Unlocking Talent Worldwide—SMBs Go Global

Katrina Faessel:
Have you wondered how your business could tap into the global workforce? We invite you to discover the latest trends shaping global employment and gain insights on starting and expanding an international talent strategy with TriNet's Jessica Cote, Divisional Vice President, Product Management, and Oyster HR's Miranda Zolot, Senior Vice President, General Counsel and Secretary.

Jessica Cote:
Hello, everyone. Thank you for taking the time out of your day to join us for TriNet's Small Business Week, Unlocking Talent Worldwide. In this session, we'll explore the topic of going global and how small businesses can tap into a global workforce. My name is Jessica Cote and I'm the divisional vice president, Product Management at TriNet. And in this role, I'm responsible for leading product strategy and management for a diverse portfolio of customer solutions. And one of the areas that I am particularly passionate about is helping our clients finding and nurturing top talent.

One of the areas that we're diving deeper into is helping our clients in that talent journey as they look to expand globally. Expanding globally is certainly not a new concept. We've seen global workforces embraced by large employers for decades with incredible success. But for small and medium-size businesses, it may not have seemed like a viable option. Today I have the pleasure of speaking with Miranda Zolot, Senior Vice President, General Counsel and Secretary at Oyster. Miranda, would you mind taking a moment to introduce yourself and your role at Oyster?

Miranda Zolot:
Of course. Hello, everyone and thank you Jessica for having me today. My name is Miranda Zolot and I'm the General Counsel at Oyster. I'm an employment lawyer by training. At Oyster, I'm responsible for building our corporate structure, guiding the development and design of our employment products and generally ensuring compliance across the globe. My job at its core is to clear barriers and make it easier for people and businesses to succeed.

Jessica:
That sounds awesome. Miranda, I'm so glad to have you here with us today. TriNet is proud to share that we're partnering with Oyster and our mission to support SMB growth by offering amazing partners and new experiences to support their business success.

So when Covid hit, many employers transitioned really to survival mode. Many faced slowed down and, for some, halted growth and where possible, many employers transitioned to work from home models, embracing new technologies and ways of working. And we came to realize along the way that we're no longer limited to opportunities and talent in our backyards. And while Covid may have temporarily impacted their plans, we know the entrepreneurial spirit is resilient, right? Just like the creativity and the fire that drove these entrepreneurs to launch their businesses, many began exploring fresh new channels for growth, including tapping into that booming global workforce.

With more and more SMBs expanding globally, TriNet has launched our simple, reliable and secure global workforce one-view integrated experience, aligning with a select group of amazing international employers of record to support our customers unique needs in this journey. Miranda, to get us started, can you tell our audience what an employer of record is and how it might be different than a PEO and also, you know, an overview of Oyster. What makes Oyster really stand out in this space?

Miranda:
Sure. An EOR or employer of record helps other businesses by formally employing team members on their behalf. We take on the administrative and often legal responsibilities associated with engaging that team member. Unlike a PEO, there is no co employment and the EOR is fully responsible for the employment relationship. Companies will use an EOR for many reasons. The leader often is costs and the efforts that it might take to open new markets.

Traditionally, in order to employ in a country, you would have to set up an entity and all of the operations that support that entity in order to hire compliantly in that country, or you could hire a contractor and risk misclassification insurance. So EORs give you a way to branch out, to expand into a market that you're interested in, or is a good fit for your business without that overhead. Oyster itself, among its competitors, is my favorite, which is awesome because that's why I'm here, but we allow you to engage and pay full-time employees and contractors in over a hundred countries on one spot.

We're excited about being integrated into TriNet. So it gives you a one place to land, to handle all of your global employment. The market for EORs is very competitive. Our customers routinely share that our compliance and deep employment insights are the reason they choose us over our competitors.

But when asked once they're on board, it's our platform, our automation and excellent customer service, that makes them stay. So we don't give companies just the infrastructure to onboard them and hire great talent. We really give them the tools and the insights to do it right, along with the advice and the product capabilities to be strategic and remain compliant and competitive. Like TriNet, you know, if we're successful, you're successful, and that's really what drives us.

Jessica:
So I'm sure you're just a wee bit biased but we love Oyster because of those synergies, right? The service level, the deep employment insights, it really resonated and aligned with TriNet's values, so making Oyster a partner is just a fantastic choice that we think for our customers. So let's pause a moment and take a quick audience poll. So for our poll question, which best describes your company? We'll just give folks a moment. And some of the options here. You know, are you a global company with employees in several countries? Maybe you have a small number of employees outside of the U.S., maybe you're U.S. only, but you're thinking about expanding internationally in the future, right? Think about dipping your toes in the water. Or maybe you're U.S. only and you have no plans to expand internationally. We'll give that just a minute.

