How Global Uncertainty Is Reshaping Expansion into Australia and New Zealand
Global uncertainty is not stopping international expansion, but it is changing how businesses enter new markets. Economic volatility, workforce shortages, evolving immigration policies, shifting trade relationships, and ongoing supply chain disruption have contributed to a more cautious business environment. While organisations continue to pursue growth opportunities, many are taking a more measured approach to where they invest, how they hire, and how they establish operations in new markets. For businesses looking beyond their home market, Australia and New Zealand continue to stand out as attractive destinations. Both countries offer stable economies, established legal systems, skilled workforces, and strong long-term growth opportunities. However, as many businesses discover, successful expansion requires more than identifying commercial potential. The practical realities of employing people, managing payroll, navigating visa requirements, and maintaining employment compliance can quickly become some of the most complex aspects of international growth. Key Takeaways • Global uncertainty is causing businesses to take a more measured approach to international expansion. • Australia and New Zealand remain attractive expansion markets due to their stability, skilled workforces, and established legal systems. • Workforce mobility, visa sponsorship, and access to talent are becoming increasingly important strategic considerations. • Businesses are placing greater emphasis on employment compliance, payroll management, and local expertise. • Flexible expansion models such as Employer of Record (EOR) arrangements are helping organisations reduce complexity while entering new markets. Why Australia and New Zealand Remain Attractive Expansion Markets Despite broader economic and geopolitical uncertainty, Australia and New Zealand continue to attract international businesses across a wide range of industries. Both countries offer highly skilled workforces, established legal systems, and strong demand across sectors including technology, healthcare, engineering, construction, mining, and professional services. They also provide businesses with access to mature economies, transparent regulatory environments, and strategic opportunities throughout the Asia-Pacific region. For many organisations, this combination of stability and opportunity makes Australia and New Zealand attractive destinations for market entry, employee relocation, and long-term business expansion. However, stable markets do not necessarily mean simple markets. As businesses expand internationally, they are often required to navigate employment frameworks, payroll obligations, tax requirements, and workforce regulations that differ significantly from those in their home country. How Is Global Uncertainty Changing International Expansion Decisions? While international expansion remains a priority for many organisations, global uncertainty is influencing how those decisions are made. Businesses are increasingly focused on balancing growth opportunities with operational risk. Rather than committing immediately to large-scale infrastructure investments or entity establishment, many organisations are taking a more phased approach to entering new markets. This shift is being driven by a combination of factors, including economic uncertainty, rising operational costs, changing workforce dynamics, and the need to remain agile as market conditions evolve. As a result, businesses are placing greater emphasis on flexibility, scalability, and understanding local market requirements before making long-term commitments. How Is Global Uncertainty Affecting Workforce Mobility and Access to Talent? Access to talent remains one of the most significant drivers of international expansion. However, ongoing skills shortages across many industries, combined with changing workforce expectations and increased competition for talent, are making workforce planning more complex. For many organisations, workforce mobility has become a strategic consideration rather than simply a recruitment activity. Businesses are increasingly looking beyond their domestic markets to access specialist skills, relocate key employees, and build teams that support long-term growth objectives. This trend is particularly relevant in Australia and New Zealand, where skilled migration continues to play an important role across sectors experiencing talent shortages. As businesses navigate uncertainty, the ability to access and mobilise talent efficiently is becoming an increasingly important factor in expansion planning. Why Is Visa Planning Becoming a Strategic Expansion Consideration? Historically, visa planning was often viewed as a process that followed expansion decisions. Today, it is becoming an increasingly important part of expansion strategy itself. Businesses looking to relocate employees or hire overseas talent into Australia and New Zealand must consider visa eligibility requirements, sponsorship obligations, processing timeframes, and ongoing compliance responsibilities. These factors can directly influence hiring plans, project timelines, and operational readiness. As immigration frameworks continue to evolve, organisations are recognising the importance of understanding visa pathways earlier in the expansion process. As Fran Davies, Founder and Director of ANZPEO, explains: “We’re seeing businesses take a much more measured approach to expansion than they were a few years ago. The focus isn’t necessarily on slowing growth, but on ensuring the right employment structures, workforce planning, and local expertise are in place before entering a new market.” What Operational Risks Do Businesses Need to Consider When Expanding? Periods of uncertainty often place greater pressure on businesses to minimise risk and avoid costly mistakes. For organisations expanding into Australia and New Zealand, this means paying closer attention to the employment and compliance obligations that sit behind successful market entry. For overseas businesses unfamiliar with these systems, it is often the ongoing legal employment obligations, payroll requirements, workforce administration responsibilities, and compliance requirements that become underestimated. Employment contracts, payroll compliance, visa sponsorship obligations, onboarding processes, superannuation, PAYG, PAYE, KiwiSaver, and ongoing workforce administration all require local knowledge and ongoing management. For international businesses without an established presence in a market, this can create significant pressure internally across HR, payroll, finance, and operational teams, particularly when local requirements are being managed remotely. Understanding these obligations early can help businesses reduce risk, maintain compliance, and establish stronger foundations for growth. Why Are More Businesses Turning to Flexible Expansion Models? As global uncertainty continues to influence expansion strategies, businesses are increasingly looking for ways to maintain flexibility while entering new markets. This has led many organisations to explore expansion models that allow them to hire employees, test new markets, and establish a local presence without immediately committing to entity establishment or large operational structures. For businesses expanding into Australia and New Zealand, this approach can provide greater agility while reducing some of the administrative complexity associated with international growth. One model receiving increased attention is the
Introducing ANZPEO: One Name, One Website, One Clearer Identity Across Australia and New Zealand
Australia PEO and New Zealand PEO have officially launched as ANZPEO, bringing together our Employer of Record, payroll, HR and visa expertise under one regional brand across Australia and New Zealand.
