To return to the office or not to return to the office, that is the question (to lightly crib from Shakespeare).
Spotify’s Chief Human Resources Officer Katarina Berg pretty much summed up the argument against mandatory return-to-office (RTO) policies: “You can’t spend a lot of time hiring grownups and then treat them like children.” Boom.
Still, while more than two-thirds of business leaders say they place equal trust in their remote and in-person employees the math isn’t mathing, as workplace RTO policies have just about doubled over the past year.
In news that’s likely to come as a shock to no one, employees are less than thrilled with these developments, which opens the door for companies seeking skilled remote team members from around the world.
If your company is ready to expand its remote global workforce or venture beyond borders for the first time, there are several ways to streamline the remote hiring and management process.
Key takeaways:
- Hiring globally offers access to diverse professionals and potential cost savings, but it's important to be mindful when building your team.
- Following local employment laws when hiring internationally is critical to avoid compliance issues.
- An Employer of Record can simplify the process by taking on the day-to-day oversight of compliance for remote staff.
How to Effectively Hire and Manage a Global Team
Fairly Compensate Distributed Teams
One of the advantages of hiring globally is gaining access to professionals in countries with lower living costs than your company’s home base — providing an opportunity to optimize salary costs.
However, you don’t want to approach global hiring merely as a way to reduce expenses.
To attract and retain skilled individuals from around the world — such as marketers, software engineers, and sales representatives — you should offer a competitive salary and benefits package for that region, especially as the battle for top global talent heats up.
Ensure Benefits Parity
Offering a competitive benefits package can play a crucial role in attracting and retaining staff, but the laws governing employee benefits differ significantly across the globe.
For example, while some countries mandate healthcare coverage or paid time off, others — like the United States — have less stringent requirements.
This disparity can create issues for companies with a geographically distributed workforce. How do you ensure equitable access to essential benefits like healthcare, regardless of where your employees live? How do you design leave policies that meet legal requirements and remain fair and competitive worldwide?
Doing so requires an understanding of local regulations and cultural norms, as well as a commitment to providing consistent support for all employees, regardless of their location.
Structure the Onboarding Process
Onboarding new employees is an essential part of building your team, especially when employees are scattered across continents.
Getting the onboarding process right is critical to building your team, especially as some studies have found that one-fifth of employee turnover occurs within 45 days of starting a new job.
A well-structured onboarding process can help remote employees:
- Feel welcomed and valued: Clear communication and a personalized approach can help bridge the distance and create a sense of belonging.
- Understand their roles and responsibilities: Detailed information about job duties and teams helps remote workers grasp their responsibilities and how they fit into the larger company structure.
- Navigate the company's systems and processes: Access to necessary tools, software, and training materials on day one makes it easier for employees to quickly get up-to-speed on the systems they need to do their jobs.
- Connect with colleagues and build relationships: Virtual introductions and team-building activities can help remote employees feel connected and integrated into the company culture.
Investing in the onboarding experience makes it easier for your remote workforce to succeed and feel welcome right out of the gate.
Standardize Asynchronous Work
Building a global team means managing workflows across different time zones and schedules.
While these asynchronous schedules can support flexibility and increase the number of hours your team is available to clients, they also present some potential obstacles, such as:
- Scheduling meetings: Finding a time that works for everyone can be like solving a complex puzzle, especially with large teams spread across multiple countries.
- Project management: Coordinating tasks and deadlines across different time zones requires clear communication to ensure all team members stay on track.
- Building relationships: Cultivating your company’s culture can be difficult when spontaneous interactions and casual conversations are limited.
- Communication delays: Waiting for responses can create bottlenecks and slow progress, requiring proactive communication and efficient workflows.
Overcoming these challenges requires a shift in mindset and a commitment to embracing asynchronous communication as the standard for your company.
Build a Strong Company Culture
Whether your team is fully remote or a mix of in-office, hybrid, and remote employees, ensuring everyone feels connected, engaged, and valued is crucial.
- Prioritize communication and collaboration: Encourage regular communication through various channels, such as instant messaging or video conferencing.
- Promote work-life balance: Encourage employees to set boundaries between their work and personal lives and offer flexible work arrangements whenever possible.
- Recognize and celebrate achievements: Acknowledge individual and team accomplishments with virtual celebrations to show your remote employees that their contributions are valued.
- Invest in virtual team-building activities: From online games and virtual coffee breaks to team trivia competitions, there are countless ways to foster camaraderie and connection among remote team members.
By creating a culture that values connection, communication, and well-being, you can build a strong and thriving remote team that feels like a true community, no matter where they are based.
