As China’s economy grows, numerous Chinese companies are actively expanding their global operations. According to a report from the Ministry of Commerce, in 2022, the number of overseas employees of Chinese enterprises exceeded 4.1 million, which is a move in line with the trend of regionalization. However, when Chinese companies conduct business in a brand new market, they often encounter challenges in labor management and legal aspects during the operational stage, such as tax compliance, labor disputes, and salary payments. If they do not conduct preliminary research or take preventive measures, it may lead to significant risks or losses. To this end, our magazine specially invited Mr. Lin Tan, CEO of PayInOne, to hear his in-depth analysis of how Chinese companies going abroad can cope with challenges in legal, management, and cultural aspects, and how to provide escort services for these companies through the PayInOne platform.
Reporter: Under the background of upgrading global employment needs, what challenges does the traditional employment model face?
Lin Tan: Whether it is a company going abroad for the first time or one that has been deeply involved in overseas markets for a long time, they will all face certain challenges. These challenges are mainly concentrated in the following three aspects:
Legal challenges: In some foreign countries, labor laws and regulations are quite strict, with detailed regulations on employment relationships, wages and benefits, working hours and many other aspects. In addition, the governments of these countries attach great importance to the protection of the rights and interests of foreign employees. For companies going abroad, this requires them to invest more energy and time to conduct in-depth research and strictly abide by local laws and regulations to avoid potential risks brought about by violations. Take a listed company in the lithium-ion battery industry as an example. They hope to quickly advance their overseas business while avoiding damage to their brand image and market influence due to violations. Therefore, they chose to cooperate with PayInOne to ensure their compliant employment operations, including salary distribution and tax compliance, to help their overseas business develop smoothly and efficiently.
Cultural challenges: Different countries have their own unique cultural backgrounds, and factors such as race, religion, and gender can all affect a company’s employment and management. A high-tech enterprise in the biotechnology industry in Shenzhen, in the course of developing overseas markets in multiple countries, chose to cooperate with us after multiple comparisons in order to avoid overseas employment becoming an obstacle to its business development. We helped them with the management of overseas employees, including simplifying the employment and taxation processes, which significantly improved the overall efficiency of their overseas operations.
Management challenges: A major challenge that companies going abroad often face overseas is cultural conflict, which brings great trouble to the management of the company. For example, locally recruited employees may be fired because they cannot meet the company’s standards in terms of work efficiency. According to our internal data, in the past year, as many as 82% of local employees needed to be adjusted or replaced due to performance issues. Some companies’ coping strategy is to select and train domestic employees and then send them abroad, but this may squeeze local employment opportunities and trigger dissatisfaction and potential conflicts.
In addition, after companies going abroad set up branches or make acquisitions locally, they often find it difficult to effectively manage local operations. Take a global leader in consumer electronics and semiconductor manufacturing as an example. Although it successfully acquired a subsidiary in Europe, it encountered a series of problems in the operation process. At the decision-making level, the subsidiary has almost complete autonomy, which may lead to difficulties for the headquarters to track business, finance, and personnel situations. The Chinese headquarters may not even be clear about how many employees there are locally. This series of difficulties will hinder the pace of enterprises expanding their overseas business.
Reporter: Despite the many challenges, under the current momentum of globalization, the pace of companies going abroad will become faster and faster. How will PayInOne use technological innovation to help companies overcome the difficulties of going abroad?
Lin Tan: PayInOne is a one-stop global team employment and management platform designed and developed specifically for Chinese companies going abroad. Through SaaS products, it provides comprehensive team employment and management solutions including employment, compliance, contract setup, signing, and salary payment. And through a platform-based approach, it connects with global resources covering legal affairs, taxation, human resources, and payment channels, lowering the threshold for cross-border employment. Our platform has independently developed several core technologies:
First, an intelligent payment engine: We can make corresponding salary payments in 180 countries and regions around the world, supporting payments in 120 mainstream global currencies, which is second to none in China.
Second, an employment risk identification engine: This is an employment risk identification engine developed based on the AI large model framework. Through this engine, multi-dimensional information such as an employee’s occupation, age, gender, education, and work experience can be comprehensively considered to gain insight into employment risks in advance and effectively avoid potential losses.
Third, a salary management system: We will combine local laws and regulations to help companies going abroad achieve automatic salary and tax calculations. The salary management system supports companies in formulating global employment plans, using technology to replace manual labor, realizing automatic statistics and accounting of salaries, reimbursements, and individual taxes, and the batch payment function can realize one-click payment of multi-currency for employees in multiple countries.
