HR management companies are going global

The Covid-19 pandemic gave employers the opportunity to hire from outside the borders of their company headquarters, thanks to the wider availability of talent afforded to them by remote work.

In January, more than one-half (54%) of readers surveyed by HR Brew said their organizations operate in two or more countries, with 22% reporting they’re present in 10 or more.

In addition to the prevalence of remote work, recent global hiring trends have been shaped in part by companies’ efforts to respond to labor shortages, as well as implement cost-saving measures, Dave McGonegal, VP of talent solutions consulting for North America at ManpowerGroup, told HR Brew in December 2022.

Though there are benefits to hiring globally, the process also introduces complexities for HR departments, including navigating new tax, payroll, and business entity regulations for the first time. HR management firms are now cashing in on the trend by expanding their offerings for global customers.

Gusto rolls out a global option. Companies offering employer of record (EOR) services, which manage payroll, benefits, and taxes for companies outside the country they’re based, have seen recent success from distributed workforce trends.

Deel, which provides EOR services, saw its valuation more than double to $12 billion from October 2021 to May 2022, when it closed a $50 million fundraising round with investors including Laurene Powell Jobs’ Emerson Collective. Papaya Global, a competitor, said in September 2021 that its revenue had grown 300% year over year for the last three years.

Gusto, an HR software management firm for businesses based in the US, is now offering global employment services through a partnership with Remote, another EOR provider. The product, called Gusto Global, was spurred by an uptick in requests from customers seeking to hire outside the US, Josh Reeves, Gusto CEO, told HR Brew.

“Small businesses used to be out of luck, because there’s a lot of cost to create a subsidiary, set up local business in that country,” he said. The global platform is starting with services for employers hiring in Canada, with plans to expand to over 80 countries.

Because Gusto caters to small businesses, Reeves said the firm is in a unique position to help companies that might not be as well-served by EORs that are geared toward larger companies.

Ceridian and ADP focus on international expansion. On recent earnings calls, both Ceridian and ADP highlighted the success of investments to support a global workforce.

ADP president and CEO Maria Black said one of the company’s strategic priorities is to “leverage our global scale for the benefit of our clients” during a July 26 call with analysts and investors. She noted GlobalView, ADP’s payroll tool for multinational employers, now serves workforces in more than 40 countries, and expanded into five additional markets in 2023.

The company also announced it will make Roll, its payroll product for small and medium-size businesses, available internationally.

Ceridian Dayforce, which provides payroll, is now available across most of Africa and the Middle East, with customers in countries like Kenya, Mauritius, and South Africa, Chairperson and Co-CEO David Ossip said on an Aug. 2 earnings call.

Asked about competitors seeking to enter the global payroll space, Ossip spoke of the complexities US companies encounter when they expand abroad, from time and attendance tracking, to taxes and pension calculations, to managing benefits. “I would not want to be a new entrant into the global market starting today and competing against the likes of us,” he said.