Hiring International Employees. The Tools to Navigate Going Global

We at EasyStaff know that hiring international employees is as challenging as it is empowering and liberating. While some companies shy away from the idea because of how expensive or difficult it may be, others are actively exploring the field to drive growth, revenue, and efficiency. And there is a good reason behind the excitement! In today’s connected world, national borders between businesses and the global talent pool are almost non-existent. Global expertise is achieved through global presence, and setting up remote teams of international workers enriches management experience and streamlines market access.

Yet, to be totally honest, there are of course pitfalls that may make the journey to international presence risky. Starting from local payroll regulations, such as taxes and benefits, to permanent establishment and worker misclassification, there are many questions to consider before you post your international job posting.

In other words, what are the benefits of hiring internationally? Well, there are quite a few! With the help of remote teammates, your local office-bound team can not only access region-bound expertise, but also enrich their own understanding of the field and think of new approaches to business.

If you are planning on entering a new market, then a remote team can provide you with necessary help and knowledge to build trust and gain authority in a new location as quickly as possible. Employees that live overseas in the foreign context are able to guide the business through the challenge of setting a business abroad with the help of their established networks, and national insights. For example, if a service for booking transfers decides to enter an Asian country, they will surely need a local business developer to establish connections with services their users may be using.

If you are planning on hitting on your DEI figures, then going global may well be just the right option. There is an immeasurable amount of genuine business value that a company finds in an international workforce. By introducing yourself and the team to a different viewpoint and skill set, employee performance improves, productivity increases and turnover decreases. Contributing to your DEI, you increase your brand recognition and authority.

If you are looking for a way to reduce costs of your business, then going global may be quite an option. By hiring employees elsewhere, in traditionally cheaper countries you are able to spend less and save for business goals.

If you want to build resilience, going global may help you solidify operations and streamline processes. Doubtless, the endeavor may be chaotic at the beginning. If you assist yourself with a team of local workers, then the experience is priceless.

Clearly, to every advantage there is a pitfall that a company needs to foresee. So stay on the lookout for these challenges.

• Worker misclassification. If you misclassify an employee as a contractor, you risk getting subject to taxes and fines overseas, which sometimes have an interest rate behind them. That in turn makes the mistake all the more costly. National labor law normally protects employees by imposing duties on employers to ensure employees are provided for in case of unemployment. That is why there will be control over how much you pay as taxes and whom you pay salaries to.
• Paying foreign employees. Once employees and contractors are carefully classified, the question of payment comes up. It may seem there is nothing simpler than sending money via a transfer. But it is in fact a lot more complex. When a company is spending money, whether as salaries or any other expense, it needs to collect closing documents that explain why money was spent. With salaries, those closing documents are especially important. If it is a natural physical person that is being paid, then obtaining a closing document is impossible. Simply put, that person needs to be employed. Alternatively, they need to be an independent contractor, i.e. a person able to provide compliant closing documents.
• Compensation. Salary is of course part of it, but the concept goes far beyond wages. Local currency stability affects the amount of money paid and its currency. If you expect your remote contractor to move elsewhere (say, from Asia to Europe), you need to plan as to how much money will be reimbursed, if any. Additionally, medical care, office rental or gym membership may also be paid for to help your remote teams feel supported and cared for.
• Local legislation. This aspect covers more than payments. It relates to the business’s legal presence and all of its aspects, such as intellectual property management, hiring laws, and contractor management.
• Permanent establishment risks. This taxation term means that a foreign company has been in a country long enough to be subject to corporate tax paid in the country. To fall under the rule, you don’t need to have an office. Simply generating revenue in the country makes you eligible for local corporate tax. Since remote teams are gaining momentum, governments are particularly meticulous in regulating foreign employer presence in the country. Speaking to a trusted local partner may give you a better understanding of the situation in your destination.

The challenges listed above relate to HR management in the first place. But the list of potential hurdles in going global will not be complete without brand-related issues.

• Brand inconsistency may be difficult to sustain across foreign locations. Even localized, some aspects of branding may be misunderstood or ignored all together.
• Communication, despite an overall increase in DEI, may not be smooth in the beginning. There are of course differences that will smoothen out as time passes, but on the onset they may be an issue. The business needs to be ready to adapt to these changes, live with them and internalize foreign norms to operate successfully.

Depending on your vision of the future for your business, you may turn to one of these methods of hiring globally. They have their upsides and shortcomings, but in the long run they atone with the goals set.

Hire independent contractors. One way to kickstart your international expansion is to hire individuals that possess necessary skills not found among your local team. Cost-wise, a contractor is cheaper than a full-scale employee. It is also a lot easier to get in touch with a contractor via multiple freelance and contractor management platforms available today.
Pros. Contractors normally work on project basis, meaning they expect to complete a task and move on. By joining forces with a contractor, you may quickly and painlessly try waters and give up if it is not worth it. Effort put in finding an overseas contractor is immeasurably less than fully onboarding a foreign employee.
Cons. In some countries, there is a restriction on how much time a contractor can give to a project. Once the limit is exceeded, a company needs to classify the contractor as its employee. In other countries, however, the status must be clearly stated in the contract and further proved with appropriate money transfers, so they don’t look like salary payments.

