Hiring employees based in other countries is a great way to grow a company. These employees offer business owners an opportunity to gain access to new markets, perspectives, and talent that can help them access clients around the world.
Hiring internationally is also great for growing your workforce with remote workers. It might even make your company more attractive to top talent, as 61% of employees prefer to work remotely full time and 97% of employees don’t want to return to the office full-time.
When you are ready to hire international employees, it's important that you understand all of your options. In this article we run through some reasons to hire globally, and the pros and cons of each international hiring method so you can make an informed decision when hiring global employees.
Reasons to hire global employees
The proliferation of new technology to enable cross border communication and the massive market opportunity means that more and more businesses are looking to expand internationally. Business owners are looking for growth opportunities around the world, and hiring international employees can be a game changer for your company.
International employees can bring various benefits thanks to their skills, experience, and knowledge. Benefits of hiring overseas employees include:
1. You have access to a wider talent pool.
While your country's labor force might be large, it's still a fraction of the number of people who are looking for work worldwide. For example, countries in Europe, Latin America, and the Middle East have seen very high growth rates for Engineers and Software developers, where they have the necessary skills and tools to work with international teams.
Opening your hiring process to a wider group of candidates means that you'll have a larger group from which to choose — which is particularly important if you're trying to find someone with a unique set of skills and experience.
2. Language skills.
Hiring international employees also gives you access to people who speak multiple languages. This can be extremely helpful if you need to communicate with partners or clients who use other languages on a routine basis. It's also helpful if you're looking to expand into certain markets; having someone who speaks the language will make it easier to create content and ads for those areas.
3. Build brand awareness globally.
Your international employees can help you gain a better understanding of different markets and give you insight into how your business is perceived in those places. You can also better tailor your product or service to fit various cultures around the world.
4. Reduce costs.
In some cases, it may be more cost-effective to hire remote workers from other countries than it would be to send your employees abroad for work. For example, the average 3-year expatriate assignment costs $1 million. Hiring international employees allows you to expand your team without having to go through the hassle and expense of relocating them.
Ways to hire internationally
If your company is looking to expand abroad or simply hire an employee from another country, it’s not as simple as just saying you are willing to hire remote employees. When it comes to onboarding an international employee, there are differences in benefits, tax compliance, and more that you need to be aware of.
To help you decide which approach is right for your company, we've outlined the three most popular methods of hiring international employees below.
1. Work with an Employer Of Record (EOR)
An Employer of Record (EOR) is an organization that allows companies to expand internationally by hiring and paying employees on behalf of another company.
They take care of all formal employment tasks, such as onboarding processes and compliance documentation. Basically, employers hire EORs to ease the burden of managing international workers, and to stay compliant with local employment laws.
Who is this for? This is a great option for companies that are looking to expand into new markets and/or hire international employees. With an Employer of Record (EOR) you don’t need to set up a local entity in a new country before testing the potential market, which can save you thousands of dollars. EORs are also the best solution for companies that need to hire people short term or for specific projects.
Cost: Will vary by EOR, amount of employees, level of benefits, and other factors. However, EORs should provide a clear and streamlined invoice that includes all services and taxes, with no hidden expenses. We offer a comprehensive service starting at $199 per employee per month.
Pros: EORs take care of all formal employment tasks, such as onboarding processes and compliance documentation. This makes international expansion easy because you don’t have to incorporate locally or manage regional compliance for every country you employ in.
Cons: While you are responsible for your employees’ day-to-day tasks, an EOR will typically handle the onboarding process so you might feel like you have less control when your employees are first joining.
Top tip: Look for an EOR that has access to the local, regional, and global market for the best chance at expanding into multiple countries with an expert ally.
2. Hire Contractors
Contractors are not employees — they are independent workers and have a separate legal classification and tax treatment. They usually work with one company at a time, and can be hired for specific projects — bringing a different set of skills, knowledge, and diversity to your team. Additionally, there is no legal relationship between the company and the contractor.
Who is this for? Contractors are a good option for those looking for staffing flexibility when managing their team or projects, since you don’t have to worry about long-term contracts or benefits. Another great use for contractors is to provide 24/7 service in different countries or conduct local market research.
Cost: You can pay an independent contractor in the country where they live, instead of hiring them as an employee. The main advantage of using this method is that you are not responsible for paying local taxes or insurance costs.
Pros: Contractors come with skills required for the project, they do not need to be trained, and need less management.
Cons: It’s hard to form a relationship or build loyalty as they work on such a short-term basis. For the contractor, since they are responsible for their own taxes, it may be challenging to be approved for a mortgage without traditional full time employment.
Top tip: Conduct your research, take your time, and get everything in writing!
3. Hire Freelancers
Freelancers are independent contractors who specialize in specific areas. They work on a project by project basis, and can be hired either per hour or per project. Unlike contractors, freelancers usually have several clients at a time.
You can hire freelancers through online platforms like Upwork or Freelancer. These sites make it easy to post job descriptions and receive applications from people all over the world — but keep in mind that these arrangements may require additional legal work on your part if you want those workers to remain exclusive to your company during their contract period.
Who is this for? Freelancers are great for small teams that need a little extra help with ad hoc projects such as list building or quick design work.
Cost: Freelancers usually cost less than a traditional employee because you only pay them for the hours they work on your project, rather than a fixed salary or hourly rate plus benefits and taxes.
Pros: They can be found almost anywhere in the world and can work remotely. Freelancers pay their own taxes and insurance, so you don’t have to worry about it. They allow you to try out someone new without hiring them full time.
Cons: You can't keep track of what freelancers are doing during their day to day, and they will most likely be working for several clients at once, so you can't expect them to live and breathe your company culture and values like an employee would.
Top tip: When hiring a freelancer, always ask to see a portfolio or have them carry out a task to see how they perform before you commit!
Summary
How you choose to hire your next set of international employees will depend heavily on your growth goals and company size. For most companies we recommend working with an Employer of Record (EOR) so that you can legally and efficiently engage with workers in other countries without having to set up a local entity or risk violating local employment laws.
By working with an EOR such as RemoFirst, you can easily build a team of remote employees in practically any part of the world. We'll handle everything from payroll to compliance so that you can focus on growing your business while avoiding tedious HR tasks and risk. Request a demo today and start hiring globally tomorrow.
