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   * Agile Talent
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3 WAYS TO AVOID REMOTE HIRE COMPLIANCE ISSUES AS YOUR SAAS BUSINESS SCALES

Author

AgileHRO

Published On:

December 12, 2022

Published In:

Uncategorized

As the acceleration of the SaaS market continues, its growth has had some
significant implications for the job market. SaaS businesses require highly
specialized skill sets, and the numbers of suitable candidates available are
struggling to match the demands of this surging industry. 

 

The result has been a considerable shortage of the right skills, and companies
are in close competition when it comes to pursuing available talent. The
solution for many SaaS based businesses has been to hire remotely, unlocking
access to a much broader global pool of prospects.

 

However, a remote team brings about some significant challenges, particularly
regarding the management of multiple employees in a number of different
countries – and ensuring they are (and remain) legally compliant.

 

Compliance is easily one of the most daunting tasks when managing a remote team.
However, by understanding common problem areas, one is much better prepared to
guard against them.


COMPLIANCE SIMPLY CAN'T BE AN AFTERTHOUGHT

Needless to say, it is the responsibility of the employer to ensure that a
remote worker is adequately taken care of. This care requires that all aspects
relating to their employment, such as statutory payments and taxation, is in
line with local requirements.

 

Compliance problems can be costly – not only in financial terms due to legal
issues and fines but also concerning company reputation and workforce morale.
And in the frenetic business landscape of the SaaS industry, it is paramount to
retain top talent and to be recognized as a company that cares about its people.
This is also an important quality when it comes to getting noticed and winning
favor with potential investors. 

 

Essential to note compliance is not a once-off task but a time-consuming,
complicated, and unavoidable long-term endeavor. In this article, we explore
three ways to avoid the pitfalls of remote compliance issues as your SaaS
business scales.

1. NEVER GET COMPLACENT WHEN IT COMES TO LOCAL EMPLOYMENT LAW

Managing local employment laws is a profoundly complex undertaking. The
regulations in some countries can even differ between individual states or
regions. Moreover, when managing numerous employees from all corners of the
globe, the complications multiply, especially for companies that are onboarding
at a rapid rate to support growth. 

Researching simple legal requirements for different countries, such as maternity
leave or overtime regulations, can be an extremely time-consuming exercise that
often leads to contradictory or outdated information.

In this regard, it becomes essential to have a reliable, current, and consistent
flow of information relating to these laws. Falling behind on keeping this
information up to date is not an option. 

 

This complicated and demanding administrative task requires a strategic and
proactive solution to keep one step ahead. As a result, many companies opt to
drastically simplify these issues and safeguard against penalties by partnering
with a global PEO (Professional Employment Organisation).  

 

A PEO minimizes compliance risk by taking over the responsibility of all legal
employment requirements. A PEO also assists companies with remote hires by
legally employing the person on behalf of the company and, therefore, managing
all employment contract details. This provides a dependable solution for any
SaaS company focused on retaining a positive remote workforce that will not
become impeded by compliance issues.


2. STAY ON TOP OF LOCAL TAX AND STATUTORY PAYMENT REGULATIONS

Calculating the correct tax and benefits deductions from an employee’s pay can
be a precarious operation, as once again, tax regulations can vary so much
depending on where in the world the employee is based. Often tax deduction
errors cause a shortfall which is then left up to the company to pay back, which
is undoubtedly a costly mistake that should rather be entirely avoided.

Not only are there basic taxes to consider, but different countries may also
have particular and unique tax requirements, such as tax to the church as
enforced in Germany and Denmark, among others. However, the complexity deepens
when even within a country such as Germany, the church tax is different in
Bavaria than in the rest of the country. 

 

But location is not the only determining factor for tax laws. In many countries,
different industries and types of jobs carry their own taxation requirements.
Equally important are the various statutory payments required by different
countries – and these can range from public healthcare to social security to
superannuation. 

Thorough research into these specifics is vital to gain the necessary knowledge
and understanding that is required, as too is meticulous record-keeping. And
when multiple remote employees are involved, the challenge can become too great
for an in-house HR team to undertake. As a result, at this stage, many companies
opt instead for outsourced support, such as partnering with a PEO. 

 

By outsourcing the responsibility of this compliance, the risk to the company is
significantly reduced – and the cost and time savings will also be considerable.

3. LEAVE NO ROOM FOR PAYROLL ERRORS

The management of an international payroll presents another considerable
challenge.
The data needs to be accurate and real-time, as payroll errors or delays can
cause extensive problems for employers. 

Numerous factors also need to be taken into account – such as working with
different currencies, time zone differences, dealing with foreign banks,
ever-changing legislation, and potential language barriers.

Another concern is the management of sensitive online data, where the protection
of confidential employee information is paramount. This requires a watertight
platform where the payroll is managed and data is securely stored.

 

But most importantly, a well-configured plan is the best way to approach a
global payroll system. The strategy must factor in the need for highly efficient
technology that also has the capacity for a degree of flexibility regarding
individual remote employee requirements. 

 

A centralized solution can provide an effective system for managing and storing
all data in one place. For many companies who have followed HR outsourcing
trends, the best approach to this has been to hand over the reins to an
outsourced HR company that is proficient in running a global payroll. 

 

The outsourcing of a global payroll not only saves money and time but also
ensures accuracy and legal and tax compliance – freeing up the business to focus
more on other important matters.

INVESTMENT IN COMPLIANCE PAYS DIVIDENDS

It can be of comfort to any business looking to expand its workforce
internationally to know that options of support to ease the process are readily
available. While it does require some dynamic strategizing and investment, the
end results in terms of risk minimization and cost and time savings will be
especially rewarding.

With the correct measures and partnerships in place, while paying close
attention to HR outsourcing trends, a scaling SaaS startup will not be impeded
by complicated employment-related admin but can instead focus on fulfilling
major growth requirements such as finding the best specialized talent,
fine-tuning product development, elevating the customer experience, and
strategic marketing.

By using the resources available, such as by partnering with an outsourced
global HR agency, the all-important workforce that is vital for company growth
will ultimately be stronger and happier, thriving in an efficiently run
international team.

Keep informed with all of the latest industry insights, trends, and information
by signing up for our newsletter today.


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Next Article Can I pay my employees

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