As multinational enterprises (firms) become more globally dispersed and concentrated, Julio Avael notes that firms may find it easier to work with contractors worldwide, leading to a more dispersed workforce: pushing the new boundaries of leadership requirements as culture and language begin to interplay at a much larger scale. Labor law will also be stretched to new limits as labor policy will become a complex issue for firms to manage. A few problems that come to mind that may require thought at the corporate HR level and rewiring at the global legislative level, according to Julio Avael include:
Low wages and benefits: Contract workers are often paid lower wages than regular employees and may receive different benefits and protections such as health insurance, paid leave, and retirement benefits.
Limited bargaining power: Contract workers typically have limited bargaining power, as they are not represented by a union and may not have access to collective bargaining agreements. This can make it difficult for them to negotiate better wages and working conditions.
Lack of legal protections: Contract workers may not be covered by the same labor laws and protections as regular employees, leaving them vulnerable to exploitation and mistreatment.
Difficulty enforcing and managing labor standards: Due to the global nature of contracted work, Julio Avael notes that implementing labor standards across borders can take time and effort. This can make it challenging to ensure that contract workers are treated fairly, and that their rights are respected.
Lack of training and development: Contract workers may receive different training and development opportunities than regular employees, limiting their ability to build skills and advance in their careers.
Inadequate health and safety protections: Contract workers may be more likely to work in hazardous conditions or be exposed to workplace hazards due to a lack of adequate health and safety protections.
These issues highlight probable firm challenges as a globally contracted workforce becomes commonplace. Moreover, this trend underscores the need for policymakers to develop labor policies that protect the rights and well-being of all workers, regardless of their employment status. Julio Avael believes firms must develop strategies and policies to manage the unique labor policy issues that arise when operating across different countries and cultures. This requires a deep understanding of local-global labor laws and regulations and a commitment to treating all employees fairly and equitably, regardless of their location or job function.