach to managing legal and tax intricacies associated with remote or offshore contingent workforces. Embracing a strategic collaboration with an experienced recruiting partner allows businesses to release the full potential of a decentralised workforce while safeguarding against potential risks in an increasingly interconnected global economy.
Are you looking to avoid costly international and remote onboarding hurdles? Let us optimise your contingent talent acquisition strategies while you focus on other vital business operations. Take the first step toward workforce efficiency – connect with us today.
Note: The content provided in this blog post is for informational purposes only and does not constitute legal or tax advice. Employers should consult with legal and tax professionals to address their specific circumstances.