As New Zealand firms adjust their operating models to meet customer demands, cloud-based platforms empower them to hire, pay, and manage an international workforce compliantly and on more cost-effective terms.
Developing a distributed workforce strategy, to either support expansion into markets offshore or address skills shortages at home, requires navigating the complex legal landscapes of multiple jurisdictions.
This has traditionally posed a challenge for all but the largest companies, however emerging Artificial Intelligence tools promise to transform global hiring and workforce management.
Global hiring now encompasses roles well beyond those in the IT sector, extending to sales, content creation, and education. This diversification is demonstrated in Deel’s latest State of Global Hiring Report, which aggregates data from more than 300,000 worker contracts and more than 20,000 customers.
Filipinos represented the largest nationality by numbers on Deel in 2023, and the report shows them working virtually for companies in the UK, Australia and USA in roles ranging from administrative assistance to engineering and accounting.
Similarly, companies in the Netherlands, Japan, and Ireland hired Americans in roles including marketing, quality assurance, engineering, and accounting.
NZ employers are increasingly global employers
For New Zealand employers, the Philippines, India, and the USA emerge as prime sources of remote talent, particularly in fields like software development, sales, 3D art, and web design.
This trend towards international hiring is underscored by the situation in New Zealand’s tech sector. The Technology Investment Network expects this sector to recruit over half its workforce from abroad by 2028, especially from North America, Australia, and rapidly emerging markets in Asia and Latin America.
Total employment by these tech firms is predicted to reach 89,600 within that period.
As the ability to hire talent based in multiple locations increases, so does the need to understand local laws. I am excited about the potential of AI to effectively democratise access to critical knowledge for organisations, regardless of size.
To illustrate this point, Deel’s AI-powered compliance database enables managers to ask complex questions around regulations, salary expectations, and hiring trends in over 120 countries.
For example, “What’s the average salary of software engineers in my organisation in Estonia?” Or “What is the parental leave policy in the Netherlands” or “What’s the prevailing tax rate in the states in North America where we have employees?”.
AI-driven compliance reduces financial and reputational risk
AI tools ensure employers operate compliantly with the laws and labour regulations where their workers reside.
Mis-classifying workers as contractors rather than employees risks large fines for employers. Automated Worker Classification, where AI algorithms, using a database of local employment laws and jurisprudence, classify workers precisely, ensuring that contractual relationships comply with local standards.
Another application of AI is comprehensive Compliance Checks, reviewing hiring decisions thoroughly to ensure adherence to local laws.
AI systems update legal information in real-time, keeping hiring practices aligned with the latest legislative changes, enabling managers to make timely and informed decisions. Beyond current compliance requirements, AI can predict regulatory changes, empowering businesses to adjust their hiring strategies to avoid future compliance issues proactively.
HR processes are shaping up to be real opportunities for AI to be applied, especially where it actively impacts how global workforces are managed.
Introduced securely and with human oversight, AI mitigates risks actively, lowering the chance of legal disputes and penalties, and protecting the company’s reputation. Incorporating AI into global hiring and management practices enables managers to concentrate on strategic initiatives, confident they are acting within the law and their corporate policies.
This article was originally published in the June 2024 issue of NZBusiness magazine. To read the issue, click here.
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