Is free good? Yes, it can be, but when it comes to global employment platforms, you should proceed with caution whenever you see the word “free.”
When you want to try out a streaming service or a fitness app, free trials give you the opportunity to test the product before you make a purchase, but you would probably avoid partnering with an accountant or lawyer who offers “free” services. The same should go for your global partners.
When you are on the verge of entering new international markets, you want a partner that offers the highest quality of service. However, it’s important to be aware of low-quality providers that see an opportunity to gain your business by using “free” offers as a smoke screen for poor service.
The problem with “free” when it comes to global employment platforms
A global employment platform is an integrated solution that enables companies to recruit, hire, and onboard international team members quickly and easily — offering another level of simplification to building remote global teams.
This simplification comes from the union of the platform’s advanced technology and the Employer of Record model, which allows companies to hire global team members without setting up their own entity.
Building a high-quality platform involves a significant investment in infrastructure from the provider and a strong global workforce at the core. However, many providers cut corners.
What does this mean?
Some global employment platform providers try to save time and money by hiring third parties in different countries rather than setting up their own entities and hiring their own teams. In addition, a platform might not be able to hire employees in every country. In this case, the technology is often the hook to attract you, but ends up lacking efficiency when it comes time to use it.
This part is where the word “free” comes in. You may see offers, such as:
- Service is “free” for a month, or even a year.
- The first team member you sign is “free.”
- Initial signup for use of the platform is “free.”
- Manage and pay contractors for “free.”
A provider that has done the legwork knows the effort and investment needed to support a quality global employment platform. A provider that has not done the work knows that the word “free” can help them reel in customers.
10 consequences of partnering with a low-quality global employment platform
You might think, even if the global employment platform doesn’t provide the highest-quality service, the “free” aspects will outweigh this downside, right? Not really – the impacts of partnering with a low-quality provider are serious and long-lasting.
Remember these 10 consequences of falling for “free” offerings from global employment platforms:
1. Poor contract generation
When you onboard global employees through a global employment platform, the employment contract is one of the most crucial aspects of the process. A good employment contract should be compliant, clear, and generated quickly.
If you choose a provider that doesn’t have the capability to quickly and compliantly generate a contract for each new hire, you might end up losing top talent and having to invest in legal help, which can skyrocket the cost of hiring globally, rendering the “free” offer useless.
2. Bad customer service
You are probably part of the 96 percent of consumers that say customer service is important for loyalty to a brand. More than a measure of preparedness, customer service indicates a global employment platform’s investment and commitment towards its core mission.
Once you sign with a low-quality provider, you may struggle to reach an actual customer service representative, or find a timely and successful solution to your problems.
This lack of response comes from the fact that many providers don’t take the time to hire an in-house team and work through third parties. If you partner with a provider that uses third parties, they won’t be able to guarantee the quality of their customer service or the time it will take to solve problems in a different country.
You must also remember that your global employment platform will provide your international team members key services, such as payroll. If your team doesn’t have a positive experience, they may leave your company.
3. Payroll issues
Have you ever not been paid on time? It was probably a frustrating experience. Late payment is a sensitive subject that can cause incredible frustration, stress, and friction between your team members and your company.
Every country has different payroll requirements and processes. Paying multiple team members in different currencies worldwide requires help from global payroll experts.
Many providers that offer “free” global payroll don’t have their own team of payroll experts, but rather work through unreliable, third-party payroll providers, often resulting in late payments and tax penalties.
4. Lack of quality benefits
You don’t just want access to global talent; you want access to the best global talent. However, the best talent expects their employer to offer them quality benefits packages, in addition to mandatory or expected local benefits, such as 13th-month bonuses and certain holidays off.
If your provider does not have a team of local experts who know which country-specific benefits to offer, you will have a tough time attracting the top local talent.
5. Mistakes during onboarding
Did you know that research shows a great onboarding experience can improve team member retention by 82 percent? Your global employment platform will directly impact the success of your onboarding process. This means that a low-quality platform could have negative effects on your employee retention.
As you welcome new team members and introduce them to their day-to-day activities, your global employment platform will be responsible for setting them up with payroll and completing all administrative HR processes — two crucial aspects of your team members’ onboarding experience.
If your chosen platform passes your team members on to local third parties during their onboarding, there is a higher probability of confusion, miscommunication, and a negative onboarding experience overall. If this happens, you may have to halt your recruitment efforts to find a higher-quality provider.
6. Lack of compliance
One of the most complex, if not the most complex, aspects of global growth is maintaining compliance with country-specific laws. It is also one of the most important reasons to look for a high-quality global hiring partner. Your global employment platform should be able to seamlessly navigate international labor laws.
