Globalization has led to rapid changes in the talent landscape, with people from diverse backgrounds coming into the workforces.
The World Economic Forum (WEF) projects that 1.5 billion more people will be working by 2030. Population growth in developing countries and the rising female labour force participation will be the main drivers of this. It is projected that by 2030, 40 per cent of the workforce will be women, while people of colour will account for 30 per cent.
Companies have the opportunity to expand their teams internationally as the talent pool grows. Access to talent and incorporating them into existing teams offer companies a competitive advantage – faster scaling up of business, diversity of information and viewpoints, and reduced costs are some of the benefits.
A global workforce management also brings its own set of challenges such as:
- Navigating complicated legal and regulatory frameworks between countries, different cultural norms and communication methods, as well as language challenges.
- Competition for talent is also high, which means companies must work harder to attract and retain them.
According to Deloitte, the number of globally distributed teams is expected to increase by 30 per cent over the next five years. Gartner predicts that 70 per cent of companies intend to use telecommuting more often this year, and a LinkedIn survey found that 52 per cent of workers would be more willing to accept a job offer if it allowed telecommuting.
Outsourcing work to other geographies is often less expensive than hiring locally, which makes it an attractive option for companies seeking to reduce costs while enhancing productivity. According to the ‘Harvard Business Review’, businesses can potentially save up to 30 per cent on labour costs. Additionally, a global workforce allows for 24x7 customer service and brings diverse perspectives that can boost innovation and creativity.
Globalization has not just increased competition in talent but also transformed the nature of labour. To capitalize on access to this talent pool, businesses are adopting flexible and remote work policies. Technology and infrastructure advancements have made it simpler to collaborate from different locations.
Studies show that employees who have the option of working from home usually yield higher productivity levels. According to McKinsey & Company, companies that have employees working remotely are 25 per cent more likely to be productive.
Navigating complicated legal and regulatory regimes in many nations may present difficulties for businesses trying to access global talent. They may find it difficult to hire and manage personnel in other jurisdictions due to different rules for employment, visa, and tax regulations.
Therefore, collaborating with local service providers knowledgeable about regional laws and practices will ensure compliance with local norms and regulations. They can also offer services such as language translation, cultural training, support with international payroll, benefits, and tax compliance.
Collaboration with local service providers, as well as developing an inclusive HR infrastructure and culture will enable organizations to take advantage of globally distributed teams.