New report cites noncompliance and geopolitical disruption as factors
The risk of noncompliance is holding organisations back from hiring globally, despite strong enthusiasm from executives to expand, according to a new report.
Findings from Safeguard Global revealed that financial losses from noncompliance "would certainly be one reason an organisation could decide to pause global hiring."
This comes as its poll among 400 chief financial officers (CFOs) in the United States and the United Kingdom showed that 78% reported losses of up to $1 million from noncompliance with local employment labour laws.
Another 22% of CFOs reported that financial losses from noncompliance have surpassed $1 million.
"These losses can include fines as well as back payment of wages, statutory benefits, and taxes," the report read. "In some cases, noncompliance can cause a company to be barred from operating in a country. And wilful violations of employment laws can lead to jail time."
Disruption as barrier to global hiring
Another factor holding employers back from global hiring is geopolitical disruption, according to the report, amid wars in Ukraine and the Middle East.
Four in 10 CFOs said geopolitical disruption has made their organisation more cautious about hiring globally, while 38% said it held them back from expanding.
According to the report, the top operational difficulties faced by organisations in global hiring include:
- Making a first hire in a new country
- Testing hiring in a new country before deciding whether to expand there
- Managing workforce changes linked to an acquisition, merger, or restructure
- Supporting short-term, project-based, or seasonal hiring across countries
- Fixing or reviewing an overseas employment arrangement because of compliance concerns
Global hiring paused despite enthusiasm
These barriers holding back global hiring come despite strong enthusiasm from CFOs to expand, according to the report.
Most CFOs (97%) are interested in global hiring, while another 96% believe they are prepared to hire workers globally.
Florence Cazemajou-Flint, CFO at Safeguard Global, described the situation as the "CFO confidence paradox."
"While they're confident in their ability to manage cross-border hiring and capitalise on global opportunities, many may underestimate the resources needed to navigate the realities of international employment," the Safeguard Global CFO said in the report.
"That's the CFO confidence paradox in a nutshell: confidence is high, but execution remains difficult."
CFOs in the survey said the top areas where they need support in managing the complexities of global hiring include:
- Help with local contracts, payroll, or benefits
- Clear, country-specific compliance guidance
- Ability to achieve faster onboarding timelines
"To bridge the gap, CFOs need more than confidence — they need the right support to simplify compliance, reduce risk, and scale global hiring with certainty," Cazemajou-Flint said.
