A staggering disconnect exists between the confidence of HR leaders and the reality of global compliance risk. New research from Remote’s 2025 Global Workforce Report reveals that while 98% of HR leaders claim to understand employment law in the countries where they operate, nearly three out of four (74%) have faced costly international compliance challenges.
The consequences of this misplaced confidence are steep: each international compliance incident costs companies an average of $42,000 globally.
As hiring globally becomes the default for talent access, this data is a wake-up call for organizations that their current compliance infrastructure is failing.
The Confidence Paradox and Global Risk
The research, which surveyed 3,650 HR and business leaders across 10 countries, highlights the scale of the exposure:
- Misplaced Confidence: 62% of UK HR leaders reported being “very confident” about their legal knowledge, yet 75% of UK firms reported compliance issues abroad.
- The Cost of Failure: Issues—ranging from labour law violations and worker misclassification to tax errors and payroll mistakes—are expensive, mounting to an average of $42,000 per incident.
- European Exposure: The problem is particularly acute in Europe, with over 80% of French and German firmsand 75% of UK firms reporting compliance problems, significantly higher than in the US (57%).
Job van der Voort, CEO and Co-founder of Remote, warns that “Confidence alone is not a compliance strategy… organizations risk costly mistakes that undermine the very benefits of going global.”
A Strategic Path to Lower Risk
The report offers clear data suggesting that the method of international engagement significantly influences compliance success:
| Global Engagement Model | Firms Reporting Compliance Issues |
| Local Entity | 52% |
| Contractors | 51% |
| Employer of Record (EOR) | 40% |
The data points to the Employer of Record (EOR) model as a significantly safer choice, as it offloads the complexity of local payroll, tax, and labour law compliance to an expert third party, dramatically reducing organizational risk.
The Technology Bottleneck
The compliance issue is compounded by a lack of integrated technology. HR executives are managing performance, development, and engagement across multiple disparate tools.
- Tool Overload: 42% of HR executives are using four or more HR tools to manage their global workforce.
- The Solution: The vast majority of leaders (87%) would consider switching their current HRIS to a provider that offers fully integrated global payroll and compliance capabilities.
This shows a clear appetite for technology consolidation, viewing a single, global platform as the primary solution to mitigate risk and complexity.
As global expansion accelerates (with 65% of Dutch and 57% of Swedish companies hiring internationally in the past six months), the importance of getting compliance right moves from operational concern to economic imperative. Failure to manage this risk could slow global expansion, limiting opportunities for both the company and for talent in emerging economies.