Expanding into Australia and New Zealand: Where businesses most often underestimate what’s involved
Expanding into Australia or New Zealand can take several different paths. Some businesses choose to set up a local entity. Others explore remote hiring models. Increasingly, many look to Employer of Record (EOR) or Professional Employer Organisation (PEO) solutions to enter the market more quickly and with less administrative burden. At the centre of each approach is the same challenge: employment. Businesses know there are laws, obligations and compliance requirements involved in hiring overseas, and that processes need to be followed. What is less clear is how those laws actually work in practice, and how they apply to real employment situations day to day. This is where businesses tend to underestimate what is involved. Working with a locally based, on-the-ground EOR provider often brings these realities into focus early. It helps uncover the practical considerations that are not always obvious at the outset, particularly across two distinct employment markets like Australia and New Zealand. Understanding the rules is only the starting point Employment frameworks across Australia and New Zealand are well documented. It is relatively easy to find information on minimum standards, contracts and employer obligations. The complexity starts earlier than many expect, during the initial setup phase. How employees are engaged, how contracts are structured, how payroll is established and how obligations are defined from the beginning all have a direct impact on compliance. Decisions made at this stage set the foundation for everything that follows. Once employees are in place, the focus shifts to how those rules are applied in real situations. Day-to-day employment decisions rely on process, timing, documentation and an understanding of how regulators and mediators interpret actions in each market. As Fran Davies explains: “Most businesses we speak to understand there are compliance requirements. Where they often need support is in how those requirements are applied in real situations, particularly when decisions need to be made quickly.” Where underestimation tends to show up In practice, the gaps appear in common business scenarios rather than unusual ones. Managing employee performance within local frameworks If employee performance issues arise they need to be managed carefully. In Australia and New Zealand, managing those situations requires a structured and well documented approach. Steps need to be followed in the right order, with clear communication and fair process. In New Zealand, expectations around fairness and employee protection can be particularly strong, which increases the importance of handling these situations carefully. Without local guidance, businesses can move too quickly or miss critical steps, which can lead to disputes. Handling redundancy and restructuring correctly Redundancy processes are another area where detail matters. Employers need to consider consultation requirements, timing, documentation and how decisions are communicated. These elements are closely linked to employment compliance and employer responsibility. Even when a business understands that redundancy must be handled carefully, the practical execution can still create risk if not managed correctly. Having access to locally based expertise helps ensure these processes are managed in line with each market’s expectations, with the right steps taken at the right time. Meeting payroll expectations and supporting employees locally Payroll is often viewed as an operational task, but it carries significant compliance responsibility. This includes managing: Employee entitlements and leave Superannuation in Australia and KiwiSaver in New Zealand Local variations such as salary sacrifice or novated arrangements Ongoing payroll accuracy across different employment conditions Employees also expect timely, clear responses when they have questions about their pay or benefits. Providing that level of support requires local knowledge, responsive on-the-ground support, and the correct processes in place. Treating Australia and New Zealand as one market Australia and New Zealand are often approached as a combined expansion opportunity. In reality, each market has its own employment framework, expectations and regulatory approach. Australia operates within a more structured system, while New Zealand can involve more interpretation in areas such as dispute resolution. Managing both markets successfully requires an understanding of how these differences affect day-to-day employment decisions. As Fran notes: “Each market has its own expectations. Having a clear understanding of how employment works in practice across both countries makes a significant difference as a business grows.” What this means for expanding businesses The impact of underestimating these areas often traces back to decisions made during the initial setup phase. When employment structures, contracts or payroll are not set up correctly from the outset, issues rarely stay contained. As the business grows or more complex situations arise, those early decisions often need to be revisited. This can lead to rework, increased costs and duplicated effort. Internal teams may also find themselves managing unfamiliar processes while trying to maintain day to day operations. Over time, this reduces efficiency and makes it harder to manage employee matters with confidence across Australia and New Zealand. Building the right foundation from the start Addressing these challenges comes down to having the right structure in place early. For many businesses, this is where an Employer of Record (EOR) or Professional Employer Organisation (PEO) model plays an important role. It provides a framework to: Engage employees without establishing a local entity Manage employment compliance and obligations locally Ensure payroll accuracy and correct entitlements Support visa sponsorship and workforce mobility Provide consistent HR and workforce support It also creates a clear point of accountability, which simplifies decision making and allows businesses to focus on growth rather than navigating unfamiliar employment requirements. Final thought Expanding into Australia and New Zealand brings strong opportunities for growth, with several pathways available depending on how a business chooses to enter the market. Whichever approach is taken, the businesses that navigate it well focus on getting employment set up correctly from the beginning, with a clear understanding of how local requirements apply in practice across both markets. For those choosing an
What is an Employer of Record, and how will it let me hire workers in Australia?
