Growing your business globally can open up a whole range of new opportunities for your business including entering global markets, increasing brand recognition, and developing international teams. But going global isn’t without its challenges. Hiring international employees is a great way of kickstarting your expansion. Not only will these kinds of employees have local knowledge but you can hire the best people for your roles without limiting yourself to just local talent.
Any kind of international expansion in business comes with its own set of regulations and considerations, including the hiring process. Nevertheless, there are many options to consider that will meet your business needs and ensure that you comply with all legal regulations. These options will largely depend on whether you’re looking to set up a local entity in a specific country or you want to test the waters before making that decision. Either way, hiring outside of your country is not out of the question.
Here are the options to consider when hiring international employees.
1. Work with a global PEO
Professional employer organisations (PEOs) and employers of record (EORs) are frequently confused, but they provide very different services to business owners. Most significantly, while an EOR does not require you to own a local entity in that country you are looking to hire from, a PEO does – great news if you are already set up globally. Hiring through a PEO is done through a co-employment arrangement in which it assumes the full burden of whichever HR tasks you assign to it including payroll and taxes (the same as an EOR), however, some PEO-only companies may not have the same legal expertise that EOR providers have.
2. Hire foreign independent contractors
Another option to consider is hiring foreign independent contractors. However, it’s important to note that each country has its own laws which could lead to penalties if they aren’t obliged so it’s best to work with an expert from that country who can advise you. Nevertheless, if you want to test out a market by committing to hiring full employees, this type of employment could be ideal for your business.
Independent contractors are non-employees who provide professional services to clients on a project or fixed-term basis. They are self-employed, which means they have complete control over how and when they work. It can be a more cost-effective way of testing the water before hiring permanent international employees as long as you don’t misjudge local workers as independent contractors.
3. Use an Employer of Record service
If you do not own an entity in the country where you want to employ someone, you need an employer of record (EOR). There are service providers make hiring internationally very easy as they take care of payroll, local compliances, taxes, and more since they become the legal employers of anyone you hire through them.
Of course, you still determine their responsibilities and monitor their performance but EORs remove a lot of the paperwork that comes with hiring abroad. They take care of the complicated HR work that accompanies hiring workers in other countries, so you don’t have to. EORs are a cost-effective option that allows you to test the water with a small international team before taking the plunge into setting up your own entity if you choose to.
4. Business process outsourcing (BPO)
BPO is a third-party provider that manages all business processes’ responsibilities and opportunities. Supply chain, office administration, and call centres are all well-known BPO examples but the types of roles that fall under BPO are not limited but do tend to take care of supplemental business functions rather than core business functions. There are many benefits of BPO relationships but also risks that need to be considered.
Using this process to hire internationally means you don’t have as much say or control over your team since team members are hired by the BPO provider. Depending on the type of department you’re outsourcing, you should think carefully about the type of relationship you want and need with your global employees.
5. Letting an existing employee work abroad
Why not send one of your existing employees abroad? Having someone who already understands your business and its goals working in a country where you’re looking to expand it can be a real asset. They can feedback on their newfound knowledge while experiencing life in a whole new location – win, win. You will need to properly assess things like tax and of course, inform your employee about any benefits they may lose by working abroad such as medical insurance, but if it’s a temporary measure many employees will still jump at the chance to work abroad.
6. Sponsor a foreign worker to come and work in your country
Hiring international workers can also be achieved through sponsorship, which involves sponsoring a foreign worker to work in your country. However, each country has its own sponsorship regulations, so you must thoroughly understand your legal obligations before proceeding. Migrant workers can help businesses improve their performance and productivity. They can also contribute culturally distinct and complementary skills and knowledge to your company. Filling skill gaps is simple when new skills and talent are offered by foreign workers.
7. Set up a local entity in another country
There’s nothing stopping you from setting up a local entity in another country, just be sure that it’s the right move for you. For bigger, more financially secure businesses, scaling up in this way is a lot easier so if you’re confident about your expansion and have the means to do so, go for it. It is a lengthy and costly process but with careful analysis, your business grows steadily in these new locations. Who knows, in a few years you could have entities in multiple countries. Just be sure to properly assess how each setup is doing before you go ahead and expand even more.
What are you waiting for? Hiring international employees is very achievable as long as you use a method that works for your business needs. Give one of the above options ago today and begin your journey to global expansion.
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