Unlocking Accelerated Growth in the U.S. and Globally
At TriNet’s 2023 Small Business Administration's National Small Business Week Summit, Vice President of Product Management, Jessica Cote, sat down with Jerry Kelly, Vice President of Partners and Alliances at G-P. The two discuss remote work, hiring internationally and the latest trends in opening up borders to a larger talent pool.
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Good afternoon. Thank you for joining us for the very first session of TriNet's Small Business Week. Today we're gonna dig into the topic of unlocking accelerated growth. From a global pandemic to war in Europe, we live in an uncertain world, and this has been especially hard on small and medium-size businesses.
Some have temporarily slowed down, while others have really thrived and grown their business to explore new models and take creative approaches. Before we get started, I think we should probably introduce ourselves. So my name is Jessica Cote. I'm the vice president of Product Management for what we refer to as our HR ecosystem.
And one of the areas that I love that my role allows me to explore is how we can help small and medium-size businesses attract, nurture and grow incredible talent. We know people matter and their satisfaction in the workplace matters. So we know that helping SMBs in finding and retaining the right talent is critical to their success.
And I'm joined today by Jerry Kelly, who's the vice president of Partners and Alliances at Globalization Partners. Jerry, would you mind taking a moment to introduce yourself?
Yeah, Jessica. It's great to see you again and great to be here celebrating Small Business Week with our partner,TriNet.
I'm VP of Partners and Alliances here at GP, formerly known as Globalization Partners. And what we are is we are a SaaS based global employment platform and we help companies hire people around the globe in a very timely, efficient, and maybe most importantly, a compliant manner. We have been partners with TriNet for many years and I think the partnership works for several reasons.
One, we have a very complimentary solution. Jessica, as you know, what TriNet brings in value and product to the domestic client base from an HR expertise and an HCM expertise, we bring to those same clients on an international basis outside of the U.S. So it's a very simpatico, complimentary relationship that I'm thrilled to be a part of.
We also serve the same size customer base. About 80% of our clients are in the SMB space. So we understand their needs and we understand the importance of this partnership. So I appreciate you having us and excited to have the conversation.
Absolutely. I'm so glad you're here and I'm really excited about this topic.
So I'd love to hear what steps you've seen companies take to really thrive and unlock that growth potential. We've got remote and hybrid work and it's really opened the doors to new talent pools, pools that were previously unavailable to a lot of SMBs, including leveraging a global workforce and a lot of employers are really embracing this shift.
So could you talk a little bit about what you're seeing with remote and hybrid work and do you think it's here to stay?
Yeah, sure. So if you think back three years ago, very small percentage of people and businesses knew what remote workforce was, whereas today, companies like Spotify, Hopper, Upwork and GP operate 100% in a remote environment. Some of the benefits that we've all been documented and realized from the employee standpoint are certainly a better work-life balance, elimination of maybe a timely commute, but also an increased productivity level, which flows back to the employer.
So the employer side, in addition to the productivity, what this does is it opens up the borders, opens up the talent pool beyond just the local market so they can fill those roles faster by fishing in a bigger pool. This is a key time for businesses, small businesses as well, to really develop a recruitment strategy to go after this endless talent.
And as a leader who's worked remotely for the majority of my career, it can work. It can work really, really well, but only if you have the right talent on your team. And we're hearing a lot about talent shortages. Korn Ferry estimates that by 2030 there's gonna be a talent shortage of more than 85 million people and it's across all industries—finance, technology, manufacturing. How do employers look to leverage global hiring to really fill this talent gap?
No, it's a great point. Certainly searching for talent, if you're gonna limit your search to your hometown or your local area, you're probably, one, falling behind the competition, and secondly, you're limiting the amount of talent you can ingest in your organization in a timely manner.
We've seen the rise for talent has forced many companies to step out of their comfort zone and recruit globally, and we've seen it across many countries—Italy, Australia, UK, as well as Canada have all seen a greater than 30% increase in the hiring of global tech talent just in the past couple years.
That's actually really interesting, right? And I think it begs the question—where are the places where we're seeing, you know, the talent hubs really form?
No, it's a good point. And certainly, as a company you can start and look at, "Hey, I'm gonna go after some talent in New York, in London, in Tokyo and Hong Kong," and everybody knows about those talent hubs, but they're gonna be competitive and they're gonna be expensive.
Why not look at some of the emerging ones, some of the secondary ones that maybe aren't on the top of everybody's mind? Toronto, for example. Canada's largest city, has now been described as an emerging and somewhat understated tech hub with a large population, combined with all the universities focused on developing skilled talent, putting those people into the workplace on an annual basis.
