Seeking limitless business opportunities? Then, it's time to think borderless.
The advantages of hiring international workers include opening up your business to new markets and creating a more inclusive workforce.
It also makes it easier to hire employees with difficult-to-find skills or technical certifications (sometimes at a lower cost than local workers).
Yet, building a global workforce is not without its challenges, including differences in hiring practices, payroll regulations, cultural norms, and employment laws.
Key Takeaways:
- Global hiring offers access to highly skilled international talent, cost savings, and expansion into new markets.
- Employing foreign workers also comes with hurdles, including legal compliance, communication, and payroll management.
- Partnering with an Employer of Record (EOR) simplifies global expansion, reduces costs, and mitigates risks.
Hiring International Employees: Pros
With remote work becoming an established norm, more businesses of all sizes recognize the benefits of hiring international candidates.
This shift has opened up many opportunities, including the ability to tap into diverse skill sets, innovative ideas, and specialized expertise that may not be available locally.
Access to a Global Talent Pool
Finding the perfect fit for your business can be challenging, especially in competitive, specialized, or technical fields.
According to a recent survey by ManpowerGroup, 75% of employers are struggling to fill job vacancies — that’s the second-highest figure on record since the company began conducting surveys in 2006. And the number of employers reporting labor shortages has almost doubled since 2015, to 38%.
Hiring becomes even more difficult when you're searching for a unicorn — someone with a unique blend of proven experience, specialized certifications or education, and a personality that meshes with your company culture.
Opening up the candidate search outside of your local area allows you to be more selective in your search. You can hire a candidate who checks all your requirements instead of settling for a local candidate who checks only a few boxes.
Explore Entering New Markets
Expanding a business into a different country can be a complex and resource-intensive process, which is why many companies choose to start by hiring a few local employees.
Bringing on international workers in a potential new market gives your business valuable time to learn about local customer preferences, business practices, and cultural norms before making a significant investment.
Local employees also provide your company with insider knowledge that can help you avoid costly mistakes and adjust your product, marketing, operations, or sales strategies to match up with regional and customer expectations, setting your company up for a smoother and more successful market entry.
Potential Cost Savings
Hiring global staff, particularly remote employees, can save companies in a number of ways, including eliminating the need for office space.
This can be particularly true of startups working on leaner budgets, many of which start as fully remote.
Another way companies can optimize their budgets is by hiring employees in regions where the cost of living is lower. However, it’s important to not focus solely on salary savings and overlook the big picture — employee retention.
The cash you might save with more cost-effective salary and benefit costs could quickly be eroded if the new employees turn out not to be a good fit or lack all of the necessary skills your business needs. Then, you need to start the hiring process all over again.
And recruiting new employees is not cheap. According to the Society for Human Resource Management (SHRM), many employers have estimated that the total cost to hire a new employee can often be three to four times the position's salary.
By expanding into global markets to target specific skill gaps, your business is more likely to find candidates whose expertise aligns with your needs. This strategic approach naturally reduces employee turnover, as the talent sourced from these markets is often well-suited to the specialized roles you’re looking to fill.
Additionally, depending on where you hire, the cost of replacing employees who do leave may be significantly lower than in your local market, helping to manage expenses while maintaining access to skilled talent.
Gain 24/7 Productivity
Hiring international workers in multiple time zones offers businesses the advantage of round-the-clock productivity.
Teams spread out across different regions can work sequentially, allowing tasks to be handed off from one time zone to another, speeding up project completion and reducing downtime.
This "follow-the-sun" approach ensures that critical work progresses continuously, such as software development, data analysis, or content creation.
A 24/7 workforce can also help insulate your company from work stoppages due to everything from one region's national holidays to natural disasters or other disruptions. Employees not impacted can take the reins, support your customers, and maintain business efficiency.
Unlock Innovation Through Diversity
Employees from various cultural, educational, and professional backgrounds often have distinct ways of viewing obstacles and opportunities.
The range in viewpoints can provide unique insights and fresh ideas — helping drive innovation and creativity.
A diverse team helps businesses understand and adapt to global markets, offering valuable cultural context and regional preferences that can inform product development, marketing strategies, and customer engagement.
Diversity also demonstrates inclusivity, which can improve the company's reputation and appeal to clients, customers, and prospective employees.
Hiring International Employees: Cons
Employing international workers offers many advantages in terms of innovation, potential cost-savings, and geographic expansion. However, there are also several potential disadvantages of hiring a global team.
Recruiting and Retention Challenges
Hiring internationally widens the number of qualified job candidates, but employers need to be aware of potential barriers when it comes to recruiting and retaining international employees.
