When Hiring Internationally, 57% of U.S. Businesses Fear Regulatory and Compliance Issues & 50% are Worried about Currency Fluctuation
- 01.06.2023 07:00 am
Solar Staff, a fintech company that connects businesses with freelancers in over 190 countries, surveyed U.S.-based businesses to identify the main trends and the most pressing issues they face when working with independent international contractors. The resulting study was titled “Navigating the Global Freelance Economy: Challenges and Opportunities”, and some of its most relevant findings are that 38% of respondents indicated payroll as a pain point due to currency exchange and compliance issues, with 57% expecting compliance requirements to be the biggest issue in the coming future and 44% using crypto payments in an attempt to reduce risks related to cross-border payments.
For this report, Solar Staff conducted a multi-choice survey with 400 C-level U.S. managers, with the purpose of analyzing the current state of the U.S. and cross-border freelancing market, identifying key trends in this sphere, understanding the concerns of businesses, and forecasting future challenges in regards to hiring freelancers, including payments and other compliance mechanisms.
Since Solar Staff provides payroll services for U.S. companies engaging with freelancers in over 190 countries, the research specifically focused on the utilization of HR and payroll service providers, their implementation, and companies' preferences when working with said platforms, including what the respondents considered as the most relevant features.
The report revealed the following key insights on how U.S. companies attract cross-border freelancers and work with them:
- 62% of respondents indicated that the first problem when hiring a freelancer is finding one with a proper skill set.Even if the demand for specialized skills is increasing, the U.S. market is experiencing a staff shortage, and only 43% of companies already engage cross-border freelancers.
- To simplify the process of finding a suitable freelancer, the absolute majority (91%) of companies use contractor management systems at least sporadically, with 62% doing so consistently.
- Dealing with compliance is an issue preventing some businesses from working with cross-border freelancers, with only 22% of companies having an in-house team of experts and 66% relying on different kinds of tools to ensure the fulfillment of regulatory requirements.
Regarding payments, the research identified the following patterns:
- The ability to use various payment methods is crucial for business owners working with freelancers from different countries, as the choice of payment method depends on local legal requirements and the freelancers' capabilities to accept payments. 63% of respondents consider multiple-choice of payment methods an essential feature of a payroll platform.
- While classic methods, such as wire transfers (46%), are still used, an increasing number of companies use crypto in response to freelancer demand and to simplify and quicken international payments.
“We see that companies are becoming more concerned about the growing role of compliance than about the economic situation, since a recession impacts both companies and contractors. For the time being, 63% of the companies consider multiple payment methods an essential feature of a payroll platform because it allows them to choose the simplest payment option based on a freelancer’s home country,” comments Pavel Shynkarenko, co-founder and CEO of Solar Staff.
Business owners pay special attention to compliance issues as they may cause all kinds of legal difficulties, and when asked about the most critical issue in regards to the future of freelancer-related transactions, 57% of respondents mentioned that adapting to regulatory changes was their main concern. The anticipated challenges are associated with the potential tightening of restrictions of international transactions, particularly concerning payments, which may serve as an impediment to the growth of the cross-border freelance market.