(i) The challenge itself: Confronting the issues
The majority of universities and educational bodies today are in some way “global”. All reputable establishments will operate partnership networks, overseas campuses and/or programmes of knowledge-exchange; in an increasingly commercialised environment, universities must develop and maintain competitive advantage in much the same way as the for-profit sector. The “massification” of the education system has catalysed a huge increase in enrolments over the last 30 years, and this, coupled with a decrease in mobility costs and easing of logistical complexities, has created a global field of competition for universities. As a result, the opportunity to maximise resources and attract top-quality candidates from around the world is rightly being seized.
Despite the easing of barriers to global mobility in recent years, universities still face significant challenges when faced with international hire or relocation situations. Funding, a frequent bugbear for educational establishments, is high on the list; research projects are often already cash-strapped and international assignments can be extremely costly endeavours if not executed properly. Research projects can be unpredictable and lead the researcher on unexpected or short-notice international travel, and the lack of time to properly plan can similarly lead to unnecessary expense. If the in-country activities are extensive, they could possibly lead to an actual legal requirement for a local tax-paying entity; however, for unpredictable or indefinite-term projects, using part of an already scant budget to set up locally is simply not an option. Another big concern for many educational HR and global ops teams is their unfamiliarity with local conditions such as employment law, taxation laws and immigration procedures. The socio-political situation and the stability of a country is also of prime importance to them as all universities and educational institutions have a duty of care for the safety of their students and faculty members whilst studying/working overseas.
At first sight, mobilising and hiring staff internationally can seem like an overwhelming task; but with the right questions asked, the proper experts consulted and the appropriate research completed, it is a vital exercise that will ultimately strengthen your university’s position and place it at the forefront of its field. Read on for advice on where to begin, and practical tools to solve your international hiring challenges.
When faced with a new global hiring/relocation situation, what questions should you ask yourself?
Mistakes in global hire usually stem from lacking a full comprehension of the individual circumstances of the project at hand, or applying a time or cost-saving solution that is not appropriate. As there is very rarely a “one-size fits all” approach to global mobility, take some time to weigh the situation up properly, speak to experts and ensure you have a well-rounded view before diving into any one option. The following questions will be helpful in gaining a better understanding:
– Location– where will the individual be located? From a duty of care and compliance viewpoint, what is the stability of that location?
– Nationality– where is the individual from? This could raise further questions about visas, tax liability etc. and is therefore an important consideration.
– Relationship– how is the person connected to your university? Is he/she a temporary hire and will he/she be offered another position with your educational body once the original project is complete? Is the individual considered a contractor or a full employee? If you are unsure about the legal definition of the person’s role, take the 20-Factor Test on Mauve’s LinkedIn page to confirm.
– Scope of work/timescale involved– what type of work will the individual undertake at the planned location and for how long a period? Start and end dates are particularly important for foreign nationals as they could determine the best immigration routes. It should be noted that even volunteers or low-paid interns may need a global mobility solution in place to carry out activities abroad.
– Payment– will payment for their tenure come from your university or a 3rd party? The possibility of fluctuating exchange rates should be taken into account and if payments will be made to/from a local bank account, consider the logistics of this and any losses which may be incurred as a result.
– Partners– does the university have local partners who can assist with either advice or services? This may be a partner educational institutional or a 3rd party specialising in local hire.
– Future plans– is this hire/relocation the gateway to bigger operations in the region in the future? A temporary solution may need to become more permanent further down the line; do you need to take steps to strengthen the organisation’s position by establishing a branch office or some other form of local entity? It could be more cost-effective to do so if operations are likely to become long-term.
(ii) Resolving the challenges: What mechanisms can you use to solve the problem cost-effectively and efficiently?
The method available to you will depend greatly on the individual circumstances of the hire, as these may cause local employment, immigration and taxation laws to come into play. Look carefully at your answers to the questions above, familiarise yourself with local laws and gauge which option is most beneficial to your university, or alternatively, consult a specialist Global Employment and Mobility Solutions organisation who will have expert knowledge in this area. The main options include:
- Direct Hire of the Individual
The university can opt to place the individual on its own payroll and employ him/her as a direct hire. This allows full control over the day-to-day activities of the employee and hiring process. However, it is important to be mindful of the employment and taxation laws of the country with this type of solution. Are you set up to payroll in country if the salary needs to be paid locally and will you incur fees by doing so? Will you need to amend the employment contract to adhere to local employment laws? In certain countries, long-term activity may prompt a requirement for a local entity. You must therefore ensure that you are fully aware of any potential consequences.
- 3rd Party Corporate Payroll, HR, Immigration or Contract Services
A specialist 3rd party company like Mauve Group can provide these services if you decide to hire the worker directly but want to ensure compliance in country. Although you would continue to retain the liability for the employment of the worker, a company of this sort would carry out any required corporate services on your behalf. As experts in local employment, this type of solution would mitigate risk while the university retains full control over the employee.
This is a contractual-based solution which is often utilised by universities where the overseas project is a collaboration or knowledge-exchange relationship with a local educational body or partner organisation. In this situation, the worker is employed through their local entity thus ensuring local compliance.
- Independent Contracting
Of course, if the scope of work is for a fixed term and meets certain criteria, another option for the university is to employ the worker on an independent contract basis. Although this alleviates a great deal of risk and responsibility for your organisation, it can be complex to manage as the worker has total freedom over his/her workload and time. In addition, there are often heavy penalties imposed for misclassifying a worker as an independent contractor when the individual is in fact an employee. It is important therefore to ensure that you have a full understanding of the working circumstances.
- PEO/Co-employment/ Employer of Record Services
A 3rd party organisation specialising in Global Expansion and Mobility Solutions can provide a type of service known as either Professional Employment Outsourcing (PEO) /Employer of Record (EoR) or Co-Employment Services. By using this type of company, via their representative office in the country you have chosen, the university is able to outsource the employment of the worker, but still retain control over the employee’s day-to-day activities. Companies such as these already have the local knowledge necessary to employ individuals. They have the ability to cut-through the local red-tape on your behalf and act as a first point-of-contact for multiple requirements, saving you time, expense and stress.
- 3rd Party Advisory Services
3rd party organisations specialising in Global Expansion and Mobility Solutions can also work purely on a consultative basis to equip the university or educational establishment with the right advice to hire the worker locally – whether as a direct hire, contractor or employee of a subcontractor. These expert companies can advise best-practice on all your local operations relating to payroll, taxation, immigration, HR and employment law. Your organisation can then put this guidance into practice as it sees fit.
- Set up of Own Local Entity
If your operations are almost certainly going to be long-term or permanent, or there are a large number of individuals to be hired, again depending on the individual circumstance of the project and location, it may be a more cost-effective route to establish a local entity. Some countries insist upon a local entity being established if extensive activities are being carried out, therefore this option is certainly worth consideration. There are many types of entity options and without full local knowledge, understanding the process can be complex. A 3rd party company specialising in Global Employment and Mobility Solutions can, however, point you in the right direction.
Mauve Group has a proven track record in delivering all the solutions detailed above to educational establishments and for-profit organisations alike, and can provide you with consultancy, project management and all other services you require. For further guidance about any of the hiring options detailed above, or how we could help your particular university or educational body to expand its global operations, contact us today.