The shift to remote work in recent years has shattered many perceived geographic constraints for companies hiring and managing staff. As a result, employers now feel more confident and empowered to hire top talent from any part of the globe. This allows organisations to focus on skill, mindset and experience when making recruitment decisions rather than location.
According to a 2023 survey by Littler Mendelson P.C., more than 70% of the surveyed employers (in the U.S.) offered hybrid or fully remote work arrangements. Meanwhile, a 2023 report from the Manpower Group revealed that over 55% of companies are looking to hire internationally to overcome the skills gap they face.
However, international hiring presents some unique compliance and employment complexities. We explore the key factors your HR team should consider when hiring international employees.
The benefits of hiring international employees
Expanding your talent pool beyond national borders can lead to various benefits, including fresh perspectives, innovative ideas, and enhanced productivity. Let’s outline some of the key advantages of embracing international talent.
Access to a wider talent pool
Hiring internationally can help you unlock a wealth of diverse skills, unique problem-solving approaches and uncommon insights, fuelling the growth of your business. Having access to a worldwide talent pool will also make it easier to find workers with highly specialised skill sets, which may be in short supply in your home country. Furthermore, since certain countries have lower costs of living than others, international hiring can help reduce your labour costs while still attracting the top talent in your field.
Market-specific knowledge
Hiring local talent is a must to grow your business in a new market and build trust quickly. Local employees can offer much-needed language skills and an intrinsic understanding of the country’s business customs and etiquette. This cultural understanding will help expedite the process of building trust with local authorities, suppliers and customers.
It’ll also signal your commitment to the country and understanding of its unique needs, which can be a shortcut to local credibility. Additionally, local employees will have established professional networks and valuable industry contacts that you can take advantage of to easily build your business in the new country.
Read more in our guide to global expansion in 2024.
Enhanced diversity
According to Forbes, companies employing executive teams with greater cultural and ethnic diversity were 33% more likely to yield higher-than-average profits over the long term. If you want to bring in fresh ideas to enhance your company’s competitive edge, hire a foreign worker (or team) to bring experiences and viewpoints that are not common in your country. These new perspectives might be just what you need to remove a bottleneck in your business.
Company culture
Hiring international employees is a good way to foster a vibrant and dynamic organisational culture, which promotes a global mindset, creativity and open-mindedness. Such a positive workplace culture – and exposure to diverse perspectives – will make your local and international staff feel valued, motivated and connected to their teams. In turn, this will lead to increased job satisfaction and staff loyalty, lowering the churn rate.
Lower reliance on local teams
Building strong local teams can help your business better understand your home market and foster positive community relations. If the business is solely reliant on these local teams, it can limit the diversity of ideas and expertise. This will hamper innovation and narrow the scope for new and creative problem-solving approaches. Consider hiring international talent to lower this dependence and enhance the company’s ability to navigate new markets and unforeseen challenges.
Increased productivity
Hiring international workers can accelerate the delivery of time-sensitive projects. Benefiting from diverse time zones, an international team can work round-the-clock on an urgent project, completing it faster than a solely local workforce.
Plus, recruiting internationally often involves remote work. According to a report from TalentLyft, 77% of employees working remotely have reported an uptick in productivity.
Key HR considerations when hiring international employees
Despite its many benefits, hiring internationally does come with certain challenges. To address them effectively, TopSource Worldwide brings you 5 key considerations for your HR team when recruiting international employees.
1. Understanding cultural differences
Addressing cultural and language gaps is essential for smooth collaboration in a global team. People from different countries have a wide range of customs, expectations and social norms. Some of these differences are easy to spot, like differences in dress code and styles of greeting. Others are more subtle, such as attitudes to hierarchy and authority figures, risk tolerance, work-life balance and approach to conflict resolution.
To ensure these differences do not impede effective teamwork, your HR team must establish clear communication platforms, tools and protocols. Prioritise clarity in all internal communications and avoid jargon wherever possible. Additionally, conduct cultural sensitivity workshops to enhance mutual understanding between workers from different countries.