A global employment platform that does not guarantee compliance puts your entire global venture at risk. Local labor or tax violations could result in a ban from doing business in another country — no “free” offer will be worth the liability that your company could face globally.
7. Negative employee experience
The employee experience doesn’t end with onboarding. It’s important to create and nurture a positive company culture for your local team — one that translates to each step of the employee lifecycle. The right platform will help you take this positive culture global, but the wrong one could damage your image on an international scale.
In today’s remote world, your team members’ experience is more vital than it has ever been. While you can make your international employees feel part of the team day to day, if you choose a platform that has not invested in local experts in each country you’ve hired in, your global teams may feel they lack access to the same quality of expertise and service as your local team members. This can prevent you from retaining top international talent, as team members want to be treated equally, regardless of their location.
8. Hidden expenses
While “free” might be synonymous with “saving money,” it can mean the opposite when it comes to your global employment platform. Some services may be advertised, but are not fully available, or you may be able to sign up for free, but end up having to pay for outside expertise or counsel to solve issues related to contracts, taxes, and labor disputes.
If your provider has not put the necessary time and money into building a quality global employment platform, these expenses end up falling onto you. This means that you will take on the financial burden of global onboarding, payroll, taxes, and compliance, while also paying for your chosen platform.
9. Low-quality partners
If your global employment platform works mainly through third parties, and they don’t advertise this openly or aren’t forthcoming with these partners’ names, the chances are that they’re working with low-quality companies. Don’t be surprised if issues arise in the future and you have to deal with an unknown source to find a solution.
10. Troublesome market exit
Once you have achieved enough global success in another country, you might decide that establishing your own entity makes the most financial sense. Or, if your company didn’t find success in a particular market, you could choose to exit and need to conclude your operations and terminate your local team members.
In either case, a partner with weak operations will leave you stranded. Compliantly terminating employees is a complex process that involves following country-specific laws.
Some global employment platforms that don’t own local infrastructure can register your employees under different small businesses, acting as a middleman that escapes liability and responsibility in the case of unlawful terminations. Similarly, if you discover that your team members were not compliantly employed or classified incorrectly, you might face penalties and back taxes, not to mention damage to your global reputation.
What your global employment platform should offer you
It is often the case that companies are enraptured by the idea of “free” and don’t realize they’ve chosen a poor-quality provider until it is too late — and by then, their name is associated with poor business practices. Instead of looking for “free” and putting your company at risk, make sure that you look for the following qualities in a global employment platform before committing to the partnership:
- Contracts: Your platform must have the ability to generate compliant contracts, customized to the labor laws of each country where you want to onboard team members.
- Service: In-country experts will be able to quickly and accurately answer every question for you and your team members.
- Payroll: A quality platform has the capital and the expertise to make on-time payments worldwide, alongside the appropriate tax deductions for each country.
- Benefits: You should be able to attract the best talent with a platform that offers local, competitive benefits that are regularly updated as needed.
- Onboarding: Your platform should streamline critical aspects of onboarding, such as contract generation, benefits, and payroll, so you have the time to answer your new hires’ questions and ensure they feel part of the culture.
- Compliance: Your provider should take 100% responsibility for ensuring that your team members are employed compliantly, regardless of location. Your company should not be liable in the case of any violations.
- Employee experience: Your team members should have their questions and complaints answered in a timely manner. Local experts should handle any team members’ requests and have protocols for sensitive issues, such as whistleblower complaints.
- Expenses: A quality global employment platform will lighten the burden of hiring globally. Your provider should be upfront with what their fees cover and guarantee access to global in-country experts without charging you extra down the road for fees related to third parties.
- Expertise: Your platform should have global brand name partners that empower their services, rather than dubious third parties that can be hard to contact and tend to dodge responsibility.
- Transitions: A quality employment platform will help you transition your team members, whether to another country, or to your own local entity whenever you choose. It should also help you with terminations and transferring any sensitive information following local laws.
How to find the right global employment platform
A global employment platform provider invests in legal, financial, payroll, and HR expertise, alongside global entities and cutting-edge technology. So, suppose a platform is trying to pull you in with “free” services. The chances are that the goal is to distract you from the fact that their infrastructure, team, and partners are not up to the global standards required to develop a long-term, honest, and fruitful relationship with your company. After all, believing something is free is easier than taking the time to ask thorough questions to ensure quality, especially when you’re eager to begin your company’s growth — and many low-quality providers capitalize on this.
If you want to ensure that you end up with the highest-quality global employment platform, you should put every potential provider through their paces. Ask critical questions that will allow you to see past any marketing smoke screen.
We invite you to read our eBook to learn more: The 20 Questions You Should Ask Before Choosing a Global Growth Platform,
Contact us, and start hiring globally today!