How to Hire International Employees

Since remote work has gained momentum, the entry barrier into the global talent pool is lower than ever for companies. 

And why not take that jump?

International employees bring untold value with new perspectives, energy, and inclusivity. Not to mention increased brand visibility in new territories. However, it can be tricky if companies aren’t familiar with local laws, taxes, and benefits. 

This guide will dive into everything you need to know about how to hire international employees, from benefits and challenges to strategies to ensure a smooth onboarding process.

Why hire international employees?

Recruiting international employees boosts the global mobility of businesses. In addition, their international knowledge can aid businesses in scaling their radius in terms of innovation and productivity. Here are some of the reasons why businesses should hire international employees. 

• Allows companies to reach new markets. Hiring internationally helps businesses to acquaint themselves with cultural differences, such as language barriers and etiquette. This alleviates the friction in the transition to foreign markets without alienating international clients. 
• Provides a competitive edge. By hiring internationals, businesses will boost the fostered diversity, which will lead towards greater competitiveness. Having employees from diverse cultural backgrounds is typically a breeding ground for innovations. 
• Increases productivity. A distributed team around the globe will make sure work is done and delivered around the clock. Thus, businesses can build credibility among clients with quick turnaround projects and just-in-time requests. 

What are the benefits of hiring international employees?

When hiring international employees, businesses diversify their workplace with individuals from various countries. In addition, the recruitment process emphasises the unique skills and knowledge amidst the candidates. This greatly impacts the growth of businesses. 

This section will cover some of the prominent benefits of hiring international employees. 

Access to international talent 

The primary drive behind hiring international employees is to introduce workers with diverse skill sets to the team. There could be instances where the business’ native country lacks talented workers in specific areas. 

In such cases, the HR management can consider expanding the search radius across borders to hire international talent with the required skill set. 

Businesses easily secure the best talent that will align with the corresponding job role and provide value in the long-term run. 

Reduction in employment costs

An increased profit margin is another benefit of hiring internationally. Businesses can save on costs by hiring in developing countries where employees would get their pay in local currency. 

This would be a significantly lower amount than the average pay scale in developed countries. Businesses can more efficiently use the available resources. 

Moreover, employee benefits package varies across different countries. With proper research and support, businesses can offer appealing benefits for international workers while still saving money on wages and benefits. 

Increased problem-solving capabilities 

Onboarding internationals with numerous experiences can aid in developing problem-solving approaches. 

These employees can present various ways to tackle an issue based on their background and experience. Even senior employees can benefit from these out-of-the-box solutions. 

In addition, diversified views can mitigate any obstacles and help in foreseeing potential roadblocks in the future. 

Enhances workplace culture

The blending of different perspectives, ideas, and cultures is the best recipe for healthy company culture. So, it’s important to recognise and embrace the cultural practices of all team members. 

The higher management should make deliberate efforts to honor everyone’s contributions and beliefs. Employees will feel respected and part of the company’s spirit and culture.

This will result in high employee morale, as well as a positive reputation, thanks to the company culture. Consequently, the turnover rate and burnout will greatly increase. 

What are the challenges of hiring international employees? 

Hiring international employees comes with undeniable benefits. However, diversifying a business and launching it on the global market can present certain challenges. 

It’s essential to be aware of these challenges before opting to hire beyond geographical boundaries. 

Legal and regulatory compliance

When employing workers from other nations, businesses are required to abide by local payroll regulations, taxes, and labour laws. Failing to comply with these laws and regulations could lead to severe penalties. 

Businesses should do thorough research or hire legal counsel to ensure full compliance with the local set of rules. 

HR services like PEO and EOR can offer businesses support in handling administrative tasks so that the focus can remain on scaling the services and products. 

Different time zones

The time zone differences can have a negative impact on productivity and collaboration. It can be hard to find a convenient time for meetings and working on projects as everyone’s working hours will differ.

Using scheduling tools and setting clear expectations of how they should interact with one another is crucial with global teams. 

Plus, businesses should establish asynchronous communication via email or other online communication tools for better communication. 

Cultural differences and communication barriers 

Cultural differences in norms and ways of communication can be the root of multiple disparities. Language barriers can interfere with communication which will lower work efficiency. 

Providing cultural training can ease the integration process of international employees into the business’ working and cultural environment. 

Open and straightforward communication also helps in detecting misunderstandings and conflicts before they escalate. 

Legal entity registration

Employing multinational workers demands the business to register a legal entity in that particular country. Businesses might find this daunting due to the risk of compliance. 

Companies like Native Teams can function as a legal entity in a specific country and hire employees on behalf of the business client. 

This means that companies don’t need to set up a legal entity in the country they want to expand in order to access international expertise. 

