More Firms Tap Private Agencies for Help Hiring, Paying International Workers

International hiring boomed among businesses in the United States and the United Kingdom in 2021 as firms aimed to expand into new markets and access the world’s best talent. Hiring and managing an international workforce is complex, however, and companies looking to grow their global workforce face myriad challenges. PYMNTS’ research finds that four out of five firms surveyed report experiencing challenges when paying their international workers. The most common issue is managing taxes, which 47% of firms report facing. Regulatory compliance can also cause major problems: 19% of firms cited it as the most critical challenge affecting their ability to make payments to international workers.

One key solution to the challenges in recruiting, managing and paying international hires is outside help from an external private agency contracted to perform recruitment or human resources tasks. Two-thirds of all firms surveyed said they utilize one to hire international workers. PYMNTS’ data also finds that firms with payment-related challenges tend to use private agencies more than firms that do not have payment struggles. While 67% of firms who report experiencing any payment challenges used a private agency, 53% of firms who used a private agency do not report experiencing payment challenges.

“Meeting The Demand For Cross-Border Hiring: The Role Of Private Agencies,” a PYMNTS and Nium collaboration, examines the role of private agencies in meeting the needs of hiring and managing an international workforce and the correlation between private agencies and interest in cross-border payments innovation. The report is based on a survey of 250 executives with leadership responsibilities in accounts payable, payroll or payments at U.S.- and U.K.-based companies with more than $100 million in annual revenue. The survey took place between March 10 and March 29.

More key findings from the study include:

• Private agencies are widely used and serve crucial ongoing support roles to many companies hiring internationally. Nearly two-thirds of firms use private agencies to recruit international workers. In 2021, 70% of companies with revenue between $250 million and $500 million used private agencies to recruit workers located outside their home country. Newer companies also leverage these agencies: 71% of companies that have operated for less than 10 years have used one. Just 37% of the companies that significantly increased their international workforce during 2021 used the services of a private agency, however.

• Six in 10 firms say they use private agencies because the agencies leverage a wider talent pool than the firms can and do a better job finding the right people. Close to half of firms also cited help with managing HR processes as a reason they use private agencies. Firms use private agencies for more than one reason. Improved access to skilled labor was an important motivator for 60% of firms that use private agencies and the most important reason for 26% of firms that use a private agency. We also found that 48% of all firms used private agencies for HR processes, such as onboarding, compliant payroll setup and offboarding, with 18% citing HR processes as the most important reason for using these agencies.

• A correlation exists between how firms use private agencies and the share of wages they pay to global workers. Companies that spend less than 25% of their payroll budget on international workers were the most likely to list improved access to workers as the most important reason to hire a private agency, at 37%. Twenty-one percent of companies with 25% to 50% of total payroll going to international workers said support in HR processes is the most important reason they use private agencies, as did 15% of companies where international payroll represented most wage expenditures. Just 13% of companies that spend less than 25% of their payroll on international workers cited support in HR processes as a reason to use a private agency.

Interest in using private agencies and innovating payment methods indicates that firms face challenges paying their international workforce and are looking for various solutions to these challenges, with many seeking a technology solution to streamline cross-border payments.

To learn more about how U.S. and U.K. firms are using private agencies to hire, manage and pay cross-border workers, download the report.