As universities around the world plan budgets for summer programs and the upcoming academic year, they face a difficult, disrupted job market marked by unprecedented worker shortages, soaring inflation and threats of more pandemic disruptions. To circumvent these challenges, many institutions with international campuses and programs are rethinking how they engage faculty and staff abroad.
While a strong global hiring strategy deepens the prospective talent pool – bringing more perspectives and diversity to international classrooms – there are also critical compliance and operational considerations institutions must account for.
Tenure duration matters
When employing faculty and staff overseas, institutions often err on the side of caution and opt for short-term engagements to avoid long-term fixed costs. This rings especially true for adjunct professors and lecturers, who are usually brought on for part-time work. It’s understandable why an institution would want to implement contracts for the short-term, but we highly recommend they set a four-month minimum so as to maintain continuity and reduce the risk of losing workers in the middle of a term. Notably, many universities are effectively implementing longer-term contracts that engage faculty and staff overseas for two terms or more.
Adjust payroll practices accordingly
When establishing an international presence, some HR departments may be surprised to learn that pay frequency and practices vary in different corners of the globe. For example, payroll is usually a biweekly occurrence in the United States whereas monthly payrolls are generally the expectation in Europe and most countries around the world. Additionally, some countries may have more nuanced payroll norms and requirements that need to be adhered to, such as 13th-month pay. Therefore, it is important that HR departments adjust pay frequency and practices in each country they operate in.
Ensure compliance with independent contractor (IC) laws
Sometimes, institutions choose to engage workers abroad as independent contractors (ICs) as opposed to employees. While this may make sense in some cases, there are restrictions and limitations to such a hiring strategy. The general rule of thumb is that a worker is only deemed an IC if the institution does not have the right to control or direct how the work will be done, does not supply equipment, etc. If a worker is found to be misclassified as an ICrather than an employee, the institution could face hefty misclassification fines, intellectual property theft, costly compliance audits and reputation damages.
Plan for expense reimbursements
When hiring in countries abroad, universities and colleges should prepare for added expenses, especially for travel, visas and equipment. For example, if the institution hosts a study abroad program, there may be additional trips that occur during the term where a professor or staff member would need to be reimbursed. Not only do institutions need to allocate more funding for expenses, HR departments must also implement a system for processing reimbursements to workers. In particular, the adopted system needs to enable cost-effective, compliant cross-border transactions.
Intellectual property (IP) and equipment must be protected
Many times, the faculty and staff that institutions hire abroad are employed by multiple universities and colleges. This means they are working on different software programs across multiple laptops and devices, which could potentially compromise an institution’s proprietary information and expose the IT infrastructure to harmful cybersecurity risks. To avoid complications, institutions must consider how they incorporate robust protections for their intellectual property (IP), equipment and IT into each contract they sign.
Additional liabilities and regulatory measures can emerge overseas
Institutions with an international campus or program must also understand all potential liabilities within their operations abroad. For example, if a university is operating a laboratory in a country overseas, there may be additional regulations they need to comply with. To protect operations abroad, institutions will need to plan for the “worst-case scenario” and explore various types of added insurance policies. For example, they may look to cover additional exposures in healthcare, accidents, business interruptions or legal defense in their insurance footprint.
Sync up accounting processes as much as possible
In today’s digital age, there is an abundance of programs and systems available for accounting. As a result, within many university systems, each department operates independently as its own “company.” Essentially, there is often no centralized accounting or budgeting system. This fragmentation can present a formidable challenge when an institution attempts to establish an international presence. To overcome this, it is necessary to identify who the solution owner is by the department. This way, the department’s accounting system can be synced up with the international operations.
Workers abroad should be set up with local bank accounts
When operating an international campus or program, many institutions choose to send faculty and staff members from the home campus abroad. Other times, institutions may choose to hire local talent or workers coming from countries other than where the program is located. Depending on the laws of the jurisdiction, institutions will typically be required to pay workers locally and in local currency. Therefore, it is often necessary for faculty and staff to be set up with local bank accounts if they do not already have one. This requirement is particularly important if the institution is opting to hire and manage talent abroad through an Employer of Record (EOR).
An Employer of Record (EOR) solution can help streamline operations abroad
Establishing an international campus or program literally and figuratively expands horizons for institutions, offering students new life-changing experiences. However, due to restrictions in cross-border transactions and operations, hiring can be complex and tricky.
Many institutions find that partnering with an EOR locally can help protect their operations and enhance their global hiring strategy. Essentially, the EOR employs and onboards faculty and staff on your behalf under its respective local legal entities. You don’t necessarily need to establish a local entity yourself. The EOR assumes all legal liabilities and streamlines payroll processing, while you focus on other key growth areas like recruitment, development or even establishing programs in new countries.
Whether an EOR is engaged as a permanent solution or an interim fix before setting up an entity locally, the arrangement can help institutions scale opportunities in new countries and pave the road to success for international campuses and programs.
Find additional details on how EOR services could benefit your institution’s global footprint, or contact us to talk with a global hiring expert.