Global Hiring Options

Communication platforms and remote working environments empower companies to go global faster than ever before. Many businesses recognize the advantages of global expansion, such as: 

• Increased revenue potential
• Entry to new markets
• New customer base
• Greater access to talent
• Obtaining competitive advantages

But in order to fully enjoy these benefits, businesses must first understand the global hiring options as they expand. Here are a few options for you to consider as you prepare for global expansion.

International PEO

There can be a lot of risk when it comes to hiring overseas. Using an Employer of Record (EOR) service can help mitigate these risks, while still giving you control. With laws and regulations frequently changing for different countries, it can be challenging to keep track of compliance, legal and tax requirements.

International Professional Employer Organization (PEO) provides services to create legal entities in a target market, which allows businesses to hire local employees. This third-party entity manages all the legal requirements and payroll, while the business manages the international team on a day-to-day basis.

For those seeking to hire their own international employees, an international PEO has the lowest risks and costs of the international hiring options.

Foreign Subsidiary

A foreign subsidiary is when a company located in a different country is controlled by another ‘parent’ company, (i.e. headquarters). This branch operates independently as its own entity, while still being connected to the larger organization. When a majority ownership or control is involved, the investor corporation can guide the business policies, operating decisions and other resources for the subsidiary.

Now it’s important to note that you don’t need to establish a subsidiary in order to hire international employees. In fact, it should be avoided if possible. High cost and effort are the main reason businesses avoid foriegn subsidiaries. It also often limits a business’s ability to exit if the experiment wasn’t as successful as they planned.

Companies operating in the manufacturing or real estate industry would be the exception. Otherwise, we’d recommend one of the other hiring options.

Independent Contractors

Utilizing independent contractors for one-time projects can be very fruitful for a business. Businesses enjoy significant cost savings when it comes to benefit reductions in a short-term setting. However, if you’re hoping to have an employee working long-term, this may not be a great option.

Companies opting to work with foreign independent contractors will need to have strong processes and management. These individuals will need to work autonomously at all times in order to be considered an independent contractor. Businesses will also need to establish in-country agreements, making sure to follow any regulations of the local labor laws.

If this is done incorrectly, labor courts can rule in favor of contractors to receive withholdings and benefits. Even if you have a local agreement in place, contractors can fight for employment status. This can be a costly process, especially if you are subject to pay legal fines.

Business Process Outsourcing (BPO)

Many of us are becoming more familiar with BPOs. Maybe we’ve interacted with customer service and inside sales teams outside of the country. Or perhaps we receive payroll checks from a third-party provider. This is becoming common practice because BPOs essentially  take over tedious daily operations and responsibilities of an entire business process.

Companies with strong, simple processes can typically outsource those tasks. Businesses should be sure to contact multiple organizations. Assess reviews and referrals before choosing the provider that best aligns with your overall goals.