Global Hiring Options for Growing Companies

In today’s globalized economy, expanding your team across borders offers unparalleled opportunities for growth and innovation. But navigating the complex landscape of building and managing an international workforce can be overwhelming. Companies must understand diverse labor laws and effective recruitment strategies that resonate across cultural divides.

This global hiring guide will provide actionable insights to develop a strategy that will work best for your business. We will discuss the four main options for building your international workforce:

1. International recruiting

2. Entity establishment

3. Global PEO

4. Independent contractors

Recruiting international candidates is all about customizing the experience for qualified individuals. Businesses need to attract top talent in new countries while respecting the cultural nuances and expectations. Because every country has a unique talent pool, it’s critical for your business to understand where to find the perfect fit for your operation.

Related: 7 benefits of using an overseas recruitment agency

For instance, countries like Columbia, Poland or Vietnam are well known for their cost-efficient tech talent. In other countries, you might only need a local sales team to establish a customer base for your products and services. Understanding the local hiring landscape will help you recruit the best possible candidates for your needs. Here are a few questions to consider as you look into a new market:

· What is the average level of education?

· Are there degrees that these people specialize in more than other regions?

· Do these workers have experience with international operations?

· What is the unemployment rate for the workers you need?

The more you understand the culture of a foreign workforce, the more success you’ll have with finding qualified workers.

Tips for international recruiting success:

1. Localize the job description: Don’t use generic job descriptions or offerings. Take the time to understand your talent market and localize your information. This will establish a great first impression with your candidates.

2. Cater to their location: Be aware of the candidate’s time zone and language. Showing a candidate that you care about their time is a great way to establish mutual respect.

3. Offer competitive compensation packages: Sometimes it takes more than generic salary benchmarks to win over the right candidate. Understanding the supplemental benefits that appeal to specific countries will set you apart.

Foreign subsidiaries are the foundation for hiring a global workforce for long-term growth. Businesses cannot hire directly in another country unless it is through an established legal entity. This process takes time and expertise, but it is a reasonable strategy for building a global workforce. Before you set anything up, be sure to test the new market to ensure the investment is worth it.

A legal entity will give your business full control over hiring, compensation, terminations and compliance. This means you are responsible for all legal obligations regarding the employment laws and taxation requirements for each foreign entity.

Related: Top 6 Tips for Hiring International Employees

Additionally, you will need to determine how best to structure your subsidiary. The last thing you want is an inefficient tax structure or multiple countries competing for tax revenue. If you decide to hire through your own legal entity, just keep in mind the additional time and effort it will cost upfront.

Tips for successful entity setup:

1. Work with global expansion experts: A DIY approach for entity setup could create more problems than solutions. Expansion experts can facilitate the process and ensure all the in-country guidelines are met.

2. Do the research: Because entity establishment is seen as a long-term hiring strategy, make sure the new market is stable. The process of withdrawing from a country can be just as complex as starting there.

3. Understand the setup time: Creating an entity could take anywhere from six months to a year to fully incorporate. Depending on the complexities of the country’s laws, it could even take longer. Understanding this will give you time to set up any other necessary business functions in the meanwhile.

Professional employer organizations (PEOs) are great for businesses seeking flexibility and scalability in their global expansion. Partnering with a global PEO can streamline international hiring, allowing businesses to onboard employees in multiple countries without the need to set up legal entities. The PEO provider handles all the administrative requirements to comply with local laws and regulations.

This is often the best global hiring option for rapidly growing companies. It gives businesses the opportunity to test new markets, without committing a huge investment. It also allows them to scale quickly across multiple regions, without worrying about the hassle of global compliance. Businesses manage the day-to-day tasks of the employee, while the PEO handles all the HR and payroll for the workforce.

Tips for partnering with a global PEO provider:

1. Review their global footprint: Make sure your PEO provider has entities set up in all the countries you wish to expand to. Otherwise, you may end up working with multiple in-country partners, which can quickly become cumbersome to manage.

2. Determine their hiring speed: How fast can a global PEO hire a candidate in your target country? For fast-growing companies, speed is essential in acquiring the best talent for your global operations.

3. Understand their experience: The longer a PEO has been operating, the more experience they’ll have with navigating and overcoming global challenges. You’ll want a partner that has the expertise to help you excel in any country.

Although independent contractors don’t require a legal entity to hire, they come with substantially more risk to a business. Many businesses choose this route because they don’t have to pay taxes or benefits for the worker. But if they violate local labor laws, the fines and penalties could be far worse. Additionally, you will have far less control over their schedule and communication preferences, which can sometimes hamper growth.

Related: Independent contractor compliance? It’s kind of a big deal

Contractors must provide specific and specialized services to a client on a project or fixed-term basis. In many cases, these workers are working with multiple clients on multiple projects at any given time. This makes long-term growth very difficult to maintain.

Tips for hiring independent contractors:

1. Understand the local employment classifications: Even something as simple as extended hours spent on a project could result in a contractor suing for benefits and additional compensation. Ignorance is not a valid excuse, and most courts will side with the workers in these cases.

2. Avoid too much management: As frustrating as it may be, you can only assign tasks and deadlines to a contractor. Excessive communication or management or performance meetings could result in a misclassification risk.

3. Learn the retention regulations: Some countries do not allow companies to hire contractors for long periods of time, even if they are working with other clients. For example, Australian contractors have a two-year limit before they must be transitioned to full- or part-time employment.