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If you want to hire top-notch talent, it helps to search far and wide. When you expand your recruitment efforts to include workers from other countries, you unlock a vast international talent pool and enrich your workplace diversity simultaneously.
However, this is easier said than done. Although hiring international employees yields numerous benefits, onboarding talent from around the globe can also be complicated and time-consuming.
Fortunately, you don’t have to do it alone. Here, we’ll cover tried-and-true methods for building a global team.
Benefits of hiring internationally
Companies that build a diverse and dynamic workforce will drive growth, innovation, and success in the global marketplace. Here are some more benefits of hiring internationally:
- Expansion into new markets: Companies hiring international talent gain valuable insights and knowledge about local markets. This local expertise helps eliminate language barriers and cultural misunderstandings, leading to smoother operations and better market penetration.
- Enhanced customer service: With team members across different time zones, businesses can provide 24/7 customer support. Clients and customers enjoy improved service quality and satisfaction when they can reach a company representative at any time.
- Cost savings: Hiring talent from different parts of the world can lead to substantial savings due to differing salary expectations and living costs in various regions. Companies can attract highly skilled professionals at a lower expense than domestic hires. Additionally, these organizations can cut costs further by operating in countries with favorable tax laws.
- Access to a broader talent pool: International hiring opens up a vast pool of potential employees, helping companies find the best candidates for their needs. This is especially beneficial in overcoming local skill shortages and securing the expertise the business needs to thrive.
Challenges of hiring internationally
Although international hiring offers numerous benefits, it also presents several challenges businesses must navigate:
Complying with local laws
Untangling local employment laws can leave you feeling overwhelmed. Each country has unique regulations concerning labor practices, intellectual property protection, contract management, and payroll systems. However, businesses that lack a thorough understanding of these laws and local customs risk noncompliance, which can lead to legal issues and financial penalties.
Businesses often require specialized legal expertise to adhere to local regulations in each jurisdiction where they plan to hire. In the United States, for example, the Department of Labor oversees compliance with federal labor laws, ensuring fair and safe working conditions.
Paying employees
Managing payroll for international employees poses several logistical and financial hurdles. Companies must navigate local currencies, fluctuating exchange rates, and the intricacies of international bank transfers.
A fair and competitive compensation strategy considers the cost of living, inflation rates, and other economic factors across various regions. With local market knowledge, a business can confidently offer appropriate pay scales, bolstering its ability to attract talent and build sustainable financial practices.
Misclassification risks
Contractors and freelancers offer flexible access to specialized skills without the obligations of full-time employment. However, misclassifying employees as contractors poses a significant threat to a business.
Many countries enforce strict labor laws. What may seem like a simple misclassification can lead to severe penalties, fines, and additional costs. Knowing your way around local labor classifications can prevent any unforeseen issues.
5 options for hiring talent from another country
You can approach international hiring in various ways, but choosing a method that suits your company’s needs and goals ensures that you get the most out of the process. Let’s explore these options.
Hiring directly
The first method for recruiting employees from another country is to hire them directly. This approach requires you to set up legal entities in those countries, ensure compliance with local labor laws, and manage payroll and benefits. Although you get complete control over the hiring process, it can be complex and costly.
Setting up a subsidiary company
A foreign subsidiary lets you hire employees directly under your company’s name. It operates as a separate legal entity, allowing you to conduct business and hire employees locally. For example, U.S. companies planning significant expansion in specific markets might choose this option. However, you’ll need substantial investment, legal expertise, and time to properly set up and operate a subsidiary.
Employer of record (EOR)
An employer of record (EOR) manages the legal employment of international hires on your behalf. The EOR handles payroll, benefits, tax compliance, and other administrative tasks, streamlining the hiring process in multiple countries without the need for local entities, which can be complex and time-consuming. Although this option simplifies compliance, it may reduce some control over HR processes.
Professional employer organization (PEO)
A professional employer organization (PEO) co-employs your international workforce, sharing employer responsibilities. The PEO manages HR functions, such as payroll, benefits, and compliance, while you retain control over daily operations. This arrangement offers a balance of support and control—ideal for companies aiming to streamline HR processes across borders.
Global employment platforms
Global employment platforms (GEPs) provide flexible and scalable solutions for hiring international talent. These platforms handle everything from recruitment and onboarding to payroll and compliance across multiple countries. They are ideal for rapidly expanding businesses that don’t want to sacrifice time and money setting up local entities.
Interested in a GEP? Learn how Oyster’s global employment platform can transform your hiring process and make hiring workers in other countries a breeze.
Steps to hire international employees
Hiring looks different for every organization, but these crucial steps will consistently yield a swift and streamlined recruitment process:
1. Determine the candidate profile
Before you start recruiting international talent, define the ideal candidate profile. Create a job description and listing that resonates with overseas candidates. This listing should acknowledge the unique work cultures and expectations of different countries. Demonstrating your awareness of these differences can make your job postings more appealing and help attract the right talent.
2. Leave time for the hiring process
Hiring internationally often requires extra paperwork and takes more time, especially if the candidate must immigrate from their home country. Temporary residents may require a work visa or immigrant visa, whereas permanent residents need different documentation, such as a green card. You may need additional documentation even when hiring nonimmigrant candidates for remote positions.
Plan your hiring timeline to accommodate these requirements. Be sure to comply with local employment laws, as each country has specific regulations regarding pay periods, bonuses, leave, and other employment practices.
3. Determine the certifications you may need as an employer
Your business may need specific certifications to legally hire international applicants. For example, you might need to certify that hiring international candidates won’t negatively impact local workers.
Additionally, a permanent labor certification is required when hiring international candidates for permanent positions in the U.S. Always research local labor laws, work visa requirements, tax regulations, and necessary certifications for a smooth hiring process.
4. Explore hiring options for international employees
You can use various methods to hire an employee from another country, each with its own benefits and challenges. Consider whether you will:
- Hire directly
- Work with local agencies
- Use an employer of record (EOR)
- Partner with a professional employer organization (PEO)
- Utilize global employment platforms
- Hire independent contractors
- Use outsourcing
Each option offers different levels of flexibility, control, and support, so choose the one that best suits your business needs.
5. Leverage global recruitment channels and platforms
Use global recruitment channels and platforms to attract the best international talent. These resources can help you reach a broader pool of candidates and simplify the hiring process.
A strong onboarding plan is also essential when integrating new employees. It should include an overview of company policies, procedures, benefits, and legal requirements. Incorporate cultural awareness training into your remote employee onboarding process to build understanding and reduce miscommunication within your team.
How Oyster can help
Oyster is a trusted global employment solution that offers fast, compliant hiring, free global HR tools, local knowledge, and localized benefits packages. Our platform makes it easy to quickly and compliantly hire in more than 180 countries to fit your growing company’s talent needs. Find out more about the global hiring process and how we can help.
About Oyster
Oyster is a global employment platform designed to help visionary HR leaders find, engage, pay, manage, develop, and care for a thriving, distributed workforce. It lets growing companies give valued international team members the experience they deserve without the usual headaches and expense.
Oyster enables hiring anywhere in the world with reliable, compliant payroll and great local benefits and perks.
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