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Risk Management: Why Outsourcing Is Essential to Your Global Expansion Strategy

Demand is creating major opportunities for talent suppliers right now. Forbes and a recent SIA report state that freelancers and contractors make up approximately 35% of the workforce. Experts project that this percentage will continue to increase in the future. 

As work becomes more mobile and global, organizations are relying on staffing partners to help them hire in a borderless world. This creates an opening for ambitious talent suppliers looking for growth opportunities. However, with global expansion comes an increased risk of compliance violations, which can be costly and damaging. 

To reduce risk, these talent suppliers often partner with an employer of record (EOR) and agent of record (AOR). Such partners provide localized expertise and an extra layer of protection. This blog post will discuss some of the specific problems that arise when placing workers in other countries. It will also explain how EOR and AOR partners like People2.0 can help. 

What compliance risks do talent suppliers face when looking to expand globally? 

Global expansion has major benefits, including increasing the diversity of your talent pool and your profit margins. However, as you expand, your exposure to compliance risk increases exponentially with each new jurisdiction you enter. The variations in requirements can be an administrative nightmare to keep track of, and a tangled web of regulations could spell disaster for your business. 

Consider these potential pitfalls. Do you really have the bandwidth and resources to navigate them in-house? 

  • Misclassification of Workers: A simple error in classifying workers as independent contractors rather than employees could snowball into legal and financial nightmares. 
  • Compliance with Labor Laws: Each jurisdiction you operate in brings its own set of labor laws and regulations. A single misstep could result in hefty penalties, fines, and drawn-out legal disputes. 
  • Tax Compliance: The intricacies of tax regulations vary from country to country. Ensuring accurate and timely tax withholding, reporting, and remittance is no small feat, and failure to do so can lead to severe consequences. 
  • Contractual and Legal Risk Mitigation: Contracts with clients and candidates are fraught with complexity. Poorly drafted agreements could expose you to legal risks and disputes, jeopardizing your business relationships. 
  • Onboarding and Offboarding: The beginning and end of an employment relationship are critical transition points. Missteps in processes such as legal documentation, training, exit interviews, and compliance with termination laws can be disruptive and damaging. 
  • Data Protection and Privacy: In our digital age, the mishandling of sensitive data can lead to breaches, attracting legal actions and damaging your reputation. 
  • Local Presence and Representation: Claiming local presence and expertise is one thing; proving it is another. The absence of legitimate local representation could lead to co-employment issues and legal complications. 
  • Cultural and Language Barriers: Operating across borders often means interacting across diverse cultures and languages. Miscommunication can lead to misunderstandings, affecting your relationships with clients and workers alike. 

These risks are real and substantial, but they don’t have to be insurmountable. Here are some of the ways a partner like People2.0 can help. 

What can an EOR or AOR provider do for me? 

Because of the immense burden of these risks, many talent suppliers seek out partners who can manage compliance so they can focus on core competencies. Here are some of the ways that outsourcing risk management can help with global expansion: 

  • Risk Mitigation and Compliance Management: People2.0’s EOR and AOR services offer a comprehensive compliance shield, equipped to handle the intricate nuances of global jurisdictions and local regulations. 
  • Efficient Remote Operations: Our infrastructure provides the tools you need to onboard remote employees, handle payroll complexities, and ensure compliance while hiring globally. 
  • Contemporary Workforce Program Development: We help talent suppliers add independent workers and bring in global talent, resulting in a more versatile workforce. 
  • Focus on Talent Acquisition: Outsourcing administrative burdens to People2.0 optimizes your operational efficiency, freeing up resources to concentrate on nurturing talent relationships and delivering client satisfaction. 


This era of change in the world of work has created unprecedented opportunities to expand your contingent workforce. If you’re ready to tap into a global talent pool, do it without falling into a compliance quandary. 

A partner like People2.0 can navigate you through the intricacies of compliance, mitigate risks, and safeguard your organization. You’re not just outsourcing the back office; you’re embracing a strategic partnership designed to streamline operations, optimize efficiency, and enable you to focus on what truly matters — acquiring talent and delivering client satisfaction. Embark on your global expansion journey with confidence and peace of mind. Contact us today to learn about the power of our partnership. 

Interested in outsourcing and not sure whether to choose an EOR or an AOR? Check out our blog post to find out which service is right for you. 

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