South Palm, Brazil, one of the largest cities in the world, is home to many tech startups, and well-established tech companies now are setting up their Latin America headquarters there. Companies like Uber and Spotify have chosen Brazil as their Latin America headquarters. We're also seeing it being a great destination for global tech events heading to Brazil.
Lastly, let's talk about Mexico City as an opportunity for U.S. companies to hire. Mexico, very aligned with U.S. in terms of time zones, in terms of coordination and communication in work, but you have a highly educated workforce, one where English is commonly spoken and you can do it at a much lower cost.
So we've seen all kinds of talent hubs beyond the obvious ones form in the past couple of years.
Honestly, I think that's amazing just where we're seeing these talent hubs form. If I'm a U.S.-based employer and I'm just kind of dipping my toe into the water of hiring globally, having that same time zone, same language, you know, being able to tap into Mexico and Canada, I think that really opens up a lot of those doors for SMBs that may have been cautious beforehand. So I'm really interested in some of the trends that you're seeing across these hubs. Are there certain verticals or maybe certain roles that you're really seeing expand internationally?
Yeah, so we're seeing multiples, obviously. Let's talk about some of the verticals. Some are pretty obvious what you'd expect—software, manufacturing, biotech, financial services, as well as business services, but now we're seeing some other verticals on the rise. Gaming is becoming pretty popular from a global recruiting standpoint, semiconductor, health services and banking as well. In terms of the functions that are getting filled, there's HR roles, there's management roles, there's operation roles. And in terms of the types of titles, we track this by our clients in terms of what they're hiring. We've seen titles hired from anywhere from a wellness coach for the company to a COO.
So it really, you know, spans a wide variety of titles and roles.
Oh, I think it's really cool. You know, there clearly is so much opportunity out there—industries and roles and just really the entire world. I'm interested to understand maybe just a little bit more of how small and medium businesses would approach global recruiting, especially those that might not have that dedicated recruiting team or even a dedicated HR department.
Yeah, so the answer to that's interesting. You know, that question of where do I even start? With this, even GP, we've been at this employer of record model for over 10 years to where we actually help companies once they found the candidate to employ them in a quick, compliant manner. But the feedback we got was, "Hey, we need help finding these people."
So what we've done as a company in the last year and a half, two years, is formed a network of recruiters around the globe in country that can advise our clients on what type of roles you're looking to recruit for and give them advice on what type of market conditions are, what's the compensation gonna be, et cetera, so they can have a successful experience not only hiring the person, but actually finding them.
So I think that all sounds amazing and I love that there are resources out there to help SMBs just embrace the international talent. Going back to my last comment, though, many SMBs don't have the large dedicated HR teams. And my guess is it would take a small army, right, to be fluent in all the nuances in all the regions when it comes to, you know, areas like you mentioned, like benefits and compensation.
So if I have a company that's looking to embrace that international workforce for the first time, how would I begin to align, you know, maybe my compensation or benefit strategy to be flexible and to really be competitive in these new markets?
That's a good question because I'd say firstly, no two countries' compensation and benefits are equal, so you really have to keep that in mind.
But two pillars to keep in mind, two concepts if you will. One is adaptation. Compensation is determined by several factors: local legislation, cultural practices, the job market, all things to consider when you're hiring in that country. Secondly, once you do adapt to that country's laws of markets—reevaluation. Be willing to reevaluate what you've put in place on an annual or semi-annual basis to make sure you're satisfying those candidates that you're recruiting, as well as the candidates that you maybe already have brought in the organization so you're not falling behind the organization. So it's adaptation to get in and then it's reevaluation to stay.
That is so interesting and it's definitely something employers need to keep in mind just in the strategy with this. So could you maybe give some examples on pay practices of how they might differ from country to country?
Yeah, and they definitely vary from country to country. So for example, one of the big things we run into in many European countries, companies like Austria and Belgium—at the end of the year, employees expect a 13-month, one-time payment of their one 12th of their salary as a bonus. Now, this isn't a law or legislative, but this is what the common marketplace is. Others vary—other allowances around paid time off, it can start as minimal as two weeks, year one, it can go all the way up to six weeks.
So it really depends on the role and the country that you're actually hiring from. Also, be aware of the minimum wage; that varies by country. In Belgium, it's a 38-hour work week, not a 40-hour. Anything over 38 hours has to be paid at an overtime rate of up to 150%. So it really, you know, varies by country and it's important to have a partner like TriNet or GP to help you understand that when you're recruiting for that role in that space.
I mean, to me it just sounds so complex. Could we maybe take a step back and highlight just a few areas, a few key areas that employers should have top of mind when they're exploring global growth? For example, what are some of the compliance challenges that you have seen businesses face when they're trying to just get started in growing globally?