In today’s global economy, businesses often need to expand their operations into new markets and hire talent from all over the world. However, the complexities of local employment laws, tax requirements, and compliance regulations can be daunting for companies looking to establish a presence in a new country. This is where an Employer of Record (EOR) can be a valuable partner. What is an Employer of Record (EOR)? An Employer of Record is a third-party service provider that assumes legal responsibility for employment-related activities on behalf of a company. Essentially, the EOR becomes the official Employer of Record for the company’s workers and takes on responsibilities such as payroll processing, tax withholding, benefits administration, and regulatory compliance. What are the main differences between an EOR vs PEO? Employer of Record (EOR) companies offer a range of services that are similar to those provided by Professional Employer Organisations (PEOs), including payroll processing, benefits administration, and employment management. However, the key difference between EORs and PEOs is that EORs do not establish a co-employment relationship with the employees. Instead, the EOR becomes the legal employer of the workers, with a single employment agreement that is managed by the EOR. The EOR then enters into a services agreement with the client company. How does an EOR work in Australia? For international businesses looking to hire quickly in Australia without establishing a legal entity, partnering with an Australian Employer of Record can be an ideal solution. The EOR assumes full legal responsibility as the Employer of Record for the company’s workers in Australia, allowing the company to hire and manage its employees in compliance with local laws and regulations. By partnering with an Australian EOR, businesses can focus on their core operations and growth strategies while leaving the complexities of employment compliance to the EOR. The EOR takes care of everything from payroll processing and tax withholding to employee benefits and regulatory compliance, allowing the company to save time and money on administrative tasks and focus on what matters most. Benefits of partnering with an Australian EOR Partnering with an Australian EOR can offer several benefits, including: Compliance with local laws and regulations: The Australian EOR has detailed knowledge of local employment laws and regulations, ensuring that the company is compliant with all applicable laws and regulations. Quick and efficient hiring: An Australian EOR can help the company hire and onboard employees quickly and efficiently without the need to establish a legal entity in Australia. Reduced administrative burden: The EOR takes care of all employment-related administrative tasks, allowing the company to focus on its core operations. Flexibility: The EOR can provide flexibility in terms of the duration of the employment agreement, making it easier for companies to manage their workforce. Risk management: The EOR can help mitigate risk by ensuring compliance with all applicable laws and regulations, protecting the company’s brand and reputation. How to choose the right EOR for your expansion into Australia Selecting the right Employer of Record (EOR) is essential when expanding your business into a foreign country like Australia. EORs are not a one-size-fits-all solution, and it is crucial to consider several factors before selecting the best EOR for your business. Location of operation The first consideration when choosing an EOR for expansion into Australia is to determine whether the EOR in fact does operate in Australia. It is essential to choose an EOR that owns its entities in the countries it services, as partnering with a third-party provider can lead to potential pitfalls. This can slow down everyday processes like hiring and payroll processing times and pose a security risk. Working with so-called “global EORs” means you also don’t have the benefit of a provider that has boots on the ground – these larger outfits tend to have less experience in local employment law and can Data and information protection Your EOR will work with sensitive corporate information, so it is vital to ensure they have the appropriate data protections in place to safeguard your confidential information. It is advisable to select an EOR that automates common HR and IT tasks such as onboarding and benefits enrollment to save you time and effort. Support model When choosing an EOR, it is crucial to consider their support model, not just for your internal teams but also for your employees on the ground in Australia. Ensure that your EOR has support staff that is easy to contact and experts in the regulations of Australian employment law. It is also essential to consider whether an EOR makes financial sense for your business. For instance, businesses with a substantial presence in the country may prefer to establish a business entity in the country rather than use an EOR. Cost The cost of using an EOR depends on several factors, including the number of employees you employ through the EOR, the services you require, and the EOR’s pricing structure. EORs typically use one of two pricing structures: a fixed monthly fee per employee or a percentage of payroll plus applicable taxes. Be sure to fully understand your contract and the total cost of working with the EOR before signing. An Employer of Record can be a valuable partner for international businesses looking to expand into the Australian market and hire talent quickly and efficiently. By partnering with an Australian EOR, businesses can ensure compliance with local employment laws and regulations, reduce administrative burden, and focus on their core operations and growth strategies. Contact an ANZPEO today to learn more about how we can help your business thrive in Australia.