For one, companies must compete with local businesses that may already have an established reputation in their region.
On top of that, understanding the nuances of regional job markets, salary expectations, and cultural preferences can make it difficult to craft appealing job offers for candidates.
Retention poses its own set of difficulties. Remote employees, especially those in other countries, can sometimes feel disconnected from their team or undervalued if communication isn’t consistent or cultural differences aren’t acknowledged.
Proactive engagement to help employees feel connected can help reduce the risk of losing valuable team members to competitors who may seem to offer a better employee experience.
Time Zone Barriers
International hires may be multiple time zones away, making real-time collaboration impossible.
Without proactive communication, transparency, and oversight, you risk inefficient task hand-offs and potential delays in decision-making, which can hinder productivity and impact employee satisfaction.
That doesn't mean these struggles can't be overcome. To successfully work across time zones, it's essential to:
- Establish Clear Communication Protocols: Use tools like Slack, Microsoft Teams, or email to maintain consistent communication. Define preferred communication channels and response time expectations.
- Schedule Overlapping Work Hours: Find times when most team members are online to connect for essential meetings or discussions in real-time.
- Record Meetings: Record important meetings so employees in different time zones can catch up at their convenience and not feel excluded.
- Promote Flexibility and Respect: Allow employees to work flexible hours that accommodate both their time zone and your business needs.
Communication Barriers and Cultural Misunderstandings
Hiring international workers can introduce language barriers and cultural differences, which, if not addressed, can impact collaboration and productivity.
For example, language differences might lead to unclear instructions or misinterpretations of key information, while varying communication styles — such as direct versus indirect approaches — can create tension or confusion.
Additionally, cultural norms around hierarchy, feedback, and decision-making may vary, leading to unintended misunderstandings or missed opportunities for collaboration. To navigate these issues, you can:
- Establish a workplace culture that values inclusion and encourages open communication.
- Provide language support tools or training to ensure clarity in communication.
- Consider using visual aids, summaries, or written follow-ups for complex discussions.
- Hold diversity training sessions to explain how cultural norms may influence communication and work style.
While these first few challenges we covered can be overcome by being proactive and establishing clear guidelines for your employees, these next few are where things start to get tricky...
Legal and Liability Issues
Managing complicated legal and liability requirements in your home country is likely already a pain. But, when you hire international remote employees, you must navigate the laws governing employment contracts, tax rules, health and safety requirements, paid leave, and more in other countries.
Each country has differing legal and regulatory frameworks to adhere to. Adding to the complexity is the fact that these laws frequently change, making managing compliance across multiple regions challenging (to say the least).
Failing to adhere to local employment laws can lead to costly consequences, like lawsuits, lost talent, risks to your business reputation, and even jail time.
Complexities of Managing International Payroll
You take the plunge, hire an international worker, and successfully navigate foreign employment laws. Next up: you need to accurately and expediently pay your new employee.
Managing international payroll is — you guessed it — complicated. That's due to the differences in labor laws and tax regulations in other countries. Each nation has its own rules governing payroll, including income tax rates, social security contributions, minimum wage, and so on.
Additionally, dealing with multiple currencies and fluctuating exchange rates adds another layer of difficulty, making ensuring accurate payments across borders challenging.
Employers must also ensure data privacy compliance, as payroll processing involves sensitive employee information, and regulations like the GDPR impose strict requirements on handling such data.
Simplify International Hiring with an Employer of Record
As we've covered, there are many benefits to hiring a global workforce, although getting through all the red tape and ensuring compliance when hiring international employees is complicated.
Oh, and did we mention that you'll also need to invest a lot of time and money to open a local entity in every country where you hire to employ your international workers legally? It's a time-consuming process — sometimes taking up to six months or more — and typically costs between $20,000 and $150,000+, depending on the country.
But there's a better way.
You can gain the full benefits of global hiring without the headaches by partnering with an Employer of Record like RemoFirst. We enable businesses to compliantly employ workers in 180+ countries and manage and pay contractors in 150+ countries.
How does it work? We're glad you asked. RemoFirst acts as the legal employer of your global staff. That means you still oversee your employees' day-to-day work, but the responsibility for compliance with international employment and tax laws falls on us, not you.
We also manage:
- Performing background checks
- Onboarding new employees, including shipping equipment
- Creating compliant contracts that protect your IP
- Handling international payroll, as well as employee benefits like healthcare
RemoFirst takes on the heavy lifting, allowing your team to focus on finding and hiring the best talent available, no matter where they live, and integrating them into your team and company culture.
Schedule a demo today and see how easy RemoFirst's all-in-one platform makes hiring and managing international employees.