Setting up a local entity. If you are serious in your international ambitions, then opening a full-scale office in compliance with local laws and regulation is an option. A similar option is to open a foreign subsidiary, also known as a daughter company. It is partially or entirely owned by a parent company, i.e. your local business.
Pros. Having a brick-and-mortar office in your destination adds a lot to your brand awareness and trust. Being present in the community you wish to enter shows determination which further adds to your trustworthiness in the business community.
Cons. As beneficial as it is, establishing a legal entity or a subsidiary is a huge investment. It does require money to get everything in order. Besides spending, the process will really test your organization skills, as anything and everything in the new entity will need to be organized and built from scratch.

Relying on an EoR. Employer of Record, or EoR, is a popular solution for companies that want to hire internationally without having a presence in a destination. Working with an EoR enables you to hire immediately without your own HR, Legal and Finance. All their tasks are on the local EoR agency.
Pros. Hiring with an EoR protects the business from risks it might have encountered if it opted for hiring on its own.
Cons. While EoR may seem the fastest hiring tool, sometimes the process is rushed, thus leading to mistakes. Also, when an outsource HR team manages your staff, it may be problematic to find an employee fast, when there is a need to supplement a team ASAP.

Going for a global payroll solution. This service helps organizations pay their remote workers, contractors and freelancers. Unlike a regular HR team, global payroll solutions have developed logistics to deliver salaries, as well as resources to overcome challenges that accompany remote payroll.
Pros. One important advantage of a global payroll solution is how time saving it is. Complex processes of payments are time-consuming, so if you can boil them all down to a simpler operation, you will free up resources for what really matters in your business.
Cons. Outsourcing payroll payments may bring the company to paying for unwanted services. Some tariff plans require that clients pay for additional procedures that you do not actually need. Additionally, outsourcing any process means losing control to some degree. So there needs to be strong communication between the business and the solution.

When considering the endeavor of global recruitment, it is crucial for HR managers and employers to be well-versed in the intricacies of visa issues and the potential risks associated with hiring foreign talent. Employers need to comprehend and adhere to the intricate visa requirements for each country in which they aim to expand their workforce, ensuring a seamless transition for their prospective employees. Failing to navigate visa issues with due diligence can lead to delays, setbacks, and even the loss of potential talent.

Visas play a pivotal role in the global job market by serving as the gateway for skilled individuals to contribute to international workforces. For foreign job seekers, the prospect of securing a viable visa is a fundamental determinant in their pursuit of job opportunities abroad. The challenge can create uncertainty, hindering the smooth execution of a hiring process and potentially deterring top-tier global talent from applying for job opportunities.

When venturing into global hiring initiatives, foreign employers should be aware of the potential risks associated with visa-related issues. Compliance with visa regulations is not just a matter of legal obligation, but also a strategic imperative for organizations. Underestimating the importance of visa compliance and relevant regulations can expose businesses to legal implications, financial penalties, and reputational damage. This can be especially detrimental for organizations expanding their operations to countries with stringent visa regulations and complex immigration procedures.

Mitigating the risks stemming from visa complexities requires a proactive and holistic approach. Establishing robust communication channels between HR, legal counsel, and external immigration experts is essential in navigating the ever-evolving landscape of global visa regulations. Furthermore, it is imperative for HR managers to invest in comprehensive training programs to foster a thorough understanding of visa-related matters within their teams. This proactive approach ensures that any potential job candidates are provided with accurate and reliable information regarding visa requirements and procedures.

Are there any alternatives to EoR? After all, if you are a startup that just wants to get a taste of the international market, paying a considerable sum for several monthly salary payments may be expensive. Although EoR doesn’t require a minimum number of employees, the solution may still seem complicated.

That’s why small and medium businesses should turn to the freelance management platform EasyStaff. The platform operates globally, no exception. The feature can really help you go global for as little as possible — a small commission per payment without any additional fees.

Basically, EasyStaff is a European company that positions itself as a B2B partner managed through a single B2B contract. It means that for any task or job, on paper EasyStaff is the contractor. Once you send money to the platform, it further sends it to the actual contractors and employees you work with. Thanks to EasyStaff being a European company, there is no need to pay VAT. The commission charged per payment depends on tariffs chosen by clients. Based on the tariff, withdrawal opportunities for contractors are different.

To receive money, contractors can use multiple withdrawal opportunities, such as direct bank card transfer, bank account transfer or via cryptocurrency. Where the contractor is doesn’t matter, as EasyStaff can transfer money to any country. Closing documents are available instantly in personal accounts to both contractors and clients.