Expats and COVID-19: Options for continuing global projects

March 24, 2020

For companies looking to build out operations in new markets, deploying expatriates can make a lot of business sense, as they’re often someone you already trust to deliver results or highly specialized talent for your international projects.

But as the global economy becomes more unstable and mobility is strained by the COVID-19 pandemic, sending or keeping expats overseas may likely have to be put on hold.

Why? Beyond global conditions making it more difficult and dangerous to travel, expats can cost an average of two to three times what they would in an equivalent position back home, due to added expenses like travel, host or home-country tax differentials and relocation allowances. They also require immigration requirements and work permit obligations, creating even greater risk and uncertainty for businesses as recent government shutdowns will likely affect visa processing. 

For companies faced with tough decisions about cutting costs and reducing risk in order to protect the future of the business, expats (and plans to deploy them internationally) are a growing concern.

Expats are feeling the strain, too

Individuals living outside of their home country are probably feeling even more isolated and insecure about their current arrangement. Working abroad on international assignments can be stressful even in times of normalcy. During times of immense uncertainty, being far removed from their friends and families can make them eager to return home, especially if there are no travel bans or other restrictions keeping them from doing so. 

While the need for expats to return home is understandable, for companies trying to maintain or grow their international operations, not being able to rely on expats can be very disruptive.

How companies can continue to take action 

Unfortunately, for a majority of companies, even while there’s demand for labor in international markets, the risk of deploying expats can be too much to take on during an economic downturn. 

With sudden disruption to talent resourcing plans, maintaining an international presence or even expanding internationally can feel unachievable. But it doesn't have to. In times like these, companies can look for new approaches to minimize disruption. Even if your company has no legal entity in-country to pay for labor or is still in the process of setting up a local establishment, overseas employment goals are still achievable.

If your company is unable to deploy expatriates due to risk containment, here are some alternative hiring options to keep your international projects going.

Hire independent contractors

Independent contractors can be a cost-effective way to hire as your business needs fluctuate. This hiring arrangement often requires low staffing costs and can be a flexible solution for both your company and the contract worker. But more flexibility also means less control, as local laws significantly limit how you can manage them. 

Not only will you have less control over independent contractors, they are more risky to employ if you’re not fully versed in the local laws governing employee classification. For example, WW (formerly Weight Watchers) was penalized 23 million pounds for employee misclassification. 

And with our current global health crisis, there are other looming concerns with these types of workers because you will be unable to provide them with healthcare, sick leave and other benefits that protect their well-being. 

Hire international employees through an employer of record

Another option for your company to maintain an international presence in the event that you need to bring your expats home is to hire local employees through an employer of record service, like Global Employment Outsourcing (GEO). An employer of record like GEO can also quickly get you up and running in new global markets.  

Not only do you get access to a wider talent pool in the local market with GEO, you can also hire employees in two to four weeks without taking on the cost and risk of establishing a local entity. 

COVID-19 impact on H-1B and other visas

In addition to quick and compliant international hiring, GEO helps you retain employees that have had their H-1B visas denied or severely delayed, a likely scenario with COVID-19. An employer of record is not able to provide your employees with a visa, rather, this service can act as your contingency plan to keep them employed until visas are approved and processed.

In today's climate, there are plenty of strategic considerations your organization has to navigate―but expat uncertainty doesn't have to be one. Learn more about how an employer of record like GEO can help you continue operating internationally or hire in new global markets by contacting us today.

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