How PEOs can assist in resolving workplace conflicts
As a business owner or manager, managing employee relations and resolving workplace conflicts can be a time-consuming and challenging task. These issues can affect not only the morale and productivity of your employees but also the overall success of your business. This is where a Professional Employer Organisation (PEO) can provide valuable support. First, what is a Professional Employer Organisation (PEO)? A Professional Employer Organisation (PEO) such as ANZPEO is a company that provides outsourced human resources services to businesses. A PEO acts as a Employer of Record, taking on responsibilities such as payroll processing, employee benefits administration, HR compliance, and worker’s compensation coverage. A PEO is a strategic partner that can help you effectively manage employee relations and resolve workplace conflicts by providing various HR services, including conflict resolution and employee relations management. By outsourcing HR responsibilities to a PEO, businesses can focus on their core operations while ensuring that their employees are well taken care of. Workplace disputes and conflicts can take many forms, but some common examples include: Interpersonal conflict between employees or between an employee and a supervisor Disagreements over workload distribution or job responsibilities Conflicts related to unequal treatment or discrimination Issues surrounding pay or benefits Disputes over harassment or bullying in the workplace Conflicts over work schedules or time off requests Differences in opinions or misunderstandings over company policies or procedures Disputes involving intellectual property or confidentiality Conflict arising from changes in the workplace, such as reorganisation or layoffs Disagreements over the implementation of new technologies or processes It’s important to address workplace conflicts promptly and effectively to maintain a positive work environment and minimise the impact on productivity. How has the prevalence of remote work impacted workplace conflicts? The increased prevalence of remote work due to the COVID-19 pandemic has impacted the frequency and nature of workplace disputes and conflicts. Remote work can affect workplace disputes and conflicts in several ways: Communication breakdowns: One of the biggest challenges with remote work is maintaining clear and consistent communication. This can lead to misunderstandings, misinterpretations, and a lack of clarity about expectations and responsibilities. Isolation and lack of collaboration: Remote work can make it more difficult for employees to work together as a team and to build strong working relationships. This can lead to feelings of isolation, lack of trust, and decreased collaboration, all of which can contribute to workplace disputes. Difficulty in enforcing policies and procedures: It can be more challenging to enforce workplace policies and procedures in a remote work environment. For example, it can be harder to monitor attendance or ensure that employees adhere to company protocols. Blurred boundaries between work and personal life: Remote work can also blur the boundaries between work and personal life, which can lead to conflicts over time management and work-life balance. Technical difficulties: Technical difficulties, such as connectivity issues or problems with software and tools, can also lead to disputes and conflicts in a remote work environment. It is important for organisations to be proactive in addressing the unique challenges of remote work and to have clear protocols and resources in place for employees to communicate, collaborate, and resolve disputes effectively. Here are some ways a PEO can assist in resolving workplace conflicts and maintaining a positive work environment. Expertise and Experience: PEOs have extensive knowledge and experience in the area of employee relations and conflict resolution. Their team of HR experts are equipped with the necessary tools and resources to manage any workplace issue that may arise effectively. They can provide advice and guidance to managers and employees to resolve conflicts before they escalate and also help in developing policies and procedures to prevent similar situations from occurring in the future. PEOs can provide your company with comprehensive employee handbooks and policies that clearly outline the expectations and responsibilities of employees. This helps in preventing conflicts from arising in the first place. Confidentiality: PEOs understand the importance of maintaining confidentiality in the workplace, and they are trained to handle sensitive issues with care and discretion. They can help mediate disputes, provide impartial guidance, and help both parties reach a resolution that is satisfactory to all parties involved. This can help to maintain a positive work environment and prevent the spread of negativity among employees. Employee Training and Development: In addition to providing expert advice and guidance, PEOs can also provide training and development opportunities for employees to help them understand and manage conflict in the workplace. This can include workshops, training sessions, and other resources designed to help employees develop the skills they need to resolve conflicts and maintain a positive work environment. Legal Expertise: PEOs have a wealth of knowledge about employment laws and regulations, which can be invaluable in resolving workplace conflicts. They can provide guidance to your company on the best course of action and ensure that your company stays compliant with all relevant laws. In conclusion, partnering with a PEO like ANZPEO can help companies effectively manage employee relations and resolve workplace conflicts. With their expertise, experience, confidentiality, and training and development resources, PEOs can provide valuable support to companies of all sizes, helping to maintain a positive work environment and keep the focus on business growth and success. More information on effectively resolving workplace conflicts in Australia can be found on the Australian Fair Work Ombudsman’s website. If you’re looking for a PEO in Australia that can help you manage employee relations and resolve workplace conflicts, look no further than ANZPEO. Contact us today to learn how hiring skilled workers through ANZPEO will ensure your workers are provided valuable support throughout their entire tenure.