Reporter: With so many core technologies, what high-level services will PayInOne specifically bring to companies in expanding their “global footprint”?
Lin Tan: For a company, whether it is going abroad or not, the biggest problem it faces is how to reduce costs and increase efficiency. Especially for companies going abroad, when facing different countries, laws, and cultures, they need to improve efficiency and obtain greater economic benefits even more. Therefore, PayInOne will also be committed to this, escorting companies in the process of expanding their global footprint.
Reduce the management burden of companies going abroad
Through the PayInOne platform, the issues that they previously needed to discuss and argue about can be handled in a more standardized way. We will preset options on the platform and formulate standardized processes, which not only comply with some local regulations and legal rules, but also meet the requirements of companies going abroad for processes. In this way, both the company and the employees save the process of repeated communication, discussion and confirmation, greatly reducing the management burden of companies going abroad. In addition, PayInOne helps companies effectively reduce labor costs through a global salary query system and a one-stop management platform. In the past, a team of 5-10 people composed of HR, legal, and financial roles was needed to manage 100 global employees. With the help of PayInOne’s one-stop platform, now only one HR person is needed to complete it, driving an increase in the company’s internal labor efficiency by more than 5 times.
Reduce employment costs for companies going abroad
Five years ago, if a company going abroad employed employees in Europe, it had to operate through traditional service providers, and the service fee for each employee per month was about 1,000 to 2,000 US dollars. Now, through the standardized operation of the platform and the use of software for the entire process, the service fee for each employee per month has been reduced to between 300 and 500 US dollars, and the employment cost has been reduced by 3-4 times, greatly reducing the cost of global employment and allowing more companies to employ and expand their business overseas at a lower cost.
Reduce employment risks for companies going abroad
PayInOne provides several targeted solutions and avoids risks in the process from aspects such as employment model, contract setup, and salary system. The compliance content service module summarizes and sorts out employment guides for various countries for customers, including laws and regulations, policy changes, labor protection, investment policies, entry thresholds, etc.
Take a company we serve as an example. It has more than 300 member companies worldwide, and its sales network covers more than 100 countries and regions around the world. It has a large demand for global employment and its business personnel cover a wide range. However, due to differences in laws, regulations, culture and other aspects between countries, the development of its global human resources is limited and faces many challenges. PayInOne plays the role of the nominal employer of the company’s full-time overseas employees and quickly responds to its employment needs in different countries and regions. According to the business development needs of the company, PayInOne carries out targeted talent deployment and has become a “firewall” for them in preventing overseas employment risks.
Reporter: Through your introduction, we have a more intuitive understanding of PayInOne’s business process. Through your core technologies and digital platform, you can indeed help companies going abroad achieve cost reduction and efficiency improvement. It can be said that you are also the first person to try this. Can you share what inspired you to start this company in the first place?
Lin Tan: I have a computer science background. After returning to China from Silicon Valley in the United States, I have gained in-depth understanding and entrepreneurial experience in multiple fields. The global employment and salary management industry is a field that can be transformed by technology. Faced with the complex and changing environment overseas, the original management systems of domestic companies are difficult to migrate overseas. In a strange country, how to quickly get personnel in place has become a problem faced by companies. At that time, I was also looking for an entrepreneurial direction. I saw the predicament faced by companies going abroad and the growing local employment needs. This is a market that is in its early stages and a blue ocean. In this, technology-driven end-to-end management of human resources and accurate salary settlement are the core, which can greatly improve the efficiency of the industry. Therefore, with the vision of creating a brand-new global employment model and providing Chinese and even global companies with a one-stop overseas employment and salary management platform, PayInOne was born in 2021.
Reporter: What was the biggest challenge you encountered in the process of entrepreneurship?
Lin Tan: In entrepreneurship, the most difficult thing is still the development of the business and team building. In the early stages of the company’s establishment, PayInOne mainly invested its energy in product research and development, channel building, and legal compliance of various businesses.
While helping companies going abroad with human resource management, we also constantly enrich our own talent pool. Due to the asymmetry of information such as laws, culture, and language, the company may face various risks if it is not careful, and in severe cases, it may even face huge fines, directly damaging the results of business expansion. Therefore, we must have a strong technical and business team.
In the future, more small and medium-sized enterprises in China will choose to expand their business overseas, which will put forward higher requirements for the legality, compliance and cultural fit of companies’ overseas employment. PayInOne will continue to promote technological and model innovation, and provide safer and more efficient global employment support for Chinese capital to continue sailing abroad with more intelligent and open technology and more flexible and efficient models.
Source: “Human Resources” magazine
Author & Editor: Qi Xiangyu
