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Using Global Hiring to combat talent scarcity in Europe

CXC Global7 min read
CXC GlobalFebruary 23, 2024
CXC Global

By 2030, the world will be facing a talent shortage of around 85 million people — roughly equivalent to the population of Germany. But talent shortages don’t look the same in every country. While some places may be suffering from a shortage of particular skills, others have them in abundance. 

In this article, we’ll discuss how companies in Europe can use global hiring strategies to combat the talent scarcity problem they’re currently facing — and how using an employer of record (EoR) solution could help.  

Understanding the talent scarcity problem

In a recent survey, 75% of employers globally reported difficulty filling roles. This is down two percentage points from 2023 but is still more than double the rate reported in 2014 (36%). 

Before we get into talking about solutions, the most obvious question to ask is: why is good talent so hard to come by these days? Short answer: it’s complicated. 

Demographic shifts over the last few decades also have their part to play, as we explained in detail in our article on what experts are calling the ‘demographic drought’. 

And in Europe, rapid industry growth in fields like healthcare and renewable energy means that demand is outpacing supply for skilled workers. According to an estimate from the EU Commission, the investment needed to retrain, reskill and upskill employees for the green transition alone will be between 1.7 billion and 4.1 billion euros.

In this context, the old methods of sourcing and attracting talent simply don’t cut it — and companies that want to beat the talent scarcity problem will need to be proactive. 

In a ManpowerGroup survey from last year, respondents were asked how they would address their current skills gaps. The survey found that: 

  • 71% planned to upskill their current workforce
  • 37% planned to bring in more contract or temporary workers 
  • 33% planned to look at new talent pools (e.g. older workers) 

The survey also found that more than half of respondents (55%) were willing to hire outside of their borders to meet their needs. 

Tapping into a global talent pool

While talent scarcity is a problem facing many countries in Europe and beyond, it doesn’t look the same everywhere. By opening their minds to hiring overseas, European companies can access a vast pool of talent, both inside and outside of the continent. 

Of course, this brings its own set of problems, particularly if you want to hire outside of the European Union. In 2023, the EU announced plans to make it easier for companies to hire from outside the EU, and to make the EU an attractive destination for EU workers. 

But this proposal now needs to be negotiated by the European Parliament and Council — and these things take time. If you need to access talent from the global talent pool now, there is another way. 

Leveraging the remote workforce

Depending on the roles you’re hiring for, you may be able to access top talent all over the world — without asking them to uproot their lives by relocating. 

Although remote work used to be the realm of just a few lucky professionals, the rapid changes brought about by the COVID-19 pandemic mean that we’re all a lot more used to collaborating at a distance than we were before 2020.

In the UK, for example, an Owl Labs survey from 2023 found that 52% of employees work remotely at least part of the time — and 64% believe that working from home should be a legal right. 

All of this means that you’re probably already used to collaborating with at least some employees remotely. So what difference does it make if they’re based in another country? 

The role of employer of record (EoR) solutions

Here’s the thing, though: while hiring remote workers abroad can be a useful solution to the talent scarcity problem, it’s also a bit of a headache. Usually, hiring an employee in a different country means opening a legal entity there — which can be expensive and time-consuming. And if you only want to take on a handful of remote workers, it’s usually not worth the fuss. 

The solution? Simple: Use an Employer of Record (EoR) to hire employees on your behalf. 

An EoR is an organisation that takes on the legal and administrative burden of engaging workers, leaving you to handle their day-to-day management. The EoR acts as your workers’ legal employer — meaning there’s no need for a local entity. 

They usually also handle administrative duties like onboarding, payroll and benefits administration. And, they’ll ensure that your engagements comply with any local and international labour laws. 

5 benefits of using an EoR to hire remote talent across borders

EoRs let companies hire employees anywhere in the world, without incurring unnecessary expenses or running into compliance risks. Here are a few of the advantages of using an EoR to hire remote workers: 

  1. Cost-effective solution to hiring overseas talent

Opening your doors to overseas talent can help you find the people you need to move your business forward. But it’s also an expensive business: the costs of opening a legal entity alone can easily run into the thousands. 