Creating an Employee Value Proposition that will captivate Australia’s skilled workers
A little while ago, we published an article about the current challenges many Australian businesses are facing in sourcing and hiring top talent. As the country experiences its lowest population growth in three decades, companies are staring down the barrel of widespread skills shortages, record-high wage growth and employment levels, and high demand for goods and services for years to come. Labour shortages have plunged Australia into a candidate-driven market, giving job seekers the upper hand in deciding what roles they consider going for and under what circumstances. Top skilled workers have the luxury of choice when it comes to negotiating better pay and company benefits like flexible working conditions and health insurance. Companies that wish to attract and retain top skilled workers in Australia must consider what it is they value most, and what they look for, in their ideal role. Recognising and acknowledging these values in job descriptions and interviews will ensure businesses attract the most suitable candidates to their open roles. What are candidates looking for in their ideal role in 2023? According to Randstad’s report 2022 Employer Brand Research, salary is no longer the biggest motivator when it comes to choosing a role or changing jobs. 62% of candidates say they want work-life balance in their next role, with 58% saying they want a better salary and benefits, followed by job security (56%), job training (53%) and work atmosphere (51%). According to Seek.com, the top three drivers for candidates in their job hunt align with Maslow’s hierarchy of needs and have largely remained the same for over ten years; salary (survival), work-life balance (connection) and career development (self-growth and development). What’s interesting about this finding is that the top drivers are all about them, not the company. So, while it’s important to address factors like company reputation and culture, candidates will mostly resonate with the areas of an EVP that speak to their individual values. Work-life balance is no longer a “nice to have” aspect of a role but an expectation and, in many cases, a requirement. As workers are expected to meet increasingly tight deadlines and hit targets, they’re working longer hours and taking on responsibilities outside their scope of work. Those with young families who want to return to work also want the flexibility to maintain family life. They want to get the work done in an arrangement that works for them. If it’s work-life balance that candidates are valuing in today’s market, then this will come at an advantage for Australia employers that are feeling the crunch from dwindling revenue in a challenging economy. Companies can now negotiate on terms other than salary. Companies that offer hybrid working conditions (part working from home, part working in office), fully remote conditions and/or flexible working hours can also cast the net wider in their hunt for candidates. Instead of limiting their search to the city they’re headquartered, they can look to regional towns and even overseas. How to create an Employee Value Proposition that will captivate Australia Skilled Workers So how do Australian businesses create an Employee Value Proposition (EVP) that will win over the right candidates? Understanding what candidates want from an employer, and acknowledging these values in their EVP, will help Australian businesses capture the attention of top skilled workers that will help meet their business needs. What is an Employee Value Proposition (EVP): An EVP is a company statement that communicates the unique benefits of your company to prospective employees. It usually covers your company values and culture, as well as things like remuneration, benefits and company perks. It outlines why your organisation is the ideal place for your ideal candidates. According to Vervoe, companies that deliver on an EVP see a 70% decrease in employee turnover and an almost 30% increase in new hire commitment. Although your EVP communicates to candidates and employees what they’ll get in return for working at your organisation, it’s not the same thing as your employer brand, which encompasses the reputation the wider world, not just employees and potential employees, has for your organisation. Your EVP can be as short or as long as it needs to be, so long as it highlights all of the critical elements it needs to include and what’s most important to attract the right candidates. For an EVP that captivates Australian workers in 2023, consider the following: Worklife balance: what factors within your organisation promote a healthy work-life balance? Do you enable your employees to work from home part- or full-time? Do you allow them to choose their own working hours within reason? Part of Hubspot’s EVP encompasses a statement on how they offer unlimited vacation, fully remote work, a five-year sabbatical and parental leave, along with a raft of company perks. They promise to “help you be the best “you” that you can be”. Remuneration: outline how/if you can meet your employees’ salary expectations and include additional rewards such as bonuses, travel allowances and additional paid leave. Also, consider whether or not their salary will be increased periodically – say, by 5% every 12 months – and under what circumstances. Job security: Your EVP should encompass all the ways in which your organisation will protect its employees from layoffs, economic downfalls and other factors that could impact employment. Does your organisation prioritise future-minded leadership? Does it encourage learning and development or have a no-redundancy policy? Career development: include the opportunities you offer employees to further their careers, develop their skills and train them in new areas. This is where you’ll include learning and development efforts such as Professional Development Plans, mentoring and coaching, educational allowances and so on. Affiliation/reputation: skilled professionals don’t want to be associated with a weak brand, poor business performance or Corporate Social Responsibility record. In this section, consider factors like your corporate values, wider reputation, the quality of your product and/or service, growth objectives and position in the marketplace. How your organisation impacts its people and the wider community is a key consideration for
Employer of Record Australia | How to hire workers in Australia remotely