All right. So while folks are digging in there, as I mentioned a moment ago, more and more SMBs are really investing in or exploring, expanding that workforce globally, whether it's the result of rising cost pressures, maybe you're looking to find more skilled talent in that competitive labor market or expanding your footprint globally to meet your customer base. And we can see from our poll, you know, that our audience, you know, some have begun to explore this space, which is really exciting. Miranda, what are the key trends that you're seeing today with your clients? And in general, that SMB market, how’s it relate to the geography of their workforce?

Miranda:
Yeah. So what I would say, interestingly enough is, there's not a trend, per say, outside of the growing general acceptance that distributed teams can work. And it may be required as a strategy to retain and attract talent. Notably, 70% of our customers are SMBs. Twenty percent are mid-market.

So while our solution is geared toward these customers who may not have their own foreign entity, I think it's helpful to see that SMBs of all sizes and shapes are actively engaging global talent. We find that their footprint geographically reflects their business goals. So if you are expanding for sales strategy, that might mean that you are hiring in countries where there's a large untapped market for your good or service.

If you're hiring for a talent strategy, that could be reflective of a number of business goals, meeting tighter budgets, time zone coverage, diversity inclusion goals or even ESG metrics. We have one customer that we're working with who's committed to remaining carbon neutral, so they're using remote work to do that. We have another who is seeking B Corp certification and is trying to hire an intern in traditionally underserved communities in order to meet those metrics and to lift up that population. So depending on what your talent strategy is, there's a number of reasons to look in different places.

And finally, I would say that certainly at the beginning of Covid, we had folks who simply went remote or distributed to retain employees. We have seen that retrenched a little bit. And what I would say is now you see it as a tool for retaining key employees. Now what I'm talking about specifically here is you have someone that lives in Idaho that decides they want to go to Argentina to ski. So that is a different scenario than if you have someone that you want to hire full-time from Argentina, right?

So typically we see folks trying to retain key employees, sales enablement, sales enablement key engineers, those sorts of things And we do think that is definitely as a result of the challenge that returning from Covid created and particularly, actually, even within Covid, managing folks wherever they might have landed was really hard for HR and for managers to handle. So I think we will continue to see limited options to let people move places versus hiring directly in those other geos.

Jessica:
So with so many changes in the U.S. and world economy in the last few years, I'm also interested in what you're seeing as it relates to hiring and layoff patterns, right? In the U.S. market, for example, and in 2022, we had that big swell of hiring. And then in 2023, we saw layoffs, especially in certain industries like tech. And then now in 2024, we're seeing a lot of areas stabilize, but there are still some sectors that maybe aren't as strong as we'd like, again, like the tech space. So are you seeing similar patterns in the global market?

Miranda:
We are. We actually continue to see tech companies struggling with layoffs in Q1. Venture capital spending remains an all-time low. Those growing companies, startups and scale ups that rely on capital, continual capital outlays or fundraising are struggling. But apart from those, we do see that there's stabilization in the market. We are still seeing hiring freezes and delayed backfills. As sort of a, just a smart budget process method.

So I think we're getting close to being done with layoffs. I think we will continue to see conservatism in actual hiring. But if we look at sales, generally, as a measure of folks getting out there in the market, those have absolutely ticked up in Q2, and we think are going to continue to grow again, just more conservatively and more focused as I mentioned before, like Covid, everyone went everywhere. I think now teams are being more specific about and thoughtful about where they want to put people and how they're going to manage their distributed workforce. That's what I would say.

Jessica:
Well, I'm sure that financial component with employers anywhere, top of mind, and the various strategies that they might be taking to be able to support that. What about at a regional level? I know Oyster operates in over 100 countries. Are there any specific regional trends that are standing out to you?

Miranda:
Yeah, so we can talk about it a couple different ways who our customers are that are hiring internationally or cross border. We have those that are who they are hiring. So majority of our customers are U.S.-based. Those tend to be in five states, big states: California, New York, Florida, Massachusetts, Texas. We have all over the U.S., folks that are hiring, but we do get a bulk of those in those heavy tech centers or established company areas. Our most popular hiring destinations, regardless of whether you are a U.S. company or an international company, continue to be Spain. It is a perennial favorite among folks who want to remote work or frankly, folks that are just really comfortable with the remote work process and they have those skills and they're open to work. So, Spain definitely is always top number one. UK and Canada close second and third. India and Philippines has been growing very much.

