A smart CEO always looks up growth trends, market demands, and employee needs. In the next decade, the smart CEO will always opt for GEO (Global Employment Outsourcing). Because the era has changed. It brings in new management techniques, technology, and affirmative action.
Companies have been establishing BPOs in India for a long time. The main goal of outsourcing was to acquire cheap labor from developing countries. Today as more businesses expand their spheres, competition has also increased in these countries.
This phenomenon has called for hiring local executives in the respective region. These employees handle projects that cater to their native region. Their requirement outweighs the costs they bear.
Here is where third-party organizations step in to manage all the outsourced employees' legal work. These third parties are called Employers of Record or Professional Employer Organizations.
The outsourcing market is expected to grow to 40.16 billion dollars by 2025. But where is it headed, and how will it function?
#1. The Rise of Remote Work
It is not a surprise that employees around the world are prioritizing personal well-being over work. Remote work allows employees to complete tasks in their comfort zone.
Flexibility in time and space is attractive for the post-pandemic workforce. Companies and employees alike save money that is spent on commuting to and fro from work and real estate costs. 84% of experienced employees say that working from home is a happier alternative to offices.
Apart from this, technology has made it easier to hire global talent. Gone are the days, when a company would send a project head to a foreign country that guides and leads the team.
Global Employment Outsourcing has made the remote work process better and more efficient for companies. They no longer need to form legal entities and extra procedures to hire.
The future will hold good for PEOs who will manage the payrolls, terminations, and other HR needs of these employees.
#2. Trust in Outsourcing
The big question is- Do global companies trust outsourcing partners? The answer is yes. According to Fortunly, 78% of businesses feel positive about their outsourcing partners. India is the most preferred IT outsourcing country. The reason behind this is explained below.
India has a large talent pool of highly competent professionals in every field. The government is very supportive of foreign direct investment and takes steps to provide state-of-the-art telecom services.
Also, an outsourced employee understands the company's values. Companies are looking for employees that work long-term and lead projects based in foreign markets. Contracting a reputed PEO increases transparency and builds trust.
The GEO management assures that the employee is satisfied in the work setting that is spread across two regions. Global Employment Outsourcing helps companies to keep a record of their overseas employees. Therefore, GEO builds trust both in the employer's and employee's minds.
#3. The Advent of Start-Up Culture
Many governments around the world are favoring a free market economy. Entrepreneurs are no longer afraid to put up a new business. In India, the number of start-ups has gone from 733 in 2017 to 14000 in 2022.
Start-ups who operate from a small space benefit a lot from outsourcing. According to Clutch, 37% of small businesses outsource their work. It is a cost-efficient measure. Accounting and payroll are the most outsourced factors.
Hiring good candidates in the local region is not always possible. Start-up owners have recognized the need to expand as quickly as they can. Deals can be made from anywhere around the world and creating a monopoly in several small regions is a profit-making decision.
The cherry on top is faith in start-up ventures. Big tech giants such as Twitter and Meta have been laying off thousands of employees. This has led to employees working for companies that have small teams.
Global Employment Outsourcing enables start-ups to not limit their potential. They can depend on the PEO to manage their employees. In the meantime, the founders can focus on business growth and productivity.
#4. Age of Automation
Cloud servicing technologies are on a constant rise. Cloudwards has predicted that by 2025 up to 100 zettabytes of data will be stored in cloud computing software. This number is equivalent to every word ever spoken by mankind.
Cloud computing has made leave and attendance management more effortless. Payroll processing and disbursement have also seen an increase in accuracy and punctuality.
It was expected that this technology will move payrolls and other processes in-house. But thanks to Global Employment Outsourcing, PEOs have picked up on automation.
Now, companies can ask for assistance from PEOs who have the latest technology in hand and specialize in payroll and compliance-related issues. Companies use these technologies without even investing in and updating them.
Automation will see a sharp peak in the coming decade because it is robust and fast. Small businesses and start-ups lack the resources to invest in SaaS. Therefore, they will delegate the HR duties to PEOs.
#5. Increase in Outsourcing Locations
The western world considers India and the Philippines as prime outsourcing locations. But they are not the only ones who will remain so. Governments across the third world know the importance of Forex.
The high cash input from western countries is appealing and steps are taken to increase the same.
- Puerto Rico, Vietnam, and South Africa are new offshoring locations.
- Fiji has aimed to create 100,000 offshoring jobs.
- Nigeria is looking for new outsourcing prospects under the African Continental Free Trade Area (ACFTA) agreement.
Global Employment Outsourcing will have a large place in the future of management. It is not a cup of tea to make and manage legal entities in these countries without an expert -or PEO. These third parties care for adherence to local laws, bank systems, and payrolls.
- Remote work is the top priority of employees.
- Work is going to be outsourced not just locally but globally.
- Start-ups are on the rise.
- Technology is expensive but faster.
- Outsourcing locations are increasing.
All these factors will favor Global Employment Outsourcing in the future.
Paysquare is a payroll processing company that takes care of local as well as international payrolls. We manage temporary staff payrolls and compliance issues of Indian employees. Consult Paysquare to manage your employee payrolls of Global Employment Outsourcing.