Challenges of Legally Hiring International Employees
As we’ve already covered, the decision to recruit globally enables your business to draw from broader talent pools.
Depending on your industry, you can also potentially broaden your offerings. But these advantages also come with obstacles.
Maintaining Compliance with Regional Employment Laws
Expanding your workforce across borders adds a new layer of complexity — complying with local employment laws.
That’s because each country has its own set of regulations, covering everything from minimum wage and working hours to statutory benefits like vacation time and sick leave.
Some countries have also enacted stringent data protection laws, such as Europe's General Data Protection Regulation (GDPR). GDPR strictly regulates how employee data is collected, stored, and processed — requiring careful attention to ensure compliance.
Failing to adhere to local employment laws and regulations can lead to hefty fines and legal complications.
Staying Compliant with Local Tax Laws
In addition to labor laws, each country where you hire has unique tax regulations, with varying tax rates, deductions, and filing requirements.
Keeping track of these ever-changing rules and ensuring accurate tax withholding and reporting for employees based across the globe can quickly become a logistical quagmire. Failure to comply can result in significant financial penalties and damage your company's reputation.
Managing Global Payroll
Navigating payroll for a global workforce requires juggling local regulations and currencies. It's a complex process that goes far beyond simply calculating wages and issuing paychecks.
You need to ensure timely and accurate payments to employees, regardless of their location. This can pose potential problems due to differences in banking systems, fluctuating currency exchange rates, public holidays, and payment processing times.
Without a streamlined system and expert guidance, global payroll can quickly become a significant administrative burden, consuming valuable time and resources. Errors and delays can lead to frustrated employees, compliance issues, and financial penalties.
Mitigating Misclassification Risks
Misclassification occurs when a worker who should legally be considered an employee is mistakenly classified by an employer as an independent contractor.
This seemingly simple error can have significant legal and financial consequences. Why?
The criteria for determining worker classification vary from country to country. What might be considered an independent contractor relationship in one country could easily be deemed as employment in another.
Misclassification can also deprive workers of rights and protections they are entitled to by law, such as minimum wage, overtime pay, social security benefits, and unemployment insurance.
Ultimately, misclassification exposes you and your businesses to hefty fines, back taxes, legal battles, and reputational damage.
Avoiding Permanent Establishment
Expanding your global team can inadvertently lead to a hidden risk — permanent establishment (PE).
When a company is deemed to have a taxable presence in a country, even without a physical office or registered entity, it's known as PE. This can occur when companies employ remote staff in another country for an extended period, or if they conduct substantial business activities there.
If your company doesn't have a legal entity in that country, the tax authorities may consider your employees' presence or your business activities as creating a PE.
The consequences of triggering PE can be severe. You may be subject to:
- Corporate income tax: You could be liable for taxes on profits attributed to any local business activities.
- Withholding tax: You might need to withhold taxes on payments made to your employees in that country.
- VAT: You could be required to register for and pay Value Added Tax (VAT) on goods or services provided in that country.
Simplify the Process of Global Remote Hiring
Streamlining the process of hiring a remote international team begins with crafting a coherent strategy for each step, from budgeting to recruitment to onboarding to compliance.
Another way to smooth the way is by partnering with an Employer of Record (EOR).
Hire a Global Team with an Employer of Record
Expanding your team across borders can feel like navigating a minefield of legal complexities, HR hurdles, and administrative burdens. An EOR can simplify your global expansion with:
- Streamlined onboarding: EORs handle all the necessary employment details, such as creating employment contracts and shipping equipment, ensuring a smooth and efficient onboarding experience for your new hires.
- Mitigated legal risks: EORs are experts in local labor laws, ensuring your company remains compliant with regulations governing minimum wage, working hours, benefits, and data protection.
- Simplified payroll and tax compliance: EORs manage global payroll, ensuring accurate tax withholding, social security contributions, and compliant payments in multiple currencies.
- Benefits administration: EORs can help you design and implement competitive benefits packages that meet local requirements and employee expectations, including health insurance.
- Eliminate misclassification risks: EORs ensure workers are appropriately classified as employees or contractors, protecting your company from legal and financial repercussions associated with misclassification.
With an EOR on your side, you can confidently tap into the global talent pool easily and legally.
Build Your Global Team with RemoFirst
RemoFirst helps simplify international hiring, enabling you to employ workers in 180+ countries and manage and pay contractors in 150+ countries.
Schedule a demo today to learn how we can help you reduce hiring costs, mitigate compliance risks, and streamline your global payroll.