And I think that has a lot to do with call centers and IT tech skills in the Philippines. So those are top hiring destinations. Some sleepers that are coming around over the past year, Poland, the Netherlands, yeah, South Africa and the U.S. So, South Africa particularly and the U.S. are increasing about double where they were last year. So that's really interesting for you U.S. employers. I think it means that we have folks outside of the U.S. taking the talent here in the U.S. that was already kind of challenging to recruit anyway. But it also means that there's a lot of folks that have, you know, native English skills or really excellent English skills. In these GEOs and with U.S.-based companies, Latin America has really good time zone-based talent. Yeah, so there's lots of options, but we do see the same, I would say, 10 countries over and over again.

Jessica:
But definitely some new ones in that list then that I've heard in prior years. So it's really exciting. So we've been largely discussing U.S.-based companies expanding internationally, but what about the reverse? What about SMBs that are international that are now entering the U.S. for the first time? What are you seeing in that area?

Miranda:
So for companies in, let's say, the EU, their first additional hires are generally within the EU and they can do that fairly easily through a process called nonresident payrolls. If they start to look outside of the EU and for all rest of the world that is not the U.S. and the EU, they go first generally to Canada and the U.S. Both of those have talent, they have availability, they typically are the first stuff for companies that are looking to expand also. So it makes sense that the first hires in these geos for these other countries are sales and marketing, maybe business unit leadership because they are trying to, rather than find that great software engineer in Palo Alto, that's not what they're trying to do. They're trying to really understand the market demographics in the Southeast for their particular product. And so that's who they have on the ground as their first hires.

Jessica:
It's a little bit different, but it makes a lot of sense, it makes a lot of sense. So we saw in our poll earlier that about 18% of our audience, they're not global yet, but they're thinking about it. Miranda, as you think about your clients, what are the key reasons and benefits that kind of ultimately motivated them to take the leap? You know, for example, some people think about establishing a call center, right? And they might be looking for a lower cost labor market, but we know that labor is just one factor. What are your thoughts?

Miranda:
So I still believe the number one per reason and the motivating factor, even among all of the other reasons to go global is to access wider pools of talent. Wider talent pools mean you automatically get lower cost of labor. Well, doesn't often mean you get lower cost of labor because you're looking more broadly. But what it always means is that you have more quality options. You have greater reach for your business. You have a diversity of thought and experience. And generally, you get an excitement to work for your company that may not unfortunately exist with the worker down the street. Done well, it simply makes your business a more, it's a better business. The culture is better. The ideas are better. The innovation is more. Just the ways of thinking improve because you have this broader base of talent to provide ideas and solutions to your business problems.

Jessica:
Completely makes sense. So, conversely, what factors might deter small and medium-size businesses from going global? Do you have any ideas or recommendations maybe for a beginner or like baby steps, right, for SMBs to begin expanding globally?

Miranda:
Yes. I mean, the rise of remote working and companies like Oyster to help hire remote workers makes it seem very easy. And technically it is. But you might be surprised as a U.S.-based employer at the entitlements and protections that other jurisdictions provide. You think you know until you have to try to performance review someone in France, right? And people say France, I shouldn't pick on France. Belgium is worse. But there are little things like paying meal stipends or providing allowances for electricity. And exiting an employee is always going to be more difficult outside of the U.S. because at-will employment that we're so comfortable with here doesn't really exist outside many places outside of the U.S.

So it can be scary for someone who is looking to, you know, launch that first hire into the unknown. However, it doesn't mean you shouldn't do it. You do need to kind of do your research on the country before launching a search there. And frankly, for first timers, unless you have a specific business need for languages or markets, you might consider starting with a country that has laws that are similar to the U.S., so you feel more comfortable from an advice standpoint and from a cultural standpoint.

Canada, Australia, the UK, these are all places that have an angle basis in law and culture and will feel more familiar. Other places, if you're looking for something geographically close because you want to be able to perhaps go there and train them or have them come to you because you're trying to feel out what this relationship might look like, would include in places in addition to Canada and Latin America or the Caribbean. We talk about Latin America a lot. We don't talk about the Caribbean a lot but there's lots of countries and lots of people that are very excited to work for your business and who have great skills and are very familiar with America and our customs and the way we work, so that's a place to think as well.

And before we move on it, we talk a lot about employees, but it's worth saying that most companies will make their first hire outside of the U.S. as a contractor. It is perfectly valid to hire a contractor in another country, and it's a lot easier for any run of the mill employer to do that. There's typically a lot less risk with contractors. You can end those contracts more easily. If scoped well, you have a very clean idea of what duties are to be performed and how and when. However, as I am talking about the scope of the agreement, you need to be aware of and get comfortable with any potential misclassification risk.

Jessica:
Okay.

Miranda:
Just because it's a contractor in another country doesn't mean you don't have that same misclassification risk. But it is absolutely the way almost every company starts when they're going internationally, is to hire a contractor. I will warn you, once you go global, you will stay global. Our customers typically double the size of foreign employees within a year. You will find really quickly that there's a lot of talent out there and they're great. And you will be able to acquire more folks for your organization in a way that's sustainable.