If you want to minimise the risk of missteps, you can read our blog on the topic: Avoiding the 5 Common Pitfalls of International Expansion.
2. Legal and compliance matters
Staying compliant with local labour regulations and tax laws is one of the key challenges of hiring workers overseas. Here are steps you can take to avoid compliance errors (and the associated legal issues):
- Classify workers correctly, avoiding misclassifying employees as contractors (or vice versa).
- Familiarise yourself with the local regulations regarding sick leave, paid vacation, termination, contracts, bonuses and work hours.
- Secure the necessary visas and permits for any employee relocating to a new country for their work.
- Comply with the local regulations regarding tax withholdings, bonus payments, pension contributions, etc.
- Stay abreast of any changes to these regulations.
Navigating international compliance requirements can be risky and time-consuming. To save time and mitigate risk, consider working with a trusted global HR solutions provider like TopSource Worldwide, which has helped over 1600 businesses across 180 countries expand beyond their borders and into new markets.
3. Global benefits and compensation
Providing relevant and inclusive benefits is vital in today’s hybrid working era. Here are some tips for designing a successful employee benefits and compensation package for an international workforce:
- Understand local labour laws and employment regulations, including equal employment laws, collective bargaining and discrimination protection laws.
- Offer attractive, competitive packages by researching local job market dynamics, cost of living, talent pool, government policies and competitor offerings.
- Properly classify all international workers according to local laws. The benefits a worker is entitled to will differ depending on whether they’re a freelancer, part-time or full-time employee.
- To attract top talent, make sure your company’s compensation packages align with key performance indicators (KPIs), business objectives and performance reviews.
- Ensure your bonus cycles, pay schedules and annual performance reviews are transparent and predictable.
The goal is to attract and retain the best local talent while abiding by all local employment laws and payroll compliance regulations.
4. Vetting international employees
In vetting international job applicants, assessing language skills through tests or language interviews is key to ensuring team compatibility. Global background checks, facilitated by experienced global HR service providers, are essential for verifying candidate histories, and overcoming language and record-keeping variances.
Additionally, interviewers should be trained in recognising cultural differences in communication, such as gestures and negotiation styles. This understanding is crucial for attracting diverse talent and maintaining fairness and objectivity in the evaluation process.
5. Technology and security
Fostering trust and promoting a seamless workflow for your international hires is essential for productivity, which you can achieve through robust tech solutions and data protection measures.
Here are some effective ways to use technology to safeguard sensitive data and build a resilient, globally connected workforce:
- Make use of encrypted channels for all internal communications, including calls, messages, and file sharing between your domestic and international employees.
- Grant international workers access to data, tools and systems based on their specific roles, minimising the risk of security breaches through the principle of least privilege.
- Provide thorough cybersecurity training to all your international employees, keeping them abreast of company security policies, international data privacy regulations, common scams and secure password practices.
Developing a formal company-wide cybersecurity policy that can be shared with international hires during onboarding will help speed up this entire process.
Summary
We hope this article has given you a good overview of the key considerations when you’re hiring international employees. You can ensure a stress-free and positive experience for your international employees by investing in key areas such as legal compliance, effective cultural integration, inclusive employee benefits and proper implementation of data security measures.
This will help the business flourish, providing access to a wider, more diverse talent pool, enhancing productivity and fostering innovative ideas and problem-solving approaches.
Outsourcing the process of hiring global talent
Do you need help navigating the complexities of hiring international employees and managing a global workforce? Have you considered outsourcing responsibilities to a trusted global HR solutions provider?
TopSource Worldwide’s global entity management, EOR and payroll solutions are designed to help businesses expand beyond the borders of their home country.
Whether you need help setting up a legal entity in a new country, managing payroll for international employees or staying abreast of changes in local regulations – we can do all that and more!
Our experts have years of experience helping businesses with global expansion across over 180 countries. We can take on all the challenges of recruiting and supervising global staff, freeing up your in-house team to focus on core business functions.
Learn more about our services and offerings and see how we can support your business.