Once that’s done, you’ll need to ensure you have the people in place to effectively onboard, manage and pay your overseas workers. And you’ll also need to consider ongoing costs for accounting and administration.

Using an EoR is a much more cost-effective solution because it doesn’t require you to set up a new legal entity. The EoR will also handle things like payroll and benefits for you, so you don’t need to take on administrative staff to deal with them. 

  1. Gives workers a positive employee experience

When employees work remotely from a different country, they may not feel connected to your organisation. Inconsistencies in processes and communication gaps can lead to a fragmented and frustrating employee experience — which can negatively impact productivity and morale. 

But when you hire workers through an Employer of Record, the EoR can help to bridge the gap between you and your employees by providing them with a streamlined, end-to-end employee experience. For example, your EoR provider might work with you to create and deliver a smooth, comprehensive onboarding process that gets new employees up to speed as quickly as possible. 

They’ll also be on hand to help employees with any HR concerns. Crucially, they can do this in the employee’s own language and time zone, helping them to feel comfortable and looked after. EoR providers can also deliver tailored localised benefits to improve employee engagement and satisfaction. 

  1. Reduces admin time for your team

When you work with an EoR, they handle the administrative side of engaging and managing employees for you. By working with you to streamline and automate essential processes, they can significantly reduce admin time for your team. 

Simply put, that means you’ll have more time to focus on the strategic aspects of running a business, rather than wasting time on paperwork and administration. 

  1. Ensures everyone is paid on time 

Reliable and efficient payroll processes are crucial if you want to keep your reputation as a quality employer. But paying workers in different countries can be complicated.

For one thing, you need to make sure employees are paid on time — but international transfers can add delays. Mistakes when transferring between different currencies can also cause issues with accurate payroll. And that’s without mentioning that you need to follow any local obligations for reporting and tax withholding. 

When you work with an EoR, they take payroll for your international workers completely off your plate. That means your workers get paid accurately, on time and in their own currency — with no extra work on your part. 

  1. No compliance worries 

Hiring internationally comes with a whole host of compliance challenges. For example, you’ll need to make sure all of your workers are classified correctly, or you could face fines, penalties and other legal and financial consequences. 

You’ll also need to make sure your engagements are in line with local and international employment laws, tax laws and business regulations — which can quickly get complicated. 

One of the key benefits of hiring your international employees through an EoR is that they will handle this side of things for you. EoRs have the local knowledge and expertise needed to ensure your operations are 100% compliant and alert you to any potential risks. 

Over time, this can save your company money in unnecessary fines and legal fees — and help to solidify your reputation as a conscientious employer that cares about getting compliance right.

Adopting a global approach to talent acquisition

In the context of the talent scarcity problem in Europe, it doesn’t make sense to limit hiring to your own backyard. By thinking beyond borders, you can open your doors to a vast sea of available talent. And, by working with a trusted Employer of Record, you can engage that talent easily and compliantly. 

Of course, hiring overseas talent through an EoR is just the start. In 2024 and beyond, companies need to take a holistic approach to talent management that combines remote work, diversity initiatives and innovative integration strategies to build a resilient, competitive workforce.

CXC’s EoR solution

At CXC, we understand that the best people for your business aren’t always within commuting distance of your HQ. That’s why we created our Employer of Record solution to help companies like yours to engage the best talent, wherever they happen to live. 

Want to find out more about how we could help you engage the talent you need in 2024? Speak to our team to get started. 

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About CXC

At CXC, we want to help you grow your business with flexible, contingent talent. But we also understand that managing a contingent workforce can be complicated, costly and time-consuming. Through our MSP solution, we can help you to fulfil all of your contingent hiring needs, including temp employees, independent contractors and SOW workers. And if your needs change? No problem. Our flexible solution is designed to scale up and down to match our clients’ requirements.

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