Hiring remote workers in multiple countries has many advantages and challenges. As a company builds its global team, employers must understand their options for hiring international remote employees, as well as the different labor and payroll requirements within each country.
The following guide explains how to pay remote talent in multiple countries and navigate the challenges of paying a global workforce that spans international borders.
Benefits of Hiring Remote Workers
If a company is looking for specific talent and skill sets, they are unlikely to find the most qualified employees in one convenient location. Some of the best talent may be found in other countries. By broadening the workforce search to include remote workers, an employer has access to more talent around the world that fits their exact needs.
Some benefits to hiring international remote workers include:
- Broader access to talent and skill sets
- Workforce across various time zones
- On the ground reps in foreign countries
- Exposure to various languages and cultures
- Expansion of resources and global presence
Challenges of Hiring and Paying Workers in Multiple Countries
While having access to talent in multiple countries is a business-savvy move, many challenges come with hiring and paying workers across international borders.
Hiring employees in other countries requires navigating varying employment laws and unfamiliar payroll regulations. Failure to follow local country labor requirements and process compliant payroll can result in penalties, fines, and difficulty hiring international workers in the future. Understanding the labor regulations of different countries and staying compliant with them is critical to hiring, paying, and maintaining a global workforce.
How to Pay Remote Workers in Different Countries
Deciding where to build a team of international remote workers depends on many factors based on desired skills, available talent, logistics, and budget. Once a company outlines and understands its parameters, there are several options for hiring and paying remote workers in other countries:
1. Engage and Pay Contractors
Sometimes, a company requires additional talent for a specialized service or project but doesn’t want to add full-time employees to their team. Instead, engaging with and paying contractors allows for more flexibility, efficiency, and cost savings. In contrast with full-time employees, a contractor doesn’t need an extensive onboarding period and allows for a simpler payment structure. Engaging with contractors is also a great way for a company to test out a new foreign market for future growth opportunities.
While international contractors are a convenient mechanism for accessing specialized talent when it’s needed, there are still some challenges. Classification laws vary from country to country, and employers must ensure their contractors are classified correctly, or they risk non-compliance. If a contractor is misclassified, the company may be subject to fines, legal fees, and reputation setbacks.
Companies can benefit greatly by having in-country support or resources to navigate what’s needed for paying contractors. For example, a contractor payment solution is an automated payment platform that integrates foreign exchange fees and money transfers that allows companies to pay contractors across foreign markets.
2. Set Up Local Entities and Use Multi-Country Payroll
Generally, a company must establish an entity in a country if it wishes to hire and pay employees there. A company that has set up an entity in one or more foreign countries can outsource a multi-country payroll provider to pay its international employees. A multi-country payroll solution automates payroll, time, and expenses and makes it easier to accurately and compliantly pay a distributed workforce.
However, establishing an entity or branch in another country is a lengthy and expensive process. It might not make sense to set up an entity just for the purpose of hiring remote workers. Typically, entity establishment occurs when a company has broader plans to expand its global business presence.
3. Partner With a Global Employer of Record
If a company doesn’t have entities in the countries where its remote workers are located, or isn’t ready to establish an entity in another country, there are still ways to hire and pay employees in multiple countries. A company can circumvent the entity establishment process by hiring contractors instead or partnering with a global Employer of Record (EoR).
A global EoR has global payroll capabilities and handles risk mitigation, local labor requirements, and compliance in foreign markets. A global EoR is set up to locally hire, pay, and manage international, remote employees on a company’s behalf. A global EoR becomes the legal employer of a company’s supported employees and helps manage their distributed workforce around the world.
Start Paying Remote Workers in 185+ Countries
Hiring remote talent allows companies to target specialized skills and tap into the global market. While there are challenges that come with navigating different labor and payroll regulations in other countries, there are also resources that streamline the process.
Velocity Global connects employers to talent in over 185 countries and 50 United States using a full suite of workforce solutions that help you easily engage, manage, and pay global talent. If you’re looking to engage with contractors, our Contractor Payments solution enables you to engage and pay your contractors across foreign markets. If you already have an entity, our Multi-Country Payroll platform ensures your distributed workforce continues to receive consistent, accurate, on-time payments. And through our global EoR solution, Velocity Global helps you easily onboard, manage, and pay talent worldwide to ensure full compliance from start to finish.
Reach out to Velocity Global today to find out which global workforce solution works for you.