Expanding your business into Australia from countries like the US or UK can be a great way to penetrate the Asia-Pacific market. However, hiring skilled workers on the ground can be challenging without a local entity in Australia and strong knowledge of Australian employment law and compliance. As an international business, there are two options for hiring workers in Australia: Set up a physical entity in Australia to legally hire workers The first and most obvious option for hiring workers is the conventional way; setting up a legal entity in Australia, giving you rights to employ workers in the country. According to the Australian Securities and Investment Commission (ASIC), the legal requirements to set up a physical entity in Australia are as follows: Establish and register a physical office space, place of business and directors Create and manage a business name Keep ASIC informed of key changes Maintain up-to-date financial records Pay relevant fees to ASIC Create and monitor annual statements Engage a trusted legal team to assist in understanding compliance and Australian employment law. For example, suppose a gaming company, let’s call them Radical Gaming, wanted to hire a Software Engineer in Australia the conventional way. In that case, they’d need first to establish a physical office in Australia to then create the legal entity that enables them to employ workers in the country. They would then need to hire a board of directors, create and manage their selected business name and pay relevant ongoing fees to ASIC. This process alone can take months or even years. Engage an Employer of Record to hire workers on your behalf. What is an employer of record? An employer of record (EOR) is a company that acts as the legal employer of workers on behalf of another company for tax purposes. In an EOR employment arrangement, while the employee is technically hired by the EOR, the worker performs work for the other company. EOR services like ANZPEO take on the responsibility of various administrative tasks, from visa and sponsorship to onboarding and payroll. The end company will manage the employee directly. What are the benefits of engaging an employer of record company? When you work with an EOR, you don’t have to familiarise yourself with complex Australian labour law, or other administrative functions like onboarding and payroll. Once you’ve recruited your employee, an EOR like ANZPEO can have your new worker onboarded and ready to start within 24 hours, giving you more flexibility to concentrate on your broader growth strategy and team management. By far, the most significant advantage of engaging an EOR company like ANZPEO is the ability to expand into Australia very quickly and without establishing a local entity. So if the same company, Radical Gaming, had sourced a Software Engineer in Australia, ANZPEO (or the EOR) would onboard and hire them on Radical Gaming’s behalf, becoming the legal employer of record for the engineer. ANZPEO would manage payroll and benefits and offer ongoing HR support for this engineer while they report to and perform tasks for Radical Gaming. Companies that hire skilled workers in Australia through an Australia EOR reap the benefits Hire remote skilled workers in Australia without the hassle: you source your ideal candidate, and we become the employer of record for your Australia-based worker, eliminating the need to set up a legal entity in the country. Fast onboarding: We’ll have your skilled worker signed on and working in as little as 24 hours. Remote HR functions: ANZPEO takes on several administrative tasks from payroll to legal matters, leave entitlements and employee support. Contingent workers benefit from an EOR arrangement too. Contingent – or co-employed – workers are also exposed to several advantages of being employed under an EOR agreement. Accurate payment on time: as experts in Australian labour laws and entitlements, ANZPEO will ensure your workers have their wages paid on time and accurately. Support on the ground: As the only Australia-based EOR for skilled workers in Australia, your company and skilled workers will have access to round-the-clock support from our dedicated Account Management team. Workplace rights protected: When expanding into a different country, you’re legally required to abide by the local employment laws. Employing workers through an Australian EOR such as ANZPEO means your workers can rest assured knowing their workplace rights are being protected. How much does it cost to hire skilled workers in Australia? List most developed countries, there are a number of additional costs of hiring workers in Australia, on top of salary. Firstly employers must pay contributions into an employee’s mandatory superannuation fund (the equivalent to 401K in the US). These amount to 10.5% of the employee’s annual salary. They’re also required to pay around 2% of their salary for workers’ compensation (depending on the policy), 5.45% in payroll tax and – in some cases – 17.5% annual leave loading. For a skilled worker earning a base salary of $120,000, an employer can expect to pay an additional $12,600 in superannuation contributions, $2,400 in workers’ compensation, $6,540 in payroll taxes, and, where applicable, $21,000 in annual leave loading—bringing the total additional costs to $42,540. Would you like to hire workers remotely through an Employer of Record, such as ANZPEO? Our dedicated employment team is based in Australia and ready to assist in employing your ideal candidate. Reach out today.
Employee vs. contractor: which is better for PEO arrangements?
For international businesses wanting to recruit workers in Australia, determining whether or not to hire them on a contract or permanent basis can have a significant impact on their business. A PEO agreement is a unique arrangement that allows international companies to hire workers in countries like Australia without them having to establish a local entity. With this comes certain nuances that need to be acknowledged when deciding whether to hire permanently or on a contract basis. Often, the lines between employer and contractor can be blurred, as both have subtle differences in how agreements are drawn up and work is undertaken. Generally speaking, the key differences are: Contractors and subcontractors are third-party operators that run their own businesses, whether that be as a freelancer or sole trader. They offer their specialised services to an array of businesses and business sizes and use their own processes, internal tools and strategies to complete the tasks their clients require. Permanent employees work within a business they don’t own. They generally don’t have jurisdiction over when, how, where, or why they complete the tasks assigned to them. Breaking it down, the difference between permanent employees and contractors looks like this: Permanent employees Contractors Fixed annual salaries Paid regularly, based on an agreed hourly or daily basis Employed on an ongoing basis Fixed contract length that can vary from weeks to years. General business tasks and project/campaign work. Primarily project-based for fixed deliverables Leave entitlements (annual leave, personal/sick leave etc.) No leave entitlements Employer pays tax on worker’s behalf Contractor manages their own tax and other deductions (or outsources to third-party accountants). Training is provided to fill skill and experience gaps Usually no training providing and hired for their specialist skills Contractor vs. permanent employee – why is proper classification so important? When deciding whether or not to employ a permanent