How to hire international employees

Remote work may have been a futuristic idea at some point. But today, most jobs do not require in-person presence as more and more businesses are embracing remote work.

As a result, around 74% of organizations plan to shift to some degree of remote work. As per data shared by McKinsey, remote work culture soared by 400% more than what it was before the onset of the pandemic.

While the popularity and perks of remote work are driving companies to hire workers based in other locations, the task of hiring overseas is quite daunting. We have come up with a seven-step process to help you understand how to hire foreign workers. This process will tell you how to hire employees overseas in a hassle-free way. But, before that, let’s see why you should know about hiring a foreign employee and the benefits of global hiring.

What You Need to Know How to Hire a International Employee?

Before you learn about how to hire foreign workers, here are a few reasons why you should know about how to hire a foreign employee.

• Foreign employees can be an asset to your organization. Their language abilities, foreign knowledge, and fresh perspectives can significantly contribute to helping companies reach a global market.
• Further, with foreign employees, companies can improve their innovation and creative zones. They can benefit from new ideas and different skills.
• Hiring foreign employees can promote diversity and inclusiveness within the organization. It can also boost workplace culture.

Benefits of Hiring Foreign Employees

An ambitious business can benefit by hiring employees from around the world in more than one way. The top benefits include-

1. Scope of accessing a larger talent pool

Sometimes, hiring individuals who reside close to the head office restricts a business's ability to find and connect with the best talent. Opening up to the idea of scouting talent from beyond immediate locations broadens the scope of accessing an excellent talent pool and reduces labor costs.

Additionally, with the help of reputable third-party service providers like Gloroots, limitations on candidate discovery and distribution of global payroll have become more accessible to manage.

2. Cultural Diversity

When you hire employees from all over the world, you open your market to different cultures and increase the diversity of thought within your organization. It gives your company a varied perspective and a nuanced understanding of different locations, cultures, and user experiences.

3. Opportunity to enter a new market

Scouting talent from foreign markets allows businesses to enter a new area of operation. It also effectively attracts a newer customer base and enables controlled testing of the latest products and services.

Hiring global talent gives businesses the upper hand in adding a localized feel to their products and services. It also places a company in a better position professionally and culturally. Additionally, it helps the brand understand what its consumers expect from it.

Above all, hiring international employees to enter a new market lowers the need and expense to transfer existing employees to newer locations.

Challenges of Hiring Foreign Employees

Navigating immigration Laws and work permit: Most hiring difficulties in the international labor market will always originate from the failure to understand very complex and, at the same time, inhomogeneous laws of immigration amongst countries. This may be very overwhelming to them, considering every country has its rules, timelines, and employment criteria. Failing to adhere to immigration regulations can pose a significant risk to businesses.

Understanding Tax and Employment Regulations in Different Countries: Employers must understand tax and employment regulations in each of the countries to be able to fully and compliantly engage foreign remote talent in the workforce. The countries have different tax structures, reporting requirements, and social security contributions, which seem to be a daunting task.

Compliance with Local Laws and Regulations: Adherence to local laws and regulations not only protects the interests of the international employee but also of the employer who hires them. The firms should also, in their hiring, ensure that they comply with the local regulations that will include laws and rules on working hours, overtime payment, benefits, contract termination, etc.

Employee misclassification: Employers must be very detailed when classifying and distinguishing the differences of an independent contractor from that of a full-time or part-time employee. Independent Contractors are employed for short-term assignments and are self-employed and pay their own tax, social security, health insurance, etc., and control job duties, rates, hours, etc.

However, the employee is any person hired and paid by an employer according to the stipulated terms and conditions of service for the time worked. The employee is a full or part-time worker with rights under the legal employment and labor laws of the host country; the employee receives compensation, overtime pay, sick. 

Misclassification of work is a very topical issue and a serious one. In this regard, the organization could, in turn, see them being taken to tribunals and fined if it is seen that these organizations are denying the worker his or her rightful statutory benefits such as holiday and sick pay. It also affects the organization negatively in perspective to fair employment rights and may be seen as subversion or circumvention of legal protection

Employer/Employee Liability and Insurances: Injuries that foreign employees get in the workplace or from work-related causes can sometimes be incidental, sometimes serious, and may cost your business money in expensive lawsuits and damages. The employees traveling for work and/or employed in the jurisdiction of another country have to comply with legal compliances and safety rules. Insurances should be held for the business and business protection; some countries insist up to certain coverage for one.  When using an Employer of Record, an organization will ensure that the chosen Employer of Record maintains comprehensive global corporate insurance with the appropriate levels of cover that are at least the minimum requirement in every country.

Competitive salaries: Competitive compensation and benefits motivate employees, reduce churn. Expectations and regulations in compensation and benefits are different from one country to another.

Employers must prepare a compensation package for the international staff for every country entered, taking into consideration factors such as cost of living, local market rates, statutory benefits requirements, and common employee perks, so that they are well placed to attract the best talent in the respective target markets.

Besides being competitive and fair, the global compensation packages should also ensure that the country's minimum wage, income taxes, statutory benefits, and pay equity laws are followed to the T. The company will also be tasked with the duty of conducting periodical review checks on their global compensation strategy to ensure competitiveness and compliance to the evolving state of employment laws.

Unfortunately, ensuring due diligence in the compensation and benefits package for the international staff really puts a strain on HR teams. HR has to take the responsibility to be well versed with laws from across the globe, ensuring that the benefit package extended to the employee is well within legal purview.

How to Hire a Foreign Worker?

Follow these steps if you plan on hiring employees from across the globe:

Step 1: Check and confirm job profile

Before starting the interviewing process, ensure you have a clear idea of what you want and expect from new hires. Chalk up a job profile highlighting desired tasks, qualifications, and experience requirements. Don't forget to add company culture into the mix.

