Compliance gaps threaten global hiring for AI talent

Multiplier research suggests most mid-sized companies hiring internationally have gaps in tax and employment compliance, even as they ramp up overseas recruitment for scarce AI skills.

The 2026 Global Hiring Gap Report is based on a survey of 500 business decision-makers in the UK, the US, Singapore and Australia. Respondents worked at organisations with 50 to 1,000 employees.

The findings show strong appetite for international recruitment alongside significant operational and legal constraints. Almost all leaders surveyed (96%) said global hiring improves talent quality. However, 46% said their organisations had lost international hires because of local bureaucracy and compliance issues.

Only 8% of organisations said they were fully compliant with international tax and labour laws. By contrast, 92% said they were exposed to tax and compliance risks when hiring internationally.

Regulatory pressure

Labour and immigration rules are shifting across multiple jurisdictions, affecting hiring plans. In the UK, Multiplier pointed to day-one rights under the Employment Rights Act 2025. It also highlighted higher costs associated with H-1B visas in the US and expected legislation in Singapore, where the Workplace Fairness Act is due to take effect in 2027.

Companies often hire internationally for speed and access, but the study suggests internal processes struggle to keep up. Multiplier reported that 91% of companies can hire faster when looking abroad, yet many still face friction in onboarding, payroll and worker classification across borders.

The report also links compliance obstacles to a shift in where businesses source talent. Cost-driven hiring appears to be giving way to a stronger focus on specialist skills. Multiplier said 65% of companies now hire in North America, which it described as a change from earlier patterns that were more savings-led.

AI roles move

AI skills are a central driver of global recruitment. Multiplier found that 46% of respondents were hiring overseas to meet AI skills needs.

Separate research cited in the report, from LinkedIn's Labour Marketing Report, found that AI engineering talent is eight times more likely to move internationally than other roles. Multiplier's survey also pointed to immigration constraints, with 33% citing visa and immigration challenges as a reason to hire abroad.

Even when firms identify suitable candidates, legal and administrative hurdles can derail offers and start dates. As well as the 46% who said they lost international hires because of red tape, the same proportion said they had failed to onboard international talent due to compliance issues.

Regional complexity

The report breaks down compliance pressure by region and highlights where companies face administrative and legal exposure.

In North America, it pointed to overlapping rules across states and provinces, alongside professional employer organisation regulation and worker classification laws. In Europe, it highlighted local payroll and benefits obligations, termination protections, working-time rules and GDPR requirements. In parts of Asia, it cited mandatory digital payroll systems, data localisation requirements and increased enforcement of anti-bribery and employment standards.

The report also pointed to broader policy trends that could reshape cross-border hiring, including protectionist economic policies and initiatives such as EU Inc., a proposal aimed at creating a single legal business identity in Europe. Multiplier framed these trends as factors that can increase complexity for employers trying to expand teams internationally.

"While the global economy is more interconnected than ever, the regulatory landscape for hiring remains extremely fragmented," said Sagar Khatri, CEO of Multiplier. "Ninety-one per cent of companies are able to hire faster when they look abroad, so the desire to hire from anywhere necessary is there. Simplifying compliance is the essential key to making the next era of hiring truly borderless."

Multiplier positions its business around cross-border hiring and payroll, supporting the hiring, management and payment of global teams in more than 150 countries through products such as employer of record, contractor of record and global payroll services.

It says it has worked with more than 1,500 customers since 2020 and processes more than US$2 billion in cross-border wages. It expects regulation, immigration policy and skill shortages to remain central to international recruitment, with AI roles continuing to see higher cross-border mobility than many other job categories.