January is traditionally a time for transition and churn in the jobs market. Looking to make a new start for a new year, many professionals go on the hunt for fresh employment opportunities. Employers, meanwhile, start the new year by getting their annual programmes up and running, which more often than not includes workforce planning. In recent years however, an additional factor has emerged to put a new spin on the January job hunt: the rise of remote working.

The benefits of remote-first operations
Thanks to improvements in digital technologies, many jobs can now be completed remotely, just so long as employees have a half-decent broadband connection. As a result, a new type of remote-first business has emerged. These organisations hire the talent they need irrespective of location. It’s thought that around 16% of businesses are now remote first.

There are a number of clear advantages to the remote-first model. For one, the business can access a much wider pool of talent, as they are not restricted to searching only in their local area. This makes it more likely that they will find the perfect fit for their needs. 

Second, remote-first businesses are better able to reduce costs, as in many cases they can do without physical office space. According to one calculation, remote working can save employers as much as £10,000 in costs per worker. 

Finally, there is a certain degree of brand cachet associated with being remote first, and it’s unsurprising that tech-savvy, disruptive startups are particularly keen on the model. 

The complexities of managing a remote workforce
However, the remote-first approach is not without its challenges. And these come to the fore when addressing legal obligations surrounding employment contracts in specific countries, such as taxes and employer contributions. 

A new breed of HR business, so-called Employer of Record (EOR) platforms, have sprung up to help businesses handle the administrative and compliance requirements associated with employees based abroad. However, in doing so, EOR businesses often find themselves burdened with their own operational complexity to manage. This is particularly true when it comes to international payments.

The cross-border payments challenge
For all the investment and entrepreneurial energy that has gone into fintech in recent years, the movement of money across borders remains clunky, unreliable, and slow. You may imagine that digital technology would slowly be eradicating the friction and speeding things up, but the reality is that while user interfaces may have improved, much of the underlying infrastructure is out of date and highly fragmented. 

The net result is that EOR firms looking to set up cross-border payments on behalf of their clients must navigate complex infrastructure and unfamiliar jurisdictions, while trying to comply with a regulatory framework that’s constantly shifting. Managing global payments in this complex environment demands a significant investment in time, money and other resources which these businesses could better spend elsewhere. From opening offices, hiring personnel, and sourcing and managing multiple supplier relationships, to refining contracts; from negotiating fees, to navigating unfamiliar regulatory frameworks; there are endless sources of friction. 

Even initiatives designed to make cross-border payment easier are often fraught with difficulties. Take IBANs as a case in point. Introduced in 1997, IBANs were supposed to eliminate any distinction between cross-border payments in Europe. In reality however, IBANs are only effective on a very local basis, with inter-European cross-border transactions often incorrectly treated as foreign payments. Meanwhile, differences in IBAN formats can lead to unnecessary rejections. EOR companies take note: in the complex area of global payments, even services branded as “local” are often anything but. 

Simplifying cross-border payments
EOR businesses have identified an important emerging need for remote-first businesses, but they will be looking for ways to deliver against this need without the risk and cost that comes with complex cross-border payment systems. One way for EOR businesses to achieve this goal is by using a payments curation platform.

Payments curation is a deeper, more holistic solution to the complexities of international payments. Using payments curation, EOR companies can access a complete cross-border payments network through a single API and just one relationship – a significant advantage given that the payments flow currently requires anywhere between 10-15 partners, contracts, and APIs globally. 

Payments curation eliminates the complexity of establishing a global banking network, providing firms with access to best-in-class payments products in each region optimised for cost, speed, and efficiency. Removing the need to integrate with new partners every time an EOR business extends into a new market, the solution is also highly scalable. 

Finally, as payments curation enables EOR companies to always connect to the best technologies available, they can overcome common challenges such as the IBAN issue discussed above. In the case of IBANs, payments curation places multiple rails within the grasp of EOR providers, enabling them to cherry pick the most direct and local route. With payments curation “local” really does mean local. 

Focusing on the core
EOR platform providers have recognised an important truth: remote-first businesses are choosing to go down that path because it unlocks value for the enterprise. They are not doing so because they enjoy managing geographically dispersed employees, or getting to grips with the rules and laws of different jurisdictions and regulatory regimes. And that is where the EOR platforms add value. They take on these core responsibilities so that enterprises can focus on whatever it is that they do best. 

The same logic applies to EOR platform providers themselves: managing highly complex payment processes is not their core business. By leveraging a payments curation layer in their operations, EOR platform companies can free themselves of these non-core processes, so they can maintain their focus on helping their clients meet legal and compliance obligations. In doing so, they reduce costs through optimised pricing and by not having to maintain a large internal payments team. This in turn provides a significant competitive differentiator that will help EOR providers stand out in what is an increasingly competitive market.