Such a profile will help applicants understand the job description and allow hiring managers to match the requirements with the applying candidate better.

In fact, the location from where a company intends to hire employees is quite crucial. For instance, when a US company plans to hire a foreign employee in the States, it needs to carefully plan so that the hired individuals meet the highly restrictive work visa requirements.

Also, companies need to be aware of the challenges that could arise with hiring employees overseas. However, one could avoid such a situation by setting up a subsidiary or with the assistance of a global employment solution provider.

Step 2. Find out about taxes and employment norms

Different countries follow different norms of taxation and employment policies.

So, before a business starts the remote hiring process, it is crucial to understand how these policies vary across regions. Get well-versed in the policies to ensure smooth hiring, onboarding, and retention of remote workers.

For example, NRIs pay taxes overseas and therefore need to be hired at a different pay grade than remote workers from India. When you have a niche partner like Gloroots on your side, the process becomes a lot simpler.

You get the right assistance for everything from taxes and talent requisition to help your business find the right motivation!

Step 3: Be clear about the type of worker you want

Take some time to figure out if your organization needs an employee or could use an international contractor. Typically, when a company hires an international contractor, it does not have to offer any payroll to provide social security or employer tax.

However, companies usually have to pay contractors a higher hourly rate and pay them a lump sum. As a result, businesses often planning on minimal engagement with professionals feel more comfortable hiring international contractors.

That said, companies must be cautious about treating employees as contractors, as any non-compliance while hiring abroad can land them back taxes and hefty fines. Contractors tend to seek different growth opportunities than full-time employees and prefer a more defined and niche job role.

Step 4: Explore relevant channels of recruitment

As a next step, businesses should find an ideal hiring channel to find the type of candidate they desire. Currently, LinkedIn, Recrew and industry-specific job sites are a rage in different countries. However, in most cases, big companies often outsource the hassle of scouting eligible candidates to reliable partners like Gloroots that have a good presence in international markets.

Step 5: Assessing candidates' skills by company standards

This step is crucial as it helps understand whether applicants fit the job profile and description. Due to the difference in educational processes worldwide, there will likely be candidates with different levels of applicable skill at the same level of education. Therefore, a certain standardization of credentials must be conducted before hiring.

However, as someone willing to hire candidates from abroad, it is wise to keep an open mind regarding CV formatting conventions or presentation of information.

Step 6: Initiating the interview process

Typically, the interview process includes a series of steps. Planning them helps to carry out the process smoothly. A standard interview process comprises initial screening, testing, task assignment, and a final round of discussion.

With the emergence and enhancement of digital technologies that offer video communication, remote interviews have become personalized and safe. However, companies must ensure neutral hours to make candidates feel more comfortable during interviews while hiring abroad.

Step 7: Hire and onboard candidates

If the interview round is concluded positively, the selected candidate is ideally hired and onboarded. Subsequently, companies should walk the hired employee through the norms and regulations of working in a remote company and crucial in-house policies.

It is best to carry out the remote hiring process single-handedly or via their subsidiaries. However, given the overbearing process of narrowing down on a location, learning about employee regulations of the region, and scouting candidates, it can be quite tedious.

As a result, more companies are now opting for the smarter route of delegating the recruitment and onboarding task to global employment solution providers like Gloroots.

How to Hire Foreign Employees?

1. Establish a legal entity

This is the most feasible option if you plan to establish a permanent presence in a new country and hire multiple foreign employees. A legal entity, for instance a subsidiary, allows you to create a full business presence in the overseas location. The subsidiary enables you to hire local talent in the chosen country.

However, establishing a legal entity in a foreign location is time-consuming and costly. Additionally, when hiring in the country, you must understand the country’s labor laws and taxation.

Therefore, if you choose to establish long-term stability in a foreign country, opt for a third-party specialist to help you with HR and payroll. They ensure tax compliance and possess expertise in handling local labor law matters efficiently.  

2. International Employer of Record

An EOR service is the most feasible option for businesses looking for a fast and cost-effective solution.

With an EOR service, the global organization, can onboard foreign workers without establishing a local entity. In this arrangement, the employer onboards talent on the EOR’s local entity. Thus, the EOR becomes the primary employer (on paper), thus absorbing all employee liability and compliance  risks. The EOR also takes care of payroll, benefits, and overall workforce management, while the employer manages the day-day affairs of the employee

Gloroots EOR, can ensure compliance while carrying out the payroll and HR functions properly. You can actively hire and manage a foreign workforce, bypassing the need to establish a legal entity in the new country.

Conclusion

If you are thinking about how to hire a foreign employee, Gloroots, as an EOR, can ensure seamless onboarding of employees worldwide. We also ensure timely payroll disbursement, manage contractors, and help scale operations through our smooth remote hiring process.

But what truly differentiates us from the rest is our expertise in geographical diversity regarding talent acquisition, payroll, and official communication templates.

Contact our team at Gloroots now to avail a comprehensive global hiring solution with minimum involvement in the process.

Hiring International Employees - FAQ

1. How to hire someone from another country?

To hire someone from another country, get the United States Department of Labor certification. Then, interview the candidates who meet your requirements. Apply for a work visa from the US Citizenship and Immigration Services.

2. Can I hire foreign workers?

To hire foreign workers, you must follow a set process and prove to the Department of Labor that there are insufficient local workers to fulfill the job role at the prevailing wages.  

3. How to hire overseas workers without a work visa?

Hiring an employee without a work visa requires the employer to sponsor the foreign national for a work visa or assist the worker in obtaining a work visa before they start working officially.

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