When a business grows, it often requires more employees with specialized skills. In a perfect world, a local job posting should bring a crowd of applicants with the exact qualities you seek.
Unfortunately, we don’t live in a perfect world. Finding the right worker to round out your needs might require expanding the applicant pool — maybe even expanding it globally.
With modern technology, the world has become smaller and more accessible than ever. In this article, we’ll discuss three tips for building your international team to give your business the best possible support.
1. Look Into Remote Hiring Options
Expanding globally doesn’t necessarily mean setting up physical shop in another country. Sometimes it’s a simple matter of opening up your hiring pool to candidates in other countries.
Depending on the job duties, international candidates may be able to perform the required tasks remotely without leaving their countries.
Hiring internationally might entail navigating some additional technicalities, but those technicalities don’t need to be a burden to you. How’s that, you ask? If you don’t have a legal presence in the country of hire, you can — in fact, must — engage an employer of record (EOR). This is not the same as a professional employer organization (PEO), though they are similar.
Both types of service providers can manage payroll, benefits administration, and other human resources functions. According to global HR solution provider Remote, the main difference between an EOR and a PEO is the identity of the legal employer. An EOR hires employees on your behalf and is the legal employer of your international hires. With PEO services only, you are still on record as being your employees’ official employer.
This is a vital distinction when hiring internationally. You cannot legally employ workers in a foreign country unless you have a legal presence there. The setup process for opening a new international location can be very expensive and administratively arduous. An EOR has already gone through the procedure of establishing themselves in the country you would like to hire from.
Because your workers are employed by the EOR, they handle the responsibility of staying in compliance with the country’s taxation laws. This can include payroll calculations, reporting, and submitting required employer taxes. The EOR also handles benefits administration and makes sure that employees are receiving all benefits they are entitled to by law.
2. Know When to Hire Contractors or Employees
A worker you hire typically falls under one of two categories: employees or independent contractors. Hiring independent contractors typically carries far fewer legal requirements than hiring employees and doesn’t require using an EOR. So why doesn’t everyone just hire contractors and avoid having to deal with employee administration at all? Each country has its own rules regarding who can be hired as a contractor, and noncompliance penalties can be steep.
In most countries, a worker’s status depends on how much independence they retain in the work they do for you. Setting one’s own hours, working on a short-term project, and working offsite can be indicative of contractor status. Working for only one business, being reimbursed for expenses, and receiving benefits may disqualify a worker from being a contractor.
One benefit of hiring a contractor, if the situation allows, is that you can change their worker status later. It can provide you with the opportunity to conduct a “test run” of a worker’s skills.
For example, a short-term project can give you a good indication of a contractor’s fit with your company. If you like the work they do and want them to work for you long term, offer them employment. By taking them on as an employee, you will probably be offering benefits they would not be given as a contractor.
This system of contractor-to-employee hiring has the potential to bring higher-quality long-term workers to your business. And since onboarding employees is expensive, converting a known contractor lowers your risk of hiring an unknown, potentially underperforming prospect.
3. Be Selective in the Countries You Hire From
When it comes to employer regulations and taxation, not all countries are created equal. One country might seem like a good option because the cost of living is modest and standard wages are subsequently lower. This might not be the cost-saving option it first appears to be, however.
If that country has astronomical employer tax rates, what initially looks like a bargain might end up being a costly option. For example, employers in the United States pay 7.65% in social security tax; French employers pay 45%.
Taking all the country-specific variables into consideration will give you a much clearer picture of your total costs. If you are working with an EOR, they should be able to assist you in determining which countries to hire from. Many of them even have searchable databases where you can enter the exact parameters you’re searching for.
Selecting countries to hire from doesn’t solely hinge upon a total dollar figure. If you have expectations regarding hours worked per week, availability, or non-mandatory benefits, make sure these expectations are acceptable where you’re hiring. If your demands are outside the norm for the country in question, it’s a recipe for subpar applicants and conflict.
The Deep End of the Hiring Pool
When it comes to hiring the best candidates for your enterprise, don’t be afraid to expand your search. Whether you’re looking for higher-skilled prospects or cost savings, building your team internationally is a viable option. By doing your research and engaging the right expertise, you can get the talent you need to take your business to the next level.