Yeah, sure. Compliance is important. It's the top of everybody's mind ‘cause non-compliance means dollars and costs. So data compliance is one of the things that should be on the top of mind for everyone recruiting in another country. Many countries have enacted laws around data privacy. GDPR laws that protects an individual's data, specifically their digital data so that they have some control over it. There has to be some privacy, security information employees have access to and use. Taxation presents scalability challenges for companies. How many employees I have, what are the tax laws associated with that?
Benefit packages—they also present compliance challenges. There's a minimum benefits offering you have to offer employees in the country. To remain competitive, you may want to consider offering supplemental benefits to stay ahead of the competition. All these things come with compliance.
Being out of compliance on any of these can mean costly dollars and unforeseen expense. This, I believe, has been a big barrier why small businesses have not even looked into international hiring because of the risks. Now with the employer record model and companies like GP, this is our area of focus.
Let us worry about this, while the small business focuses on what their businesses actually do. Just like TriNet handles the domestic HCM HR capabilities, we'll worry about all the laws and the benefit requirements in over 180 countries.
And legal and compliance, I mean, it just so complex and it's always changing. So having a good partner, a partner like Globalization Partners, really versed in all the nuances in all those regions, it's critical. I've heard this term a lot—geographic differentials. Could you maybe explain a little bit about this area and how companies should really think about geographic differentials in a global environment?
Yeah, sure. So geographic differentials is, as long as remote work is here to stay, it's here to stay. And a simple way to think about it when you're recruiting for a role, if the role absolutely needs to be in a certain location, if you're recruiting, you have to have a person in New York because you have clients in New York or whatever that business reason may be, or in London, expect to pay more from a compensation differentials.
Then say, I have to have the role in the Midwest, in St. Louis or Kansas City or somewhere like that, that's just how compensation differentials work from a location center. However, when we look at remote work and if the role can truly be done anywhere, do those geographic differentials even need to apply?
Now, there's no right or wrong answer here, but companies are gonna have to look at the roles and decide—is this a remote role or does this need to be location-based—and take that into account into their decision and how they apply the differentials.
I think that a whole idea of remembering, you know, one size doesn't fit all. I think that's really good advice, you know, as employers are just looking at those different locations.
So we've covered a lot, so much, and I'm sure that many watching are asking the question, you know? Where do I get started? Jerry, I'd love for you to share your thoughts on, you know, if I'm a small and medium-size business, how can I take action on what we've talked about today to really accelerate my growth and to stay competitive in this environment?
So I think we're gonna continue to see shifts in remote and you know, being on site or being into a hybrid workplace. We've seen the large companies try and come out—the Bloombergs and JP Morgans—recently and say, "We're bringing people back to the office five days a week, you know, in person" and I think that's, if you go back to my original Gallup poll of almost one in two employees will potentially look for a new role. That might present an opportunity of a new talent pool to the small business market. We'll have to wait and see how that pans out with those companies trying to bring people back, but having a flexible approach, I think, is the key.
And where people need to work, where they need to be, can they do it remotely? And offering that as part of your workplace, that working remotely is being flexible. It's now a line item in the benefits package. What is my work life gonna be like?
Yeah. Work life balance, now, I think just from the pandemic, from everything in the world, being able to work from home and then having to go back into the office, it's so key for so many people.
I think we're coming up on time and this has been just such a great conversation. I know I've learned a ton and we've received some questions from the audience and I'm hoping we have time to maybe squeeze in just one of those questions if it's okay with you.
Sure. I’m fine with it.
All right. First question. If we hire an employee from another country, would we eventually be required to set up a legal business entity to maintain or add additional employees?
Good question. So, no, it's really not required. GP can hire in over 180 countries and we leverage our own entities to do that and use our in-country expertise to do that on the client's behalf.
You wanna add more employees? You can do that through us. Most companies, once they get to a certain volume, we'll look at, "Hey, does it make sense for us to open our own entity?" But many companies get into certain countries say, "I'd never plan on open an entity there. I'm gonna leverage GP and just stay with them as my employer of record."
I think that's some really good advice. So I think we're about out of time but I know, Jerry, you and your team, you'd be happy to get in touch if something sparked interest in one of the folks that have joined today. So if you wanna learn more, we're gonna provide a link in the chat, and there's some additional resources you'll see here on the platform on how to contact Jerry and his team, some commonly asked questions that we can put out there about Globalization Partners and employer of record. Jerry, thank you so much. You've taught me just a ton today. This has been a really good conversation.
Yeah, Jessica, hopefully the audience sees this as an opportunity, as a way to ingest talent into their organization in a quick manner and expand that pool that they're looking for. So I appreciate the time. Good luck with the rest of the conference.
And thanks very much.
And thank you too! Have a great day!