Considerations to Take Into Account When Hiring Globally
Depending on the industry, overhead costs can take up a large percentage of a business’s expenses. Because of this, it’s important to have your priorities in order for hire. Cost savings, expertise, and personality fit can all factor into hiring decisions.
Maybe you’re struggling to find local job candidates who have the skill set you need. Maybe entry-level hires are becoming increasingly unaffordable due to the rising cost of living in your area. If these situations sound familiar, you might look into hiring globally in order to increase your options.
The simplest way of accessing international talent is by hiring remote workers. This avoids a great deal of hassle relating to visa applications and approvals but comes with certain aspects to consider. Here we’ll discuss what you need to keep in mind when contemplating whether international hiring is right for your company.
Compliance With Local Labor Laws
An EOR vs. a PEO
International hiring is surprisingly easy with the right help, especially when you’re exclusively hiring remote workers. One compliance rule that actually makes it simpler for employers is the requirement to engage an employer of record (EOR). This rule is applicable if you are hiring international employees and don’t have a legal entity in the country of hire.
An EOR operates by going through the tedious process of setting up legal entities in multiple countries. From there, they can hire employees on your behalf. The employees perform services for you, but the EOR is technically their employer. This means the EOR oversees all payroll and benefits administration.
If you do own your own local legal entity in the country in question, you can either perform administration yourself or hire a professional employer organization (PEO). A PEO can perform some of the same functions as an EOR, but there are notable distinctions.
The main difference between an EOR and PEO is the liability of worker hire. With a PEO, you employ the worker directly through your own local entity, instead of having the EOR do it through theirs. Any fines or penalties from employer noncompliance with local labor laws fall on the legal employer.
Contractors vs. Employees
Choosing between an EOR and a PEO is not the only thing to consider when determining compliance with labor laws. The classification of your workers also has ramifications when it comes to wages, required benefits, and legal compliance. Because rules and regulations vary a great deal between countries, enlisting a global hiring partner is highly recommended.
Especially if you’re just starting to investigate international hiring options, it might be tempting to just pay everyone as a contractor. While it is certainly the simplest option, it could also leave you vulnerable to substantial penalties and fines.
An expert third party can tell you how each country classifies contractors and employees and what that means for your bottom line. This is especially helpful when deciding which countries you might want to include in your talent search.
The Nature of the Job
It may be very exciting to potentially open up your hiring pool to the entire world. However, it’s important to make sure that any downsides of international hiring don’t outweigh the benefits. Since we are primarily focusing on remote hiring, most downsides would relate to a worker’s physical presence or lack thereof.
For example, administrative support roles are some of the more popular positions to fill with international talent. If the specific role you’re hiring for is centered around data entry, an international remote worker is likely a viable option. If the role requires having someone on location for occasional event setup or supply runs, keep it local.
The language barrier is another aspect to consider. International hiring is much easier when communication is limited to straightforward requests via email. A good example of this might be hiring the services of a software programmer. Alternatively, you may be seeking an engineer who speaks directly to clients and needs to understand and communicate very precise instructions. If the language requirements shrink your international candidate options to a very select, expensive few, the cost may outweigh the benefit.
The last thing to consider with the position itself is technology requirements. Modern technology has made it increasingly easy to utilize remote workers both in-country and internationally. However, there might be a disconnect between your current tech structure and what would be needed to get remote workers functioning.
If you want a remote worker to answer phone calls and forward them internally, you need an internet-based phone system. More and more businesses are switching to internet-based (VoIP) systems due to more powerful options and hybrid work capabilities. If your company has already switched, then taking on an international remote worker for call answering duties should be relatively simple. If your business is still operating with landlines, though, the tech upgrade required to take on a remote worker will be substantial.
Open Up Your Hiring Options
There are certain industries where hiring international talent isn’t efficient and remote workers would be unable to perform important tasks. Delivery drivers, warehouse personnel, and restaurant workers are just a few roles that simply cannot be outsourced. Alternatively, there are a myriad of areas where remote international workers might be a welcome solution to ongoing hiring woes.
Technology has made it possible for businesses of all sizes to look overseas for everything from customer service reps to data engineers. Before you launch a global hiring spree, make sure you get the help you need to find the best fit for your business. By opening up your search radius and leveraging the right expertise, you might round out your team to be better than ever.