Data brief: Managing Taxes Is Biggest Headache of Nearly 50% of Firms Hiring Internationally

In 2021, United Kingdom businesses turned to hiring internationally to expand into new markets and tap into the worldwide talent pool. But firms soon realized that hiring and managing an international workforce was a complex undertaking that involved juggling a myriad of challenges.

According to PYMNTS research on the role of private agencies in meeting the demand for cross-border hiring, which was based on surveys of 250 executive leaders across accounts payable (AP), payroll or payments at U.S.- and U.K.-based companies generating more than $100 million in annual revenue, a number of these challenges were brought to light.

Get the study: Meeting the Demand for Cross-Border Hiring: The Role of Private Agencies

These include the need for seamless management of local regulations as well as expert human resources staff to handle global workers.

Fluctuating exchange rates also add another layer of complexity to making payments, with four out of five firms surveyed reported experiencing challenges when paying their international workers.

Most of this can be attributed to regulatory compliance, an issue 19% of firms cited as the most critical challenge impacting their ability to make payments to their global workers.

But the most common headache the report revealed is managing taxes, a hurdle which nearly 50% of firms (47% to be precise) across the two countries reported having to deal with.

Faced with these challenges, there is no doubt companies need significant help to pull off cross-border hiring, and many have found external contracted firms such as private agencies to be a saving grace in handling the recruitment and management of their international workers.

Data from the PYMNTS report, published in collaboration with global money movement platform Nium, shows that 64% of all U.S. and British firms surveyed said they had turned to private agencies to recruit international workers in 2021, with 38% saying these agencies were their most important channel.

Read more: Data Brief: 64% of All Firms Use Private Agencies to Hire From Worldwide Talent Pool

As the report further noted: “While 67% of firms that report experiencing any payment challenges used a private agency, 53% of firms that used a private agency do not report experiencing payment challenges.”

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