Survey Shows Most Firms Need Help With Int’l Hiring and Payroll Challenges

International hiring skyrocketed in 2021 among businesses in the United States and the United Kingdom after the pandemic replaced the office-work paradigm with a remote-first alternative. Firms most commonly hire international workers because they want to expand into other markets, increase their market share in other countries or both. The second-most common reason firms hire internationally is to find new talent, a tendency more common among firms that do not have many international employees.

But international hiring is not without drawbacks, and paying and managing international workers, in particular, represents a diverse array of challenges. Firms especially struggle with handling taxes, financial data security, fluctuating exchange rates and legal and regulatory issues when paying international workers. As a result, nearly two out of three firms use private agencies to help recruit and manage their international hires, according to PYMNTS’ research. Due to these challenges, most firms are interested in innovating their international payment capabilities. For larger organizations that want to scale their international workforce, innovation in cross-border payments is especially important.

These are a few of the findings PYMNTS uncovered in The Cross-Border Payroll And Contractor Payments Report, a collaboration with Nium, which provides a firsthand account of how firms are increasing international hiring to expand their global reach and employ new talent. Based upon a survey of 250 executives with leadership responsibilities in accounts payable, payroll or payments at companies based in the U.S. and the U.K with more than $100 million in annual revenue, this report examines how firms are increasing their international hiring, details the challenges they face and explores how hiring global talent helps grow their business.

More key findings from the study include:

• The share of firms that expanded their hiring of international workers from 2020 to 2021 grew nearly six times, from 8% to 46%. Firms with more annual revenue tend to have greater shares of international workers.  From 2020 to 2021, 60% of firms surveyed hired more international workers, and 14% decreased their hiring of these individuals, meaning a net 46% of firms increased their hiring of international workers. For comparison, from 2019 to 2020, 42% of firms increased their international hiring, but 34% decreased such hiring, making for a net 8% increase. Four out of five firms that generate more than $1 billion in annual revenue increased their share of international workers.

• Global expansion is driving demand for an international workforce. Access to a wider talent pool is also a key reason firms hire internationally. Two-thirds of firms listed expanding into new markets as the reason to hire international workers, and 33% of firms said that expanding globally is their most important reason for hiring internationally. Other popular reasons include easily accessing better talent, which 58% of firms listed as a reason to hire internationally, and gaining a competitive advantage, cited by 53%.

• Four out of five firms report experiencing challenges when paying their international workers, driving more firms to use private agencies to help with worker hiring and management. Only 20% of firms report having no challenges when paying international workers. Managing taxes is the issue firms most commonly experienced, as 47% of firms report facing that challenge. Meanwhile, 19% of firms cited regulatory compliance as their most critical challenge affecting their ability to make payments to international workers. These challenges appear to drive firms to rely on outside help via a private agency, as 67% of firms who struggle use a private agency, compared to the 53% of firms who use a private agency but do not report experiencing any payment challenges.

To learn more about how U.S. and U.K. firms are hiring international to expand globally and find new talent, download the report.