More employers are planning to hire outside the US, but some may not be ready for the challenges ahead

Have you jetted off to any far-flung destinations recently? Even if you haven’t, your recruiting strategy may be headed overseas.

Recently published data from ADP suggests that more companies plan to grow their workforces internationally. The findings are based on a survey of more than 1,700 business owners, senior HR or payroll leaders, or decision makers conducted earlier this year.

Some 32% of mid-sized companies employing 50 to 1,000 workers in the US plan to expand their workforce globally, and 36% of large companies with 1,000 or more employees in the US plan to do the same. Currently, 75% of mid-sized and 46% of large companies surveyed by ADP do not have workers outside of the US.

Wanderlust recruiting. Several factors may be driving companies to hire internationally, Jason Delserro, ADP’s chief talent acquisition officer, told HR Brew. The primary reason, he said, is that as more US companies expand operations into foreign countries, they need boots on the ground to support their growing business. And quite a few companies are doing that; 56% of US businesses reported considering expanding into other countries earlier this year, according to Santander UK.

“Companies need to grow,” Delserro said. “A lot of the times you expand and you have to increase your geographic footprint, so you have to have people that are on the ground.”

But there are also other factors at play, Delserro noted. Talent in other countries may be cheaper to recruit than in the US. In recent years, US companies including SHRM and Boeing have outsourced corporate roles to foreign countries. In 2023, Stanford economist Nicholas Bloom estimated that 10%–20% of service support jobs, including software developer, HR, and payroll, could be outsourced over the next decade.

Moreover, advancements in remote work and collaboration tools have made it easier to hire abroad, he added. Separate research from the World Economic Forum found that the number of digital jobs that can be performed anywhere in the world is expected to grow from 73 million in 2024 to 92 million by 2030.

But expectations ≠ reality. Just as a long-planned vacation can go completely off the rails, hiring abroad may have obstacles that HR teams aren’t prepared for.

ADP’s survey uncovered discrepancies in anticipated and actual challenges experienced by companies hiring internationally. For example, the four most common challenges anticipated by large employers were navigating cultural differences (chosen by 44% of respondents), equality of compensation across a global workforce (34%), retaining employees (32%), and performance reviews and appraisals (32%). But similarly sized employers that have hired globally said the top issues they actually ran into were addressing compensation equality (34%), recruiting and talent acquisition (27%), global alignment of systems (27%), and varying HR policies by region (27%). While compensation equality was correctly anticipated, other compliance issues were seemingly overlooked by large employers ahead of expansion.

The two key missteps likely at the core of employers’ expansion headaches, Delserro said, are lacking a strong grasp of the culture in the country they’re hiring in, and not being fully prepared for the complexities of navigating local compliance and regulatory laws.

“For companies that haven’t expanded, they probably don't understand the level of customization that you actually need,” he said.

Before hiring in another country, HR teams should ensure they’re fully prepared by budgeting for higher-than-expected labor costs, as these can vary widely from country to country.

“It’s important to invest and get the infrastructure set before ‘Go.’ A lot of the times, companies will run behind it and try to fill the airplane with the gas as it’s flying, whereas they probably should have filled it when they were still on the runway,” Delserro said. “Maybe just take a little bit more time to expand, be set up for their clients and the talent they’re trying to attract.”

Employer branding can be an important tool for attracting talent, but the branding that a company uses in its home community may not work in another, Delserro cautioned. HR teams should be mindful of local cultures to ensure their organization’s brand and image fit in and resonate with job seekers. He suggested companies consider enlisting the help of a recruiting outsourcing provider that has experience hiring in these new areas.

“All companies considering an expansion should really be packing their arsenal with at least the idea that they should leverage an RPO [recruiting process outsourcing],” Delserro said. “You can tap into and partner with international RPOs that actually already have had the presence on the ground in some of these countries, and have already worked through a lot of the legislation, compliance concerns, and regulations.”