Rising budget constraints and economic uncertainty have caused many companies to rethink their strategies before hiring new employees. However, rather than placing a freeze on recruitment drives or cutting costs elsewhere, many organizations have found they can take advantage of the unprecedented opportunities that have arisen in the labor market during the last two years.
As huge numbers of the global workforce were forced to set up offices from home, the rise of remote working practices during the COVID-19 pandemic signaled a permanent switch to remote, hybrid, and other flexible working models. With such ‘new normal’ working arrangements, employers now have greater opportunities to hire employees in parts of the world where the cost of living is lower enabling them to benefit from lower labor costs as well as new pools of talent.
Remote work is just one of the ways businesses are able to benefit from global labor arbitrage practices. This article will discuss global labor arbitrage further and see how it can benefit your company.
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What is global labor arbitrage?
How can your company benefit from global labor arbitrage?
Below are some of the ways your company can benefit from global labor arbitrage:
How can a global employer of record enable labor arbitrage?
Frequently asked questions
It is an arbitrage as the purchaser of the labor is benefiting from the differential in wages/salaries in different countries.
Not necessarily. For example, hiring contractors rather than employees can sometimes be an effective labor arbitrage when hiring domestically.