worker or outsource to a third-party contractor in Australia, there are certain legal obligations you need to be aware of. If you don’t classify your workers accurately, you could be in breach of Australia’s employment law. Classifications affect workers’ tax, super and obligations, and you could be penalised for classifying them incorrectly. When a business treats its employees as if they’re contractors, it could be liable for penalties and charges in accordance with Australian employment law. If the Australian Taxation Office catches wind that you’ve improperly classified your staff, you’ll be up for penalties. You’ll have to pay a fine for not deducting tax from your employer as well as super guarantee charges consisting of back payment of your employee’s superannuation contributions, interest and admin fees. According to the Australian Taxation Office (ATO), there is a specific set of workers who are always permanent employees. These include apprentices, trainees, labourers and trade assistants. When you work with PEOs, labour hire or other on-hire arrangements, your business pays the firm, who then pays your worker a salary, pay-as-you-go (PAYG) tax withholding to the ATO, super and fringe benefits tax obligations. For all such arrangements, employing your workers permanently is essential. A full comparison of how the ATO determines permanent employees compared with contractors can be found here. Why hire permanently? While there are some advantages of hiring contractors over permanent employees – flexibility and agility being two – hiring people permanently has far more advantages, particularly when hiring workers remotely by engaging with a professional employment organisation such as ANZPEO. Stability Permanent jobs offer a level of stability that makes them more appealing for professionals, particularly those in specialist professions. When hiring overseas, securing specialist staff can be challenging. Once contracts are signed, specialists are bound by certain law that ensures they don’t leave their employer in the lurch. They are legally obligated to give their employer notice of resignation as set out in their employment agreement. Often this is one month notice. When hiring permanent workers in Australia through a PEO, you also benefit from their skills long-term. It’s stable for the worker and equally stable for your business and teams. Employee career development With permanent employees, companies have more scope to invest in role development and career progression. Eventually, these same employees can work their way up the ranks within the business and take on future leadership roles – they become irreplaceable members of the company and play a key role in your business’s growth. Retention In return for job longevity, companies should expect their retention rates to remain high and their highly skilled professionals to remain in the business. One added benefit of increased retention is minimising staff training. A 2021 study from the HR Industry Benchmark Survey Australia and New Zealand found that the true cost to hire and train new staff is about AU$23,000. It takes an average of 41 days to fill roles, sometimes longer when recruiting for specialist roles. Loyalty Permanent workers also tend to be more passionate, loyal and involved in the success of a business than contractors, who – as external stakeholders – are more detached from the day-to-day triumphs and challenges of a business. They’re more likely to immerse themselves in company culture and social events, unlike contractors who work more independently and come and go. Collaboration Collaboration can be more challenging for workers in PEO arrangements where employees work remotely. Permanent arrangements make it easier for teams to mesh and form solid and collaborative relationships virtually. The benefits of a permanent role are unsurmountable for employees too. Particularly for workers hired through a professional employment organisation, job stability is an essential aspect when there is often no local office as a company base in the country. Unlike contractors, permanent employees are entitled to personal leave (10 working days a year) and holiday leave (20 working days a year). They have their superannuation and PAYG tax contributions made by the employer on their behalf. Many permanent roles also offer benefits like parental leave packages, gym memberships and health insurance that are otherwise not offered to contracted workers for the same businesses. When
What are the average Australia salaries for skilled workers?
Australia is well known for its strong economy, but the cost of living, particularly in 2022, when inflation is wreaking havoc on society, is very high compared with other countries. Skilled workers, who generally possess tertiary degrees and are more professionally experienced, must be paid a fair wage that reflects their skills, experience, and cost of living. Companies that do not offer their candidates a fair salary will not attract the best talent to take on their roles. If they do, employees are much more likely to shop for a better-paying position sooner. Identifying what fair and reasonable salaries are for your skilled workers can be a challenge, particularly when you’re hiring through a professional employment organisation from a country such as the US or UK. How do Australian salaries compare to the rest of the world? In a report by the Organisation for Economic Co-operation and Development, Australia has the 9th highest average wage globally, sitting at 30% above the world average. As of 2019, the average income earner was taking home around $USD58,000, compared to $US44,000 in the US. The local average salary in Australia is also above that of the UK, Canada and New Zealand. For skilled workers in Australia, however, it varies. They tend to be higher in most professions in the UK but lower than the average salaries for skilled workers in the US. A study conducted by Outsource Accelerator compared the difference in salaries for high-skill roles in Australia, the United States and the UK. All figures indicate annual salary in USD. Role USA UK Australia HR Managers $78,007 $46,669 $66,518 Software Developer $81,994 $39,913 $62,653 Software Engineer $109,087 $44,459 $62,653 Team Leader $75,823 $31,174 $45,428 Senior Project Manager (12+ years’ exp.) $102,318 $80,343 $107,890 Program director (12+ years’ exp.) $69,508 $94,623 $145,972 Accountant $67,190 $72,923 $58,479 Accounting supervisor $79,408 $48,529 $60,195 Labour shortages and increased cost of living have driven wage growth Things have changed a lot since the pandemic. This year’s Skills and Jobs Summit addressed the key economic challenges in Australia today, namely the labour shortage that is driving unemployment down (currently at 3.4%). However, labour shortages typically drive wage growth up, forcing corporations to offer further incentives in the hope of attracting top talent. Short talent supply for skilled jobs in Australia over the last 12 months has forced pressure on several industries and