The Global Talent Hunt: Israeli Fintech Innovation & Cross-Border Employment

As a nation, Israel has always punched above its weight in terms of innovation, in business more widely but especially in tech. For a country of less than 10 million people, we have continually exceeded expectations, succeeding at the forefront of global industries despite our relatively modest population.

Suffice it to say, Israeli start-ups have proven themselves to be, above all else, adept problem solvers, and our B2B tech sphere has always led the way in this regard. More recently, as our industries have flourished, we’ve found ourselves facing a new test – that of cross-border employment – and fintech in particular has emerged as an area of real area of game-changing innovation. 

With the World Economic Forum estimating that global remote jobs will grow to 92 million by 2030, there are some pertinent questions we might ask – chiefly, what exactly are the challenges of cross-border employment, and what has Israeli fintech done to tackle them?

The new reality of global employment

In the past decade, Israel has built a thriving economy on the foundations established by our tech ecosystem, with global giants in a wide range of sectors from AI development to cybersecurity. However, with success comes growth challenges, and as Israeli companies have sought to scale up, they’ve begun to encounter some bottlenecks, most notably in talent acquisition. While our domestic job market is strong, it’s not necessarily large enough to support the level of expansion our flourishing enterprises are striving for. 

The solution to this issue is, as one might expect, to look beyond our own borders in the search for suitable talent, and that’s the route many have sought to pursue. A growing number of domestic firms have already made a move to tap into the talent elsewhere, particularly in Europe and North America. However, the reality of the situation is that building a workforce isn’t as easy as finding suitable candidates on LinkedIn and having them sign contracts.

There are a range of complexities to navigate when hiring internationally. Companies must deal with local employment regulations in different countries, for instance, and handle payroll, benefits, and tax compliance, all of which come with complications of their own. All of this has made cross-border hiring a much more difficult endeavor than it ought to be, and many companies have had to curb their ambitions as they’ve found it difficult to justify the hassle of cross-border employment.

With 4 in 5 employers worldwide reporting difficulty finding the talent they need, the trend towards global talent acquisition is not unique to Israel. But, as a country with a disproportionately large and expanding tech industry, we are well-positioned to be first in understanding its implications. As we’ve begun to explore cross-border employment on a meaningful scale, our leaders in fintech have recognized the emerging need for solutions that truly empower it. In response, they have done what Israeli startups always have, which is to innovate and develop the very solutions the world needs.

Ironically, this might be one case where Israeli success has come as a direct result of our small population, rather than in spite of it.

Fintech innovators empowering global talent acquisition

Among those in the Israeli fintech sphere, there have been some notable standouts whose offerings have been revolutionizing the concept of cross-border employment. One obvious example is Papaya Global. Founded in 2016, this company has created a unique software solution that redefines how businesses handle international payroll and workforce compliance.

As we’ve touched on above, managing payroll across borders has traditionally been difficult because it has involved working with numerous local payment providers, as well as dealing with huge volumes of paperwork in navigating local laws and tax regulations. Papaya’s platform does away with all of this, unifying payments under a single provider and leveraging AI to automate all payroll processes, including compliance. This effectively gives companies the freedom to hire the talent they want, regardless of where they’re located, so that they can scale up and pursue their growth objectives.

Another success story in Israeli fintech is that of Okoora. Different from Papaya, Okoora has specialized in tackling foreign exchange challenges. They provide an automated business currency management (ABCM) platform which is designed to help businesses optimize currency exchange and manage currency risk in cross-border transactions. This offers a way to tackle the issues of currency fluctuations and hidden fees which have traditionally plagued businesses with international workforces, enabling them to ensure accurate payment to contractors and employees around the world.

Finally, it’s also worth mentioning Rewire by Remitly. Acquired by Remitly in 2023, this Tel Aviv-based startup focuses on financial services that are tailored to accommodate migrant workers and employees. Their offerings are not aimed at businesses directly, but at those who comprise their workforces, enabling them to effectively manage their salaries and transfer money to their families in other countries. 

Research from Ernst and Young found that 88% of employees are open to longer-term cross-border opportunities in the circumstances. By providing financial freedom and agency to workers, Rewire can help them achieve the kind of financial wellbeing that makes cross-border employment a feasible possibility.

A future defined by cross-border collaboration

It’s becoming increasingly apparent that cross-border employment is not some fad – it’s a phenomenon that will endure and define the future of work worldwide. With more and more companies seeking to participate in global markets, there is a growing demand for high-level talent, and so international talent searches are becoming increasingly common. For companies to pursue this avenue as a viable long-term strategy, they must first tackle the payroll problem, so the implementation of new technologies will be essential.

With cutting-edge innovations emerging in payroll automation, financial transaction management, and financial services for workforces, it is undoubtedly an exciting time for fintech. As global hiring becomes the norm, we are sure to see huge growth in this area in the coming years, and as has so often been the case, it seems that Israeli tech will be leading the way.