In today’s business world, expanding your workforce internationally is a smart decision. Removing geographical boundaries in hiring enables you to expand the diversity of your team and access top talent with varied skills and experience. While there are many benefits of hiring remote employees internationally, the process itself isn’t that simple. Hiring from other countries means complying with each country’s employment and payroll laws. Here are some factors you’ll want to consider before you start your hiring efforts.
Before you begin, consider this: How will you pay your new remote international employee? One of the first steps is to set up local payroll accounts and banking infrastructure. You’ll need to follow the payroll regulations of the country you’re hiring from, including making appropriate deductions and sending remittances to the local government. And be aware that tax time can get complicated, so you need to understand the taxation processes of the countries you’re considering.
When you hire employees from other countries, you need to manage them using their local country’s laws, which you may not be familiar with. Expect to create a completely different employee handbook for those employees. From the holidays observed to the regulations surrounding at-will employment and parental leave, each country will have its own employment regulations. Taking the time to get to know the countries you’re hiring from is a must.
What your company is willing to pay for certain job roles in your own country—and what candidates are willing to accept—may not translate elsewhere. Due to differences in global economies, currencies, skills gaps, costs of living, and employee expectations, you may have to change your standard salary policies in order to attract and retain top talent from abroad.
Setting up Local Entities
If you’re going to start a business in a new country, building infrastructure in that country is worthwhile. However, if you’re simply hiring remote employees without plans to operate in the countries where they reside, it’s difficult to justify the cost. This process could also delay your hiring efforts by six months or more.
The Contractor Solution
To eliminate the stress of dealing with local employment laws, or setting up payroll accounts and banking and insurance infrastructure that comes with hiring remote international employees, consider hiring contractors or freelancers. It’s a great option if you’re looking for help with short-term, temporary projects. However, if you’re trying to fill a long-term, permanent role, hiring a contractor may put you at risk of contractor misclassification, which can result in fines, penalties, and lawsuits. For these types of roles, it’s best to offer formal employment.
The Easiest Way to Hire Remote Employees Internationally: Work with a PEO
A professional employer organization (PEO) is a cost-effective and simple solution to the challenges that come with hiring internationally. You can use their local infrastructure to hire quickly without having to set up a local entity, while leveraging their payroll services and international compliance expertise to hire abroad while remaining compliant with local laws. Essentially, the PEO becomes the de facto local employer of your remote employees on behalf of your company.