jobs, leading to this sharp increase in pay rises. The Australian Bureau of Statistics announced a 2.6% annual rate of wage growth “after three-quarters of consistent wage growth, driven mostly by wage rises across the private sector,” says Michelle Marquardt, head of Prices Statistics at the ABS. To combat this rapid wage growth, the Australian government has announced key initiatives that aim to promote greater participation in the workforce, for example, encouraging more skilled migrants to acquire 482 visas by increasing the annual immigration intake from 160,000-195,000. How do employee entitlements compare between the UK, US and Australia? Like most countries, employers of Australian workers must also consider employee entitlements to be paid on top of salaries. Such entitlements differ to those of the US and UK. United States Unlike Australia, paid sick leave and paid annual leave are not compulsory offerings under federal US law. However, many states have mandated paid sick leave and many companies offer paid annual leave at their discretion. US companies are required to cover 6.2% of their employees’ salary for social security, 1.45% for Medicare, as well as state and federal taxes. In some instances, large US corporations that do not offer health insurance to their employees are subject to penalties. Employers are not legally obligated to provide pensions or retirement benefits for their employees, though many do provide them with retirement savings plans that contribute to their 401k. United Kingdom In the UK, full-time permanent workers are entitled to 4 weeks (20 working days) per year of paid annual leave and eight days for paid public holidays. Paid sick leave is not mandatory, but some companies might offer a paid sick leave scheme. An additional 8% of a UK employee’s wage must be paid to their pension scheme. Australia In Australia, all full-time permanent workers, regardless of income, are entitled to 20 days (four working weeks) of paid annual leave. For some professions, they’re also entitled to annual leave loading of 17.5% on top of their wage. In addition, workers get ten working days of personal leave per year, which covers sick days and carers’ leave. Both annual and personal leave are accrued pro-rata, but only annual leave gets paid out if not taken. The number of paid public holidays varies from state to state. In New South Wales there are 11, in Queensland there are 9, and in Victoria there are 13. By law, all employers in Australia must also contribute an additional 9.5% of their employees’ salaries to their nominated superannuation fund (equivalent to the 401k plan in the US) Paying your Australian skilled workers an adequate salary will not only ensure they’re able to afford the cost of everyday living, but it will also make your company a secure and fair place to work. Looking to hire workers in Australia? Speak to ANZPEO about how to remunerate your skilled workers correctly and according to their skills, experience and profession.
How does PEO pricing work in Australia?
When it comes to PEO pricing in Australia, there are a number of variables. Take a look at some of the factors that influence the cost of using a PEO, plus information about how much PEOs charge in Australia and what you can expect in return for your investment with this type of organisation. PEO cost variables and structure The cost of your Australian PEO will depend on a few things, including: – Your company’s size – How much you pay your workers – Workers’ compensation risks – Employee benefits – Payment structure Some PEOs calculate their fee as a percentage of your payroll. Others charge a flat fee per employee. If you use a percentage structure, bonuses and commissions may cause fluctuations in the cost. The percentage could be anywhere from 2-12 per cent of wages, depending on the number of employees you have and their salaries. If your team receives stable wages, using a percentage model may make sense. With the flat, per-head fee structure, it doesn’t matter if an employee makes $30,000 or $1,000,000 annually – your PEO costs stay the same. Some businesses prefer this model, particularly when they have a number of people on a higher salary. You can expect to pay anywhere from a few hundred dollars to a few thousand per employee. The price will be influenced by the number of people on your team, the level of management they need and the money they earn. When it comes to Worker’s Compensation, if your people are working in a high-risk industry, there is more likelihood of complicated claims. This is why your PEO pricing might be slightly higher. There may be additional fees for extra services which are not included in your overall agreement. Your PEO should explain these before you sign your contract (ask about added extras as part of your negotiations). When you recruit a PEO, as well as asking about pricing, don’t forget to discuss termination costs. You don’t want to get stung with a hidden expense that you weren’t expecting. What you get PEO pricing in Australia generally covers the following services: – Handling of employee benefits – Recruitment of new hires – Employee administration (such as issuing handbooks and sharing training modules) – Compliance with industrial relations standards – Handing of compensation claims – Payroll requirements – Distributing employee benefits – Liaising with employees about payroll and HR-related matters Why hire a PEO to oversee your business in Australia? When asking the question “how much do PEOs charge in Australia?” you should also think about how much money a PEO can save your business. Installing a locally-based provider to oversee elements like onboarding, HR and payroll can save you for the following reasons: – You’ll have someone on your team who understands local employment laws – Your team’s administrative tasks are reduced – You won’t have to train someone on your team or expect them to understand the complexities of hiring people in Australia – You’ll avoid litigation caused by a lack of understanding of Australian workplace relations – Your Australian team will have a point of contact in their own time zone – The ‘email chain’ is reduced between your Australian-based employees and their point of contact – You can rely on your PEO to help you rapidly establish a presence in Australia, whether you are there or not – You don’t have to pay for a full time headcount – You are your team are able to focus on your core business According to a study shared by NAPEO, “the average cost savings from using a PEO is $1,775 per year per employee, while the average PEO cost per employee is $1,395, yielding an annual ROI of 27.2 per cent.” Not all PEOs are the same Not every PEO provides the same value or cost structure. You need to speak to two or three different providers so you can understand which one will give you the best value. The ideal PEO will create cost efficiencies that suit your business so you can develop a mutually beneficial partnership. Looking for a PEO in Australia? Wondering how much it costs? Speak to ANZPEO today.