The Executive Suite: Take advantage of the global talent pool without setting up an offshore subsidiary

The U.S. healthcare labor market is in crisis. Labor shortages are expected to continue for the next 5 to 10 years as a result of the pandemic.

Taking the hardest hit: positions at the low end of the wage spectrum. It’s predicted that 6.5 million employees will permanently leave their positions by 2026 with only 1.9 million people replacing them.

To counter the labor shortage, more and more healthcare companies are starting to take advantage of the global talent pool. Access to global talent enables companies to broaden their talent search, build business continuity across geographies, and shift cost structures.

Critical to the successful use of the global talent pool is deciding on a hiring model that makes the most sense for your organizational goals. Here are four of the most common ways companies are mobilizing global staff, along with some of their strengths and weaknesses.

1. Hiring freelancers

Freelance websites like Upwork and Fivver are now incredibly common. Their appeal is giving companies access to a global talent marketplace when searching for employees—whether part-time or full-time—that can immediately fulfill their needs. Freelance websites are great for small businesses with a small or niche need, however, become challenging at scale.

Services covered: None other than a provided talent marketplace

Strengths: Access to Global Talent
Ability to start at a small scale easily and cost-effectively

Weaknesses:

Lack of visibility and control:How do you know if the person you hired is working or performing? Are they helping multiple clients with different accounts?
Compliance: No one is ensuring that your employee is keeping up with local tax laws or compliance.
IT Support: If blackouts or outages occur, no support is provided to get your employee back online.
High management cost: How much is your time worth? $100/hr.? $1000/hr.? Ultimately, you are wholly responsible for the management of the employee, thus you own the management cost.
Turnover risk: In a freelance marketplace model, it is difficult to retain employees as they can bounce around to different clients and jobs whenever they see fit.

2. International Professional Employer Organization (PEO) or Employer of Record

International PEOs do the same things that a local PEO would do, except in a different country. These organizations make it easy for companies to be compliant with local laws when hiring globally. They do not, however, help with management, recruiting, and other things that make global teams successful.

Services covered: Payroll, tax, insurance, compliance, and benefits administration.

Strengths:Access to the global talent pool
Ability to start at small scale
Scalable
100% compliance
Flexibility, visibility, and control of employees

Weaknesses: High Training and Management cost: In this model, 100% of the training and management of the employees is on you and your team, thus requiring high cost and high effort.
Recruiting: The recruitment process is 100% on you. This can be really challenging for companies that lack a physical presence in the place of hiring.
IT Support: Like the freelance model, IT support management is not possible without a physical site or available remote technical support.
Turnover Risks: As mentioned, turnover is difficult because it is solely managed by you and your team. No support or assistance is available in this model to help manage this and make it easier for you and your team.

3. Traditional Outsourcing

In a traditional outsourcing model, the vendor performs a service for the end customer. Services in a traditional outsourcing model include things such as medical billing, medical coding, eligibility verification, bookkeeping, and customer support. This model is incredibly common with its low effort. This model, however, has a bad reputation because of its lack of control, visibility, and flexibility.

Services covered: Payroll, tax, insurance, compliance, benefits administration, recruiting, management, facilities, IT Support, Turnover Management

Strengths Access to global talent

Compliance
Low Effort
Vendor Manages Turnover
IT and Facilities Support

Weaknesses Requires scale: Traditional outsourcing relationships require companies to start at a certain scale for it to work. This can make it prohibitive for small to mid-sized businesses and startups.
Long-Term Contracts: Most traditional outsourcing contracts are 1–2-year commitments and are rigid in nature.
Lack of visibility, control, and flexibility: There is no insight into who is performing the work and how it is being done. There’s high-level account management, but it’s difficult to have insight into how efficient the service really is.
Quality Control: In this model, there is high-level quality control, but for most clients, the outcomes are less than ideal.

4. Co-sourcing

Co-sourcing is a modern spin on traditional outsourcing. It can even be thought of as an International PEO service, with just a little bit extra. Co-sourcing was created to address the pain points in both traditional outsourcing and International PEO models. Co-sourcing is the closest companies can get to creating their own offshore subsidiary at a scale that makes sense for them. In a co-sourcing approach, we help healthcare organizations hire dedicated medical billing specialists, nurses, accountants, reporting analysts, patient support personnel, and more.

Services covered: Payroll, tax, insurance, compliance, and benefits administration, IT support, HR, recruiting, co-management support, facilities, turnover co-management

Strengths: Access to global talent

Ability to start at any scale
Maximum control, visibility, and flexibility
Easily scalable
Some of the management cost is shifted
IT and facilities support
Co-management to help ensure success
Month to month, flexible contracts

Weaknesses:I nitial training and management involvement: In this model, there is more involvement required from the client at the start to ensure success.
Turnover risks: Turnover is still a felt challenge for the client in this model. It is alleviated because of vendor support but it still exists.

The use of global talent is shaping the way healthcare companies hire and retain the employees they need to succeed. The four methods discussed will help different company types and sizes have success in combating the labor shortage.