The Rapid Expansion of the AI Space

In the wake of business disruptions triggered by the COVID-19 pandemic, the demand for workers skilled in AI has grown exponentially. In its Technology Vision 2021 report, Accenture highlights that 34% of UK organisations have increased their reliance on AI technologies since the pandemic.

However, as AI technology develops at breakneck speed, bolstering more and more areas of business, the skills gap within the AI space continues to widen. In fact, Accenture notes that only 27% of UK business leaders believe that their non-technical workforce is adequately prepared to leverage new technology. 

Not only is there a scarcity of AI professionals, but, according to The Alan Turing Institute‘s report, “Where are the women? Mapping the gender job gap in AI”, there are extensive gender disparities within the field. However, these disparities cannot be addressed without an increase in the number of professionals working in the overall AI space. 

The Paradox of Skills Shortage Vs. High Unemployment 

HR leaders are grappling with the paradoxical challenge of a skills shortage set against a backdrop of high unemployment. World Social and Economic Outlooks predict two million additional job seekers in 2024, an already alarming figure which may worsen if projected recessions occur in certain key markets. While unemployment rates remain elevated, it is becoming evident that the specific skills required for emerging roles often elude the existing workforce.  

Though there is much fear around the impact of AI on existing jobs, predicted figures indicate that AI could create more employment opportunities than it eliminates. By 2025, the World Economic Forum anticipates that while AI may replace around 85 million jobs, it will also create roughly 97 million new roles. However, in most countries, AI skillsets remain limited, and demand is consistently outstripping supply. If AI really is the future, how do we get to a position where we leverage its benefits and bridge the skills gap?  

What this paradox suggests is that we do not currently have the strategies in place to bring those skills to existing workforces – an issue which is not just limited to tech. Industries such as construction and the green economy are experiencing similar problems, and HR professionals are tasked with devising innovative approaches to bridge this gap, focusing on reskilling and upskilling initiatives, fostering a culture of continuous learning, and collaborating with government bodies, educational institutions, and adjacent organisations to ensure a pipeline of talent that aligns with the evolving needs of the workforce. To kickstart these strategies, they need to be agile in bringing onboard existing talent – following the skills to where they are most plentiful. 

Global Talent Pools – Where are the AI skills?

Understanding the geographical distribution of top-tier AI talent is paramount for companies seeking to win the talent race by hiring overseas. Presently, the United States stands out as the epicentre of AI research and innovation, with nearly 60% of “top tier” AI researchers affiliated with American universities and companies, according to Macro Polo.  

India, on the other hand, is emerging as a formidable player in the AI arena. With a significant investment of $3.24 billion last year, it is the fifth largest global recipient of AI funding. Moreover, India leads the pack with the highest penetration rate of AI skills among all G20 and OECD countries. With a cheaper workforce and larger population than the US, it is fast becoming a desirable destination for talent scouting. 

As these statistics illuminate, the U.S. and India represent highly desirable talent markets for AI recruitment efforts, offering a rich pool of skilled professionals and a robust ecosystem for fostering AI innovation. For HR leaders dealing with a skills shortage, tapping into these talent hubs becomes a strategic imperative, providing access to a wealth of specialist expertise that can help to address the evolving demands of the AI-driven landscape. 

The Case for International AI Hiring

Why should HR leaders look to address the skills gap by hiring in other countries? Since 2020, the concept of hiring beyond borders has become increasingly ingrained in hiring strategies. 72% of businesses with a distributed international remote workforce model have seen improvements in productivity. Hiring where the talent is also allows organisations to upskill the existing workforce at home, in that skilled international talent can train their colleagues and multiply the spread of skills within an organisation. The World Economic Forum predicts that over half of all global employees will need to upskill or reskill by 2025, so it is a matter of getting ahead of the curve. 

The benefits of remote opportunities apply not only to the organisation but to the worker, as well. Remote work has become a greater possibility in many businesses and is often the preferred mode for those in the tech sector.  According to a 2022 Dice report, 60% of tech professionals ranked 100% remote work as their “most desired workplace setting,” and 20% wanted to work more than 50% of the time at home but listed working part-time in an office as the second most desired setup. And when there is a skills shortage, companies must be competitive and meet worker needs in order to attract and retain talent. This fact may not yet be widely embraced by HR leaders, but in the context of high unemployment rates, with skill requirements limiting the talent pool, it is key to be creative and competitive in order to optimise the workforce. 

The Compliance Imperative

Hiring talent overseas might sound like an easy fix to the issue, but it is crucial to be aware of the potential pitfalls. For example, legal compliance in international hiring remains a huge factor for consideration. A company cannot simply apply to the laws of their home country to the employment of an international employee; the laws in the US are considerably more relaxed in some areas such as performance management and termination than they are in other countries, such as Japan (another frontrunner in the global AI skills race). If they attempt to employ overseas without a legal entity set up there, there may also be permanent establishment implications and other tax liabilities.
 

Strategies for Compliant International AI Hiring  

What can organisations do to join the race to upskill and hire international AI talent, without falling foul of legal issues? There are a number of tactics and strategies that can be deployed. Businesses can set up appropriate legal entities in the countries in question; there are different types of registration and not all options are hugely costly. In some instances, it is possible to set up as a foreign employer, provided you remain aware of the employment obligations applicable in that country. An employer of record can also be used; this is a mechanism that employs your staff for you in countries where you lack your own entity.  

If the worker is carrying out contracts for multiple organisations at a time, there might be a case for engaging them as an independent contractor, although again businesses would need to be extremely aware of the definition of a contractor in the hiring location, and whether they might be seen as a “deemed employee” for tax reasons. 

When hiring abroad, it is advisable to use compliance assessments – an evaluation of a business’s compliance with regulations and policies – to ensure any international hiring is done correctly. 

How HR Leaders Can Close the Skills Gap

The global push to acquire AI talent has never been more urgent.  Yet the paradoxical emergence of a serious skills gap and worsening global unemployment landscape highlights the critical need for nations to simultaneously address the AI skills gap and invest in broader workforce development. Companies seeking to win the AI race should see international hiring as a catalyst for upskilling and reskilling their existing or local workforces.

To bridge the AI skills divide, HR leaders must embrace both global hiring solutions and domestic talent development strategies. This dual approach requires a commitment to building a robust AI ecosystem which will need to include:

• Understanding and appreciating the compliance factors that can be a barrier to international hiring.
• Developing partnerships with governments, educational institutions and similar industry verticals, to improve international knowledge sharing, and create tailored AI skill training programmes.
• Creating internal upskilling programs, to prepare existing employees for the changing technological landscape.
• Targeted recruitment and support for underrepresented groups in order to redress disparities and create a more inclusive AI workforce.

While international hiring offers an essential path to securing AI expertise, addressing the skills gap demands a comprehensive strategy. By investing in domestic talent development and collaborating with international partners, organisations can future-proof their workforces, ensure compliance with ever-evolving labour laws, and drive innovation in the AI era.