30th June 2020
As regular visitors to our blog will know, we’re committed to providing updates on the latest tax laws and regulation changes happening around the globe to our network of recruitment agencies. The contractor compliance landscape is constantly changing, however, more recently, with lockdown easing in several parts of the world, there is more that recruitment firms must stay on top of than usual. To summarise the latest developments, our CEO, Michelle Reilly, wrote a piece for Global Recruiter on the subject. Here are some of the key contractor placement trends that she mentioned which recruiters must be aware of.
International travel starts again
As we’ve all seen in recent months, international travel restrictions are constantly being changed, and while this information is correct at the time of writing, it’s important to check for any updates before making plans. As Michelle highlighted in her feature, there have been several positive developments for global travel. She explained:
“Under the supervision of the European Commission, a few destinations have begun to re-open borders, with a number of caveats being added by local authorities. Italy has opened its borders to EU nationals and UK residents, while the likes of Spain are imposing set quarantines for travellers entering the country.
“Others are planning to begin accepting citizens from neighbouring destinations to allow some freedom of movement while still containing the spread of the virus. Denmark, for example, has reopened for visitors from Norway, Iceland and Germany since 15th June. The Baltic States have also allowed free movement between the three countries.”
The developments in contractor recruitment
In terms of contractor recruitment, the last few months have been challenging to say the least. We saw a significant dip in activity, which was certainly a concern at the time, however, we’re finally seeing some positive signs.
As Michelle mentioned in Global Recruiter, we’re seeing a general increase in interest to once again start placing contractors internationally, with more agencies noting an uptick in engagement with employers. Despite the majority of borders remaining closed, clients are starting to make plans for when we return to the “new normal” and contractors can travel again. What we are certainly seeing is that employers are particularly keen to get things moving again across the Middle East, Asia and parts of Europe at the moment.
There are some countries of note which are particularly driving demand. We’ve seen more new opportunities emerge for contractors in Asia, which is certainly a growing market to keep an eye on. In this region, Pakistan and China are leading much of the demand for contract professionals. However, with news of a potential second wave of Covid-19 cases in China, this may quickly change.
Eastern Europe is another potentially lucrative area for hiring agencies and one that recruiters should certainly monitor in the coming weeks. As Michelle stated: “We have seen an uptick of contractor recruitment activity in countries such as Ukraine, Slovenia, Lithuania and Romania as travel restrictions are eased and companies in these destinations seek to get back to ‘business as usual’ activities where they can.”
Contractors continue to work from home
We can all agree that these have been volatile and difficult times for both recruitment firms and the contractors they place. And despite tiptoeing towards a ‘new normal’, the threat of a second wave of Covid-19 cases continues to loom. It’s perhaps no surprise, then, a number of employers are keeping remote working practices in place. Businesses have been adapting the way contractors work throughout the crisis, and even when we are given the green light, there’s a high chance that many clients will continue to encourage higher levels of homeworking than we saw before the pandemic.
The fact that expats are unable to relocate and work from offices has led to an uptick in the number of local nationals being hired to support projects – where skills are available in country at least. Michelle explained: “This is certainly something that will continue for the immediate future, but there are still some professionals that simply aren’t available in country for some destinations, so this move to local over expat certainly won’t be sustainable in the long term.”
Contractor placements trends: tackle each on a case-by-case basis
While making contractor placements has always been rather complex, it has now arguably become even more complicated due to Covid-19. As we’ve mentioned before, tax laws and compliance regulations differ in each country and these rules are changing constantly. Recruitment agencies must be sure to tackle each contractor placement on a case-by-case basis, as failure to do this and taking the same approach to each individual can lead to severe complications and difficulties. Therefore, while researching the latest developments, be sure that the information is correct for the client and contractor you’re dealing with at the time the contract is being agreed.
Depending on where you’re placing contractors the rules will be different. So, to stay ahead and avoid complications, it’s advised that recruiters seek professional advice.
What does the future have in store for contractors and recruiters?
It’s difficult to say what the future has in store for contractors. However, the signs are generally looking more positive for the world of international contract recruitment. As freedom of movement begins to pick up, we are seeing hiring activity resume again, and demand for expat professionals is likely to spike as more businesses seek to bring in the skills that aren’t available in country.
While we are by no means in the clear of Covid-19, the easing of various global lockdown measures will increasingly present more opportunities for international contractors. The crucial reminder as this happens, though, is that the complexity of the tax compliance landscape hasn’t changed, and ensuring that the individuals you place remain on the right side of the law in their work destination is still vital. Compliance with local employment and tax laws should always stay front of mind, no matter what is happening across the globe.
Here at 6CATS, our experts can support you with all of your compliance needs for destinations around the globe. No matter where in the world your contractors are operating, we have a team of experts on hand.
For further information, do not hesitate to give our team of specialists a call.