Business

What to Know About Hiring Remote Workers Overseas

What to Know About Hiring Remote Workers Overseas

Talent acquisition used to be a local matter. If you needed to hire new employees, you were mostly limited to the professionals found in your city. The result was companies headquartered in major urban centers in order to tap into as big a talent pool as possible.

Then internet access became a ubiquitous feature of the modern world. Suddenly, it became theoretically possible to hire someone thousands of miles away. So long as the work could be done on a computer, it was conceivable that you could have a workforce scattered around the map.

While hiring remote workers within the same country is pretty straightforward, things get a little complicated when it comes to hiring remote workers overseas. With this in mind, let’s take a look at several factors that go into having an international workforce:

How to Hire Workers Overseas

Generally speaking, there are three ways in which you can go about hiring remote workers in other countries. Since the most practical option depends on the situation, knowledge of these options will help you reach the best decision.

Setting up a legal entity

The traditional method of hiring workers overseas involves what is known as setting up a legal entity. Also known as a foreign entity, it essentially means your company establishes a presence in another country. This enables companies to have near-autonomy, but it’s also expensive and time-consuming. An intimate understanding of local laws and customs is also essential.

Working with an employer of record service

Partnering with an employer of record service is becoming an increasingly popular option for several reasons. Top-level employer of record services essentially act as conduits between U.S. companies and their overseas labor presence. They have the knowledge, resources, and connections that most companies lack. That makes EoRs a practical option for companies with limited budgets and experience hiring remote workers.

Hiring independent contractors

Opting for freelance contractors has become a common approach to managing talent within the United States. The same approach can be done on an international scale. The benefits of hiring international contractors include lower costs, greater convenience, and more flexibility. That makes this the ideal choice for companies prone to scaling up and down from one quarter to the next.

What to Know Before Hiring Workers Overseas

A general understanding of your options is only the first half. The next step involves making sure you do everything by the book. Failure to do so could lead to tax debt, fines, and even the closure of your business. Here’s a basic breakdown of what business leaders need to know about hiring remote workers overseas:

Labor laws

Labor laws vary from one country to another. Failure to abide by a nation’s laws regarding workers’ rights and compensation can spell disaster for your business. With this in mind, it’s essential to formulate a firm understanding of the legal framework surrounding your remote workforce. This can be done with in-house specialists or outsourced professionals like those found at EoR services.

Payroll processing

There are several great payroll processing platforms your company can use to pay workers overseas. However, the lawful setup and contributions depend on the country. Similar to the risk your company faces in violation of labor laws, a failure to properly account for payroll specifics can lead to hefty fines and other costly setbacks.

Potential misclassification

U.S.-based companies that treat independent contractors like employees are subject to aggressive laws covering misclassification. The same rules can apply to an international team of remote contractors. Again, it comes down to the country’s laws and regulations governing these matters.

Modern businesses have the potential to tap into a global talent pool. It depends on the practicality of doing so, as well as the way in which they go about finding, hiring, and managing their remote workforce. A careful study of all factors involved – or the decision to partner with an outside company that specializes in that sort of thing – will prove essential in ensuring your efforts are what’s best for your business going forward.

About the author

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Mike K. Watson

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