Even as global hiring booms, mounting economic uncertainty is taking its toll.
Trade tensions, shifting immigration policies, and fast-changing international regulations all add up to ensure businesses can’t rely on a steady pipeline of new hires — while managing and retaining their global workforces is getting tougher.
In this environment, de-risking your workforce is paramount. As a result, compliance and payroll are moving from back-office functions to strategic levers in the battle to attract and retain talent.
Domestic and international challenges mounting
To understand why, let’s first consider the plight of a small-to-medium-sized US business. The US labor market is showing signs of strain. Beneath the headline figures, the structural challenges are stark:
- Skills gap: Nearly one-third of small businesses that tried to hire last year weren’t able to find employees who were a good fit, one recent survey found.
- Shrinking talent pipeline: Of 57% of business owners hiring or trying to hire in June, 84% reported few or no qualified applicants for the positions they were trying to fill.
The shortage of domestic talent is pushing US SMBs to consider international hiring to fill the gaps. But global compliance rules are in flux. Political shifts, advances in technology, and pay transparency mandates like the EU’s forthcoming Pay Transparency Directive (2026) are further complicating the issue.
The obvious response to these problems is to ensure you retain the workers you do have. This might involve benefits or competitive pay, but an underlooked element of retention is simply ensuring workers are paid accurately and on time.
Payroll as a lever for retention
Taking payroll seriously is directly tied to employee trust and retention. A UK survey found that a fifth of workers had changed jobs after being paid late or inaccurately. And one of the biggest drivers of inaccurate and late pay is the constant churn of new regulations.
“I always recommend that when new tax changes come out, people review them,” says Michael Nierstedt, Product Director of global employment platform Multiplier. “It’s not just because the system could be wrong — it usually isn’t — but so you understand what’s changing and how it impacts people’s pay.”
In a competitive labor market, companies that fail to make the extra effort to understand payroll’s many complexities risk losing top talent to their more reliable competitors.
A proactive stance on transparency
With pay transparency mandates rolling out, payroll compliance activities like publishing salary bands are often treated as a box-ticking exercise, but in reality they are another proven retention tool. As Nierstedt puts it: “Pay transparency is something everyone should be taking very seriously.” Indeed, employees at pay-transparent companies have a 30% lower intent to quit.
Unfortunately, only 19% of organisations globally feel fully ready for pay transparency. For the majority, preparations are still underway: And they are often inadequate. “Getting that data is really hard,” says Nierstedt. “If you don’t have someone in-house — and most companies don’t — I highly recommend hiring consultants for this. It’s too important to get wrong.”
Getting ahead of the curve by using transparency not just to stay compliant, but to build trust, equity, and long-term loyalty, confers another distinct advantage on the competition.
Why payroll needs to be a strategic partner
But no matter how good a business is at retaining talent, some staff turnover is inevitable. With shortages of local talent showing no signs of abating, going global is a necessity. The question then becomes: How to pay them compliantly?
According to recent research, 78% of multinationals reported facing compliance issues due to shifting employment laws. For many, compliance feels like a burden — but those that anticipate, adapt, and make use of the best technology are better positioned to expand without wage violations, tax errors, and reputational damage.
Global payroll solutions with real-time insights now provide more than error-free processing: They supply intelligence to guide expansion decisions, identify risks, and respond quickly to the shifts of a volatile market. Combined with expert local knowledge, they reduce exposure to fines, wage violations, and reputational damage.
The companies that foreground compliance in their payroll strategies will be the ones best positioned to weather demographic shifts, regulatory change, and the intensifying global competition for talent: Finding, keeping, and empowering critical talent wherever it resides.