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JP GOOCH GLOBAL DIRECTOR, PARTNER & CLIENT SOLUTIONS CXC GLOBAL
MANAGING YOUR GLOBAL CONTINGENT WORKFORCE
MANAGING DIRECTOR, AMERICAS CXC GLOBAL
JOHN SMITH
JP GOOCH DIRECTOR, PARTNER & CLIENT SOLUTIONS 15 years in HR consulting 5 years in Global Employment and Payroll 1 Global MBA 1 Start Up Company, built and sold to ADP
CXC GLOBAL – INTRODUCTIONS MANAGING DIRECTOR 20+ years in HR consulting 16 Years Global Contractor Compliance Experience Has worked with most of the MSP, VMS, RPOs
JOHN SMITH
CXC GLOBAL EXPERIENCE 68 Countries 7 Regional Compliance Centers - USA/Canada - Brazil - UK - Hong Kong - Singapore - Malaysia - Australia 180 team members 26 languages 24 Years in Business
AGENDA
• Review global expansion, compliance and payroll trends
• Share some of the topics to be aware of when managing a global contingent workforce
• Future state of global workforce growth
QUICK SHOW OF HANDS HOW MANY HAVE MANAGED EMPLOYMENT OUTSIDE THE USA?
COMPANIES SEEK GLOBAL GROWTH 72%
60%39%
of companies plan to increase their international share of business
of companies say their international planning will increase
of US CEOs plan to complete a cross-border M&A in the next year
GLOBALLY MOBILE & CONNECTED Over 2 Billion Smartphones Worldwide
Average user checks phone 46 times per day
WHAT IS THE “GIG ECONOMY”?
Millennials
91% expect to stay less than three years
The gig economy
42 million
U.S. workers are 1099
65 million
projected increase by 2020
34% of the workforce has
a second job
1of3 millennials freelance
COSTS OF GLOBAL EXPANSION
EMPLOYMENT COSTS
LEGAL COSTS
CUSTOMS COSTS
CORPORATE TAXES
TRANSLATION COSTS VALUE ADDED TAX (VAT)
REGISTERING AN ENTITY
UNION COSTS
MULTIPLE WAYS TO ENGAGE RESOURCES
HARD TO TELL
WHICH IS POSSIBLE
EMPLOYER OF
RECORD
CORP TO CORP
INDEPENDENT CONTRACTOR
CONTRACTOR OR EMPLOYEE?
BEHAVIORAL CONTROL • When and where do they work? FINANCIAL CONTROL • Who pays business expenses, can they have a
profit OR loss? RELATIONSHIP CONTROL • How long is the contract, employee benefits
offered?
TEST IS NOT THE SAME GLOBALLY CANADA • Similar to the US; 5 question test
o Do you have "authoritative control" to do your work? o Do you set your hours? o Do you pay your own business expenses? o Do you get paid only for work done? o Can you, and do you, have other paying clients?
MOST COUNTRIES HAVE MULTI-FACTORIAL TESTS CAN VARY BY REGION OR LAW APPLIED • China - no “Independent Contractor” concept; Labor Dispatch is possible • India – rules vary by State; each has its own labor laws (29 States) • Belgium – Four Factor test in 2006 Employment Law, and Nine Factors in another 2012 Act
ASKING GOOD QUESTIONS Contractor or Employee? •Recognize that each country has different rules
Social Costs •Generally speaking, four categories: •Medical Care, Maternity •Retirement/Pensions •Work Injuries/Disabilities •Unemployment Insurance •Each country has different levels •Range from 0 to over 100% of income
Termination •Rules must be followed closely, especially union rules
Vacation / Holidays •Many countries require 13th salary (Christmas Bonus)
Annual requirements •Some countries require annual salary increases
GOOD QUESTIONS – EXAMPLES Should I be engaging this
resource as a contractor, as an employee, or under a Corp to Corp contract? Please define the Social
Costs I should expect to pay when hiring workers in
Country?
What are the rules I need to know about when terminating
an employee?
How much notice do I have to give?
What are the requirements around Vacation / Holidays
Is there a 13th salary (Christmas Bonus) required?
Are there annual requirements like union
mandated salary increases I need to know about?
CXC GLOBAL – HOT TOPICS • Major changes to treatment of UK contract workers • Wrong classification of worker will be costly • End users can be held liable for unpaid taxes, debt transfer
United Kingdom
• Restriction on independent workers • Changing rules on how to engage contract workers Netherlands
• Deemed employment issues increasing • Restriction on employment of contract workers Germany
• Changes to rules for employing contractors France
THE FUTURE? LOOK TO THE PAST…
• Specialized services: Engineering, Architecture Industrial Revolution
• Manufacturing to Asia and Latam • Expats to oversee 1970s/80s
• Global services: payroll, accounting, data processing • Mix of expats and local oversight 1990s
• Call centers, IT and coding work • Statement of work professional contractors 2000s
THE FUTURE? THE GIG ECONOMY Everyone in the world with a smart phone, an internet connection and a skill has potential • Car? > Uber driver • Bike? > Last mile delivery • STEM skills? > In demand
Workers will contract with multiple employers
Truly global market for talent
Compliance and Due Diligence will be critical
QUESTIONS?
CONTACT INFORMATION
John Smith Managing Director – Americas E: [email protected] Office: +1 203 459 0683 Toll Free: +1 800 588 0292 ext. 102 (Canada & USA only) Twitter: @Jsmith_ct
JP Gooch Global Director, Client & Partner Solutions Email: [email protected] Office: +1 919 825 1759 Mobile: +1 919 357 7469 Twitter: @jpgooch11
Website: http://cxcglobal.com/