Finance leaders say they're ready to hire globally, but many still view compliance as an expensive barrier to expansion.
Every CFO surveyed in new research from workforce solutions provider Safeguard Global estimated their organization had lost money due to compliance risk while expanding internationally. More than one in five respondents estimated those losses exceeded $1 million.
The findings are based on a survey of 400 CFOs in the U.K. and U.S. conducted by Censuswide on behalf of Safeguard Global from June 5-12.
While the report describes the findings as losses from "noncompliance," Safeguard Global told CFO.com in a follow-up email that respondents were asked a different question: "How much money, if any, do you estimate to have lost to compliance risk when expanding globally?" Respondents selected from predefined ranges, and the reported losses were self-estimated rather than verified financial results, the spokesperson said.
Despite those estimated losses, confidence in international hiring remains high. Nearly all respondents (97%) said they are interested in hiring globally, while 96% believe their organizations are prepared to do so. Yet only 22% said their companies plan to hire internationally within the next six months, highlighting what the report describes as a disconnect between confidence and action.
Compliance carries a financial cost
No respondent selected "none" when asked to estimate losses tied to compliance risk during global expansion, according to Safeguard Global.
A SafeGuard spokesperson also told CFO.com that 5% estimated losses below $10,000. Another 27% estimated losses between $10,000 and $99,999, while 47% reported losses between $100,000 and $999,999. Twenty-two percent estimated compliance-related losses of at least $1 million.
The report notes that compliance failures can lead to fines, back payment of wages, statutory benefits, taxes and reputational damage, although respondents were asked only to estimate losses tied to compliance risk rather than identify specific cost categories.
The survey also suggests those financial risks have become a meaningful consideration as finance leaders weigh international expansion. Nearly four in five CFOs (79%) identified cost savings as more important than access to talent when evaluating global hiring.
Confidence meets growing caution
The survey also found that enthusiasm for international hiring has not translated into immediate expansion plans, and geopolitical uncertainty appears to be one reason.
Forty percent of CFOs said geopolitical disruption has made their organizations more cautious about hiring internationally, while 38% said it has hindered their ability to expand globally. Nearly one in five respondents said their companies relocated an employee to another country during the past year because of geopolitical conflict.
Safeguard Global CFO Florence Cazemajou-Flint said finance leaders remain confident in their ability to hire internationally but often underestimate the operational complexity involved.
"The challenges CFOs face in managing global hiring — from both inside and outside their organizations — are only becoming more complex," Cazemajou-Flint said in the report. "While they’re confident in their ability to manage cross-border hiring and capitalize on global opportunities, many may underestimate the resources needed to navigate the realities of international employment."
Operational hurdles remain
The survey also explored the practical challenges companies encounter when hiring across borders. Respondents identified making a first hire in a new country as one of the most difficult aspects of international expansion.
Other leading challenges included testing hiring in a new market before deciding whether to expand there, managing workforce changes tied to acquisitions or restructurings, supporting short-term, project-based or seasonal hiring across countries and reviewing overseas employment arrangements due to compliance concerns.
When asked what would improve their ability to manage global hiring, CFOs most frequently cited support with local employment contracts, payroll and benefits administration, access to country-specific compliance guidance and faster onboarding timelines.
The findings also highlight the limits of applying headquarters-designed employment policies across multiple areas. Expanding internationally often requires adapting payroll, contracts, benefits and compliance processes to local laws rather than relying on a standardized approach developed at corporate headquarters. And, according to Safeguard Global data, every global expansion incurs compliance-related issues that with proper planning, may be have been avoidable.