Basic strategies for hiring international employees

Establishing a global strategy when hiring employees in more than one country can help businesses to handle difficult situations tactically. Here are some strategies businesses can implement that could be deciding factors in their global expansion. 

1. Set up a legal entity for your business in the country where you want to hire employees

Opening international offices creates an image of commitment to becoming a part of the local market. It builds trust among the local business community; therefore, brand awareness increases. 

In addition, the business’s current staff will have the opportunity to relocate to a new location and gain international experience. 

However, entering a new market with a legal entity requires investment in time and capital. So, it’s important to do proper research on things needed for an office in a foreign country. 

2. Contact a professional employer organisation (PEO)

Once a business has set up a legal entity in a new location, the legal requirements and administrative tasks for the local employees will continue to add up. 

Businesses can outsource HR-related tasks, like payroll management, legal compliance, and benefits packages, to professional employer organisation (PEO) to free up time and resources. 

PEOs providers will take on the burden of handling the never-ending red tape and improve the overall work efficiency. 

3. Work with an employer of record (EOR)

Hiring international employees through an employer of record (EOR) provider is the fastest and most cost-effective method. For businesses that don’t own a legal entity in other countries, the EOR can hire international employees on the businesses’ behalf. 

The other advantage is that businesses don’t have the hire HR management, legal counsel, and compliance experts — EORs manage all of those duties. 

Moreover, EORs remain liable for any compliance risks when hiring abroad because they function as the legal employer of the local employees. 

4. Hire international contractors to work on specific projects or for specific time periods

Working with independent contractors is crucial for businesses that necessitate specific skills which aren’t available in their native country. 

International contractors typically don’t have the full set of entitlements as regular employees, meaning that businesses can reduce overhead costs. 

Nowadays, businesses can easily hire, onboard, and pay international contractors with a hassle-free invoicing tool. 

Common mistakes in hiring international employees

By investing time in thoroughly understanding the in-country laws and regulations, businesses can sidestep these obstacles and avoid fines and penalties. Here are some of the common mistakes when hiring international employees. 

1. Misclassifying employees

When hiring international employees, one common mistake is the misclassification of their employment status. 

If a business pays a fixed amount on a regular basis and has full access to their working schedule is deemed as an employee. This means that the business is required to pay contributions and provide benefits to that employee. 

2. Violating the new country’s laws

Employment and labour laws differ across countries. Therefore, businesses need to gather information on notice period durations, creating employment contracts, and following the rules around labour laws. 

In addition, social and benefits deductions need to be considered. Some countries have strict rules when it comes to social deductions, insurance, and retirement plans. 

3. Incorrect payroll calculations

Executing compliant payroll calculations can be highly complex. When employing internationals, businesses are expected to run a local payroll because international employees can’t be added to the home payroll. 

One small miscalculation or lack of contribution can affect the employee’s take-home pay. Payroll calculators provide a full salary breakdown in the countries businesses want to hire.

Tips on hiring international employees

Growth-minded businesses should follow a deliberate recruitment process to attract professionals with the highest expertise. Below we cover some tips that can be utilised for hiring international employees. 

1. Determine the hiring status

An important first step is to determine the hiring status — as an employee or contractor. Hiring contractors might seem simple, but it could lead to issues if due diligence isn’t done based on the local employment rules. 

International employees provide more stability; however, businesses could be required to establish a legal entity to start hiring. 

It’s essential to make this distinction at the beginning of the process to avoid misclassification. 

2. Network and acquire referrals 

To ensure the right international talent for a certain position, acquiring referrals from trusted sources can aid in such a search. 

Asking for recommendations from local businesses in the same industry or current employees who have global networks can be more beneficial than posting a job post. 

As a result, the credibility of the business around the world will improve while increasing the business’s talent pool. 

3. Review the legal requirements 

Expanding in countries that have a low tolerance for lack of compliance means it’s imperative to execute error-free payroll and full compliance. 

Streamlining payroll management with automation tools can centralise the system and minimise the burden that comes with global compliance. 

On top of this, it’s vital to stay abreast with the newest changes related to labour laws and payroll regulations. 

4. Develop an onboarding plan

A positive onboarding experience leads to increased employee retention. Developing an onboarding plan will help the new employee to learn the ins and outs of the team and integrate faster. 

The onboarding plan can entail personalised welcome messages, and internal training to familiarise them with the forms of communications and team members. 

The team management should also explain role-specific expectations and assign manageable initial projects. 

To sum up

International employees can immensely diversify a business’ workforce and provide fresh experiences and perspectives. By following our strategies and tips, businesses can recruit foreign workers without worrying about legal compliance!