Regional hiring exposes Singapore companies to Complex HR risks

Firms expanding across Asia must navigate varying labor laws.

With 85% of Singaporean companies now hiring regionally, human resources teams are taking the lead in navigating compliance, workforce strategy, and market-specific talent demands, according to Deel’s annual market research.

Kelvin Tan, Director of Dispute Resolution at Drew & Napier LLC, said the Singapore government has long encouraged local firms to expand globally, but labor market constraints are a key factor pushing businesses overseas.

“We have a full employment labor market in Singapore, and many of the companies that are ramping up in areas where we need candidates in specific fields and disciplines, for example, in AI, and that means that companies do need to look beyond Singapore to hire for those particular skill sets,” he said. The pandemic, he added, was a “watershed for remote work,” making cross-border hiring easier and more cost-effective.

Mark Samlal, General Manager, APAC at Deel, agreed. “Talent is everywhere, and the ability to have the right person and the right job for your organisation doesn't necessarily have to be dictated by borders,” he said, adding that Covid accelerated this acceptance.

For Alvin Aloysius Goh, Chief Executive Officer of the Singapore Human Resources Institute (SHRI), market expansion is also a business-driven necessity. “Firms are no longer just serving local markets here in Singapore. I think they are building customer bases around the region, especially in Southeast Asia,” he said, noting that technology tools now allow companies to “build teams where markets are rather than where HQ is.”

Regional hiring, however, comes with its share of regulatory and operational hurdles. Samlal noted that labor law expertise is rarely a company’s core competency. “Being able to be assured, however you scale, that you have the right processes, technology and people in place to make sure that your business profit and absolutely survives the nuances of a new market is clear,” he said.

Tan cautioned that each country’s laws, requirements, and cultural makeup add complexity for companies new to foreign hiring. Missteps can trigger “permanent establishment” status, bringing unexpected tax and compliance obligations.

Tan also warned against overreliance on employer-of-record arrangements, which may not be legally valid in every jurisdiction. He stressed the need to adapt policies to local contexts to avoid inconsistent employee treatment, which could harm employer branding in competitive talent markets.

Samlal said AI tools can help founders “scale with information ahead of time,” streamlining HR practices, but urged companies to avoid reputational risks from poor compliance. “Act with great caution and make sure that you start yourself correctly at the beginning of your journey,” he said.