In the post-COVID era, global companies are quickly recognizing the power of remote work and distributed teams as it pertains to accessing talent anywhere in the world. This article tries to explore the ramifications of this irreversible global trend on employment structures, payroll, and compliance as it pertains to your career growth and role sustainability.
Quick context: you've landed an amazing remote job - you are in India but the team and company is based in the US.
Before we get to considerations for you, let's think about the company perspective for a second. As an employer, what are my objectives:
- Attract the best talent
- Maximize salaries I can offer (by minimizing recruiting fees, overheads, taxes)
- Employ with 100% compliance anywhere in the world
Now, what are my options:
- Incorporate a legal entity in your country to employ you - expensive, time consuming, and extremely distracting due to all the compliance and rules - read my blog here for the complete download on the owned entity approach. In general, overhead/taxes are anywhere between 25-50% of your salary to employ under this model
- Engage you as a contractor - majority of the top talent prefers fulltime engagement and employment rather than being engaged as a contractor (read my article here on the considerations in the contractor engagement model for you). Plus, this carries IP protection and compliance risks as well
Neither of these options therefore achieve my objectives. I much rather pay that 25-50% as higher salaries to my team than spending on overheads/taxes and I definitely need 100% peace of mind on compliance.
So what do I do?
I engage Kaamwork with its unique model to allow me to employ you exactly like my fulltime employee without the administrative hassle and cost of an owned entity. Kaamwork is the employer of record, manages local compliance, and also administers statutory and other benefits like medial insurance for a flat transparent monthly fee, much lower than costs in an owned entity.
So I am 100% compliant and can also transfer cost savings from not having a legal entity as higher salaries to the talent (you) - win-win!
Now let's turn our focus on you - the talent
You've applied to a job, interviewed with the Company, understood the role and your specific work directly from people you will be working with, and have also negotiated your salaries directly with them. So far, that all smells and feels like any other full-time job, right?
But then comes the question: I am not on the Company's direct payroll?
Its a simple question on face value with a simple Yes/No binary answer.
However, lets double click on the undercurrent of this question - I would argue that the motivation and relevance of this question is deeply rooted in how current employment models of outsourcing/contract/3rd party payroll are structured. Typically, companies would always keep key roles on their payroll and engage other (maybe less critical) folks through some sort of a 3rd party payroll. Aspects like (a) being treated on parity with direct employees, (b) inclusion in all core work areas, (c) promotions, appraisals, career track, and (c) access to full company benefits, are all fundamentally missing if you are not on direct payroll.
So its natural for you to think that not being on the Company payroll in this new world of global remote work has the same implications as as the traditional 3rd party payroll concept.
However, now think about what COVID has done to remote work - if at all there is a silver lining to this pandemic nightmare all of us are going through, it lies in companies realizing the power of distributed teams - right from sourcing: wherein the whole world can become your talent net to also huge savings: on overheads and taxes that can then be directly transferred to employees in terms of higher salaries or even invested to grow the business.
The reality is that companies are already building teams globally in what seems to be an irreversible trend - this is true for startups with less than 10 folks to companies with several thousand employees.
In such a scenario, would it really make sense for companies to open up legal entities every time they identify talent in a new country? Sure, they can engage you as contractors (common path for startups to save cost and time), but the more established or larger companies would definitely not want to take that route given the inherent compliance risks in that model. In fact, even if they could open up their own entities, the larger companies will look at the 25-50% cost of managing an owned entity as a poor allocation of capital - the overhead burden on their existing Finance and HR teams to understand, implement, and manage policies in a new country is an added drain and also a distraction.
A model like Kaamwork therefore becomes a very viable way for companies to attract and employ top global talent without legal entity-related restrictions.
But what about your concerns given the 3rd party payroll overhang - let's address them one by one keeping in mind the guiding principle or construct being rooted in the fact that the Company is hiring for key fulltime employees
- Parity: How do I know the company will treat me the same way as other employees?
Let's start with interviews: you go through the exact same process as any other fulltime employee. You are hired based on the Company's evaluation for a match on culture, skillsets, and leadership values. This relays into how you are onboarded and oriented on the team as well.
Once on the job, you have unhindered, equitable access and full inclusion into the company vision, strategy, and values the same way as any other fulltime employee.
This simply does not happen in the classic 3rd party concept where the employing company does all vetting and orientation
- Ownership of Employment Decisions: Who owns key decisions like termination, appraisals, and promotions?
The Kaamwork model makes it 100% clear that all key employment decisions are between you and the Company
In the classic 3rd party model, your legal employer owns these decisions
- Employment Rights and Benefits: How are these outlined and protected?
Companies engaging with Kaamwork sign detailed agreements which relay into ironclad employment agreements for you to protect all your rights and benefits. These include payments during termination, holidays and PTOs, and statutory + other benefits
Unlike the classic 3rd party model, these are all decided by the Company and simply relayed to you by Kaamwork
I would argue that its actually unfair for you to lose out on a perfect role just because the Company does not have a legal entity in your country
What's in it for you:
- Access to a wide net of opportunities - expand your net beyond only companies with legal entities in your country - open up the whole world
- Earn higher salaries - overhead and tax savings from an owned entity are directly transferred to you
- Richer experience: work with global teams directly and solve problems for markets or customer segments unexplored in the past
- Full Employment Rights and Benefits: Complete protection and peace of mind as you continue building your fulltime employment track record
- Work from anywhere: live in the city you like, avoid daily pollution-laden travel, and enjoy a much richer work-life balance
The Kaamwork idea is to empower you as a global fulltime employee wherein you can work with any company anywhere in the world as you carve a fulfilling career journey. I asked the question of whose payroll is it anyway in the headline because payroll or the legal entity processing your payroll per se should not be a bottleneck for you to showcase your talent on the world stage!