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Also read: How to Hire for the Future of Work
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What are the benefits of recruiting globally?
Despite large upfront costs and compliance risks associated with international expansion, companies can reap enormous benefits from hiring a global talent base. For example, companies can increase productivity and reduce costs by hiring international workers in countries where labor is cheaper.
In addition, global talent brings unique perspectives to a company by virtue of their different lived experiences, cultures, and traditions. As a result, companies can garner unique solutions to problems and spark company innovation.
Ultimately, companies must compare the risks and rewards of hiring internationally before expanding globally, as a faulty global recruitment strategy could do more harm than good to the company’s brand.
What are the challenges of hiring employees internationally?
In addition to competing labor laws, cultures, customs, and taxation regulations, companies will likely encounter numerous additional challenges that make hiring in another country difficult:
- Reconciling costs for setting up foreign entities or subsidiaries or working with a PEO or EOR.
- Budgeting effectively for international recruitment, including international job board postings, purchasing recruiting software or upgrading existing HR tech, and hiring more recruiters
- Crafting equitable, competitive, and culturally appropriate global compensation and benefits strategies.
- Ensuring correct currency conversion rates and pay scales per country.
- Communicating with international teams in differing time zones.
- Understanding employee classification laws and other labor regulations that vary by country.
- Competing for talent at the local level and from other global companies.
Free global hiring checklist
If you’re looking to hire staff in another country, our global hiring checklist ensures your company follows every step in a successful international talent search. Open the template in your preferred file format via one of the buttons below.
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Considerations before hiring international employees
Before hiring in other countries, consider these factors to increase your chances of hiring success.
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Labor laws and compliance
Countries have their own unique labor laws that govern work hours, severance payments, workplace health and safety, and other work conditions. U.S. employers have a duty to investigate and adhere to these rules even if this conflicts with the company handbook or means employees in the U.S. receive different treatment.
To navigate the legal requirements of hiring employees in other countries, a company can work with a professional employer organization (PEO) or global employment organization (GEO), also known as an employer of record (EOR). These entities provide on-the-ground resources and services to ensure a U.S.-based employer remains compliant when hiring international employees.
Recruitment
When hiring outside the U.S., a company first needs to decide whether to hire independent contractors or full-time, benefits-eligible employees. This decision depends on the nature of the work that a company wants an international employee to perform and how quickly the company wants to fill roles.
Contractors are defined differently based on the country. Therefore, in order to avoid legal issues, a company still has to ensure that international independent contractors are not legally defined as employees under foreign labor laws.
Otherwise, recruiting full-time employees internationally can take up to six times longer than doing so domestically, so don’t expect to fill roles right away.
However, there are some things businesses can do to accelerate the process. Global job boards like Indeed, Monster, and ZipRecruiter help companies find great talent because they have databases of candidates looking for work at international companies.
Some pre-employment testing software solutions like Predictive Index (PI) help companies assess the skills of international job candidates. PI includes assessments in over 70 languages, preventing language or cultural barriers from getting in the way of finding talent.
Also read: 9 Employee Recruitment Strategies to Improve Your Hiring Process
Payroll
When hiring internationally, U.S.-based companies face a number of challenges around paying employees accurately, timely, and securely.
To ensure accuracy, the company must collect the right kind of information from new employees. Solutions like Rippling have customized forms that collect the necessary data from international employees. For example, a new employee in India will enter their Universal Account Number instead of their Social Security Number.
Investing in a solution that handles international payroll means employees get paid in a timely and secure manner. Relying on bank transfers or money portals like PayPal can spell delays, processing fees, and security threats from hackers.
Need a solution that handles global payroll? We suggest Rippling, Paylocity, and ADP.
Also read: How to Pay International Employees
Benefits administration
To compete for international talent and remain compliant, a U.S.-based company will have to adjust their benefits offerings and time-off policies for employees in other countries.
Depending on the country, there might be stipulations regarding the following benefits:
- Health and medical insurance
- Paid holidays
- Vacation, sick leave, and parental leave
- Pension contributions
In Ireland, for example, most employees are entitled to four weeks of paid leave each year. Also, while paid parental leave is not required by employers in the U.S., international employees, on the other hand, may be entitled to guaranteed paid leave that U.S. employers must grant. Birthing parents in Canada, for instance, are guaranteed at least 15 weeks of paid leave.
Also read: How to Navigate Employee Holiday Time Off
Cultural differences
Hiring employees in other countries requires cultural competence, as it increases the chances of filling roles from abroad and maximizing the benefits of a diverse workforce.
Communication
One of the most important aspects of hiring international employees is communication to avoid any misunderstandings. Because of different cultural expectations around hiring, recruiters must explicitly state information that should or should not be included in applicants’ resumes and cover letters.
For example, professional headshots don’t figure in the U.S. job search, but job applications in Germany typically include these. Companies mitigating hiring bias and hiring in Germany, for example, should explicitly tell applicants to forego photographs in their applications.
Conversely, applicants from some cultures may shy away from highlighting individual accomplishments in their cover letter or during the interview because, to them, it appears boastful and arrogant. U.S. employers seeking this kind of information should encourage or require international applicants to share their achievements.
Biases
It’s also important to prepare and train the domestic workforce, including recruiting and hiring personnel, in order to address and break down stereotypes and unconscious bias. This helps cultivate a more welcoming work environment and positive onboarding experience when the first international employees join the team.
Training and ongoing company communication should focus on cultural awareness, so employees are educated on similarities and differences among cultures. For example, managers should be encouraged to allow their international direct reports to honor observed holidays in their country to demonstrate cultural sensitivity and respect.
Work schedules
On the job, managers and co-workers should be mindful of international employees’ work rhythms, time zones, and rituals. For example, a typical workday in some parts of Spain and Italy may still include a siesta or riposo, respectively, which is an afternoon break that can last a few hours. So, a company may delegate certain tasks to different time zones or set up a split schedule for employees in a country whose culture shuts down for some time each afternoon.
Start hiring international employees
There are several important factors to keep in mind when hiring international employees. Given the popularity and convenience of remote work, U.S. companies can tap into international talent to fill high-demand, hard-to-fill roles. However, they need to follow other countries’ laws regarding work conditions before reaping the rewards of hiring in other countries.
Check out our Top HRIS Solutions for recommended software that helps you keep track of data for domestic and international employees while remaining compliant.
1 Justworks
Justworks makes it easier to start, run, and grow a business by giving entrepreneurs and their teams access to big-company benefits, automated payroll, compliance support, and HR tools in one simple platform. Using Justworks means that you can focus on what matters most – running your business. Justworks also offers access to ancillary benefits like 401, life/disability insurance, workers' comp, and more, all seamlessly integrated into the platform. The best part? Justworks offers 24/7 support.
2 Rippling
Rippling is the first way for businesses to manage all of their HR, IT, and Finance — payroll, benefits, computers, apps, corporate cards, expenses, and more — in one unified workforce platform. By connecting every business system to one source of truth for employee data, businesses can automate all of the manual work they normally need to do to make employee changes.
3 GoCo
Elevate your HR with a modern, easy-to-use HRIS designed for small businesses. GoCo is a secure, compliant hub for sending, digitally signing, and organizing your sensitive HR documents and data. Manage records, performance, time off, onboarding, benefits, and more – all in one place. With the best support in the industry, every GoCo customer is assigned a dedicated Customer Success Team that is readily available to provide guidance and ensure a smooth and reliable HRIS experience.
