In September 2021, 4.4 million people in the United States quit their jobs. That record-shattering number was simply one in a line of staggering numbers that soon became known, collectively, as the “Great Resignation.” Initially thought to be a temporary blip brought on by the unique conditions of the pandemic, many experts now believe this could be a lasting trend driven by a reconsideration of how work fits into people’s everyday lives.
Factors such as the rise of remote work and the increase of burnout in the demanding areas of tech and healthcare have made people realize that the status quo is not their only option. In truth, the Great Resignation is simply accelerating a transformation that had already been in motion.
Before the pandemic, it was estimated that by 2027, 6 in 10 U.S. workers would be operating as independent contractors. This estimate coincided with the steady growth of the contingent workforce, which had increased by 15% between 2010 and 2020. The idea of a more flexible career path was already in people’s heads — it just took the events of the past two years for many to consider it more seriously.
When the Great Resignation first began, many businesses assumed that the best solution was to wait it out. Once things returned to normal, the thought process assumed that people would return to work. But this has yet to happen at the numbers needed to get back to prepandemic employment levels.
To improve employee recruitment and retention, businesses are going to have to find modern solutions to tackle the current worker shortage. A global contingent workforce could very well be one of these solutions.
What Is the Advantage of Hiring Contingent Workers Globally During the Great Resignation?
A global contingent workforce can help businesses overcome the worker shortage because it significantly expands the talent pool. After all, when you widen your net, the available talent options increase tremendously.
By embracing the globalization of the workforce, companies are able to prioritize skill sets and experience rather than geography. On top of this, engaging workers on a contract or project basis offers a greater level of agility and flexibility that makes it possible for companies to move quickly and adapt when necessary.
A global expansion strategy like this can also benefit current employees. Studies have shown that the more engaged workers are, the more likely they are to remain with a company. A global contingent workforce can facilitate higher engagement in two ways. First, contingent workers can shoulder some of the burdens of existing employees, thus freeing them up to focus on more engaging tasks. Second, by creating an environment where employment is not tied to geography, employees are able to work from wherever they feel is best for them.
If you’ve never implemented a global expansion strategy, it’s important not to dive in headfirst. Although a global contingent workforce might be an effective way to reduce worker turnover and fill open roles, it’s important to know what goes into global contingent workforce management:
1. Practical considerations.
Although technology has made remote work easier than ever, there are still practical challenges to consider before bringing on a global contingent workforce. For example, remote work means remote training, which might require a different method than the one you’re currently using.
When working on an international level, you also need to take into account potential language barriers, different time zones, and varying cultural expectations of work. If these aspects are ignored during the creation of your global expansion strategy, they can become major obstacles to effective collaboration.
2. Compliance laws.
In addition to understanding the employment laws of the countries you hire in, you’ll also need to stay on top of the laws around contingent workers — which might also be in flux. You’ll need to keep track of local regulations around things such as maximum work hours, notice requirements for termination of contracts, and paid leave requirements.
The more countries you’re operating in, the more overwhelming this can be. The good news is that you can work with a global employer of record whose sole job is to keep abreast of local laws and ensure contractors are in compliance so you can focus on engaging the talent you need.
3. Types of contingent workers.
Not every contingent worker is contracted the same way. It’s important to know the difference between fixed-term and indefinite contracts, as well as the country-specific requirements for each. In some countries, for example, fixed-contract workers might still be required to have health benefits and mandated leave.
You also need to be aware that what qualifies as an independent contractor in the U.S. might not qualify as one in other parts of the world. Be aware of different countries’ laws on what classifies an independent contractor versus an employee so you don’t run into expensive misclassification issues. Again, a global employer of record can help with this.
For the many employers struggling to find workers, a global contingent workforce is a beneficial solution. As long as you are aware of the unique needs and nuances of a global workforce, now is the perfect time to develop a global expansion strategy that can reduce turnover and improve recruitment in the present — therefore strengthening your labor force for the long haul.
Innovative Employee Solutions is a leading global employer of record that specializes in payrolling and contractor management services for today’s contingent workforce. Hire quickly and compliantly in more than 150 countries to fill skills gaps — all without having to set up business entities in each location. Learn more about how our global workforce solutions can help you stay compliant here.
Written By: Sara Jensen,Vice President of Business Development at IES
Sara Jensen is the vice president of business development at Innovative Employee Solutions (IES), a leading global employer of record in more than 150 countries that specializes in payrolling and contractor management services for today’s contingent workforce. Founded in 1974 in San Diego, IES has grown into one of the city’s largest women-owned businesses and has been named one of its “Best Places to Work” for 10 years in a row.