Jessica:
And that growth rate and stickiness, it's impressive, right? It's showing that it's working. Which countries and roles are you finding most popular? When U.S.-based SMBs are expanding globally, any up-and-coming markets that you're seeing?

Miranda:
We mentioned Poland earlier. Poland is a standout in that they are very distributed employee friendly, from a legal perspective. The folks there are incredibly educated and talented and they have a work ethic that reflects the U.S. work ethic culture. It is a really great fit and there's a lot of engineers there. I have two lawyers for my team that are in Poland. It's just a great place to hire.

South Africa, as I mentioned again, it's kind of an up-and-coming space. South Africa is obviously, they have native English speakers there. It's a time zone that you can use to support Europe. So folks are looking at it as a support and administrative place for European efforts.

So that's where we see people kind of hiring as new up-and-coming places. Who do they hire? Software engineers. Absolutely. We have four times more software engineers on our platform than any other group.

Behind that, we have customer service representatives, data analysts and account type managers are kind of large groups of folks that are popping up around the globe. If you go with kind of a step further and combine roles into cohorts, it's clear to us that the following groups are good targets for distributed work. Product and engineering teams, you can either do it individually or spin up pods.

Sales and marketing. They tend to be separated out by their jurisdictions. Customer support. Those can be found in pods, but where you need specific language support they tend to be country specific. And then administrative support and we kind of see that all over the board, everything from financial back office. Sometimes legal folks have people that are in other countries to help support contract management and things like that. So any sort of operational administrative support that you envision your company using, a lot of that can be hired outside of your brick and mortar headquarters.

Jessica:
So I know we only have a couple minutes left. I just want to just touch base really quickly on, you know, we did have some in our poll response that have already started expanding globally, and I'd love your thoughts on what would be the next steps for this audience. They've already taken the plunge. Maybe what patterns or best practices are you seeing for clients that are already going global but might want to expand further, maybe to a new country or additional roles?

Miranda:
Sure. So if they're already expanding, then the business will normally dictate where they go next. If they're launching, they've been successful in Bulgaria, and they want to move to Norway, so that would just be moving into a new geo. If they get a big customer that they're trying to service, we've seen people spin up like small customer support groups near that particular customer where the customer is headquartered so that you have this really great tight synergistic sort of relationship with that customer.

And we also see people continuing to hire, follow the sun coverage. Maybe they started in their highest GEO, but they're finding that they're getting more APAC questions. So they want to hire some folks in Asia to make sure to answer those questions around the clock. So we are seeing that.

There are a couple of sets of considerations I would say from a legal perspective and then from a hiring perspective. From a legal perspective, if you are global and you continue to grow your teams, if you started with contractors, you need to consider if it's time to convert them to FTEs. As I said, we're all familiar with misclassification risk.

The EU recently issued their directive on temporary workers and countries around the world are continuing to crack down on the 2 billion informally employed workers. So, we and other EORs help folks move those contractors and convert them to FTEs once you find that geo works for you and you want to continue to grow it.

And then if you have enough workers, you might consider establishing an entity. It's one of those things once you're successful, you keep growing. You will eventually have enough permanent establishment risk where you will need to establish an actual entity or branch in that foreign country and pay corporate tax. So, if you are at that place, if you have 20 to 25 team members in one particular country, you might consider, you know, working with counsel to determine if it's time to open an entity there.

Hiring strategies. These are the things that we're seeing is people are building in clusters and you might want to do this. If you know that it's working for you, in let's say Italy, you might want to hire more people in Italy. There's a couple of reasons for that. You build a sense of team there and that supports folks there who are remote. Even if they're not in the same town, they can have meetups. That's really fun for folks that are working in a distributed environment.

But secondly, as the folks in your own home office trying to manage and understand what these folks are doing, the less pods around the world you have to look at and manage and think about, that will make your job easier. So, like I said, post-Covid, we're seeing a little bit of, like, pull back into clusters rather than having one person in every country in the world. And also from hiring, you may recruit in a region where there's a particularly fertile talent pool for what you're looking for, like call centers in the Philippines. So that's what I would say.

Jessica:
All right. I love that idea of putting down roots. And I think that is just such a great strategy.

Miranda, thank you so much for answering all of my questions. I know we're out of time. We're getting a little flag, letting us know that we're out of time, but there's so much interesting information here. I want to thank our audience for joining us today. Please be sure to explore the resources section for additional information on TriNet and Oyster as well as contact information on how to connect with our teams. Miranda, thank you again so much for taking the time today to share your knowledge in this space. It's certainly complicated, but it's so valuable for our customers. Thank you again.

Miranda:
Thank you so much. It's been great talking.