The international hiring process is a tangled web of complications that creates barriers for many companies seeking global expansion. Outside of recruiting talent in a new, unfamiliar market, businesses need to navigate compliance, remain flexible, and manage time.
We help clients manage issues with hiring overseas on a regular basis. It’s our goal to guide companies down the right path to get the international hiring process right, which is why we’ve put together tips to get you started.
Challenges of the International Hiring Process
Hiring talent overseas is challenging for reasons you may not automatically suspect. Outside of the typical barriers like language and culture, hiring overseas deals with regulatory requirements and important expectations. Let’s explore these areas and discuss what you can do to succeed.
Companies around the globe are changing how employees work. Whether it’s promoting remote policies or offering options for international workers to see their families in their home country, businesses need to be flexible to retain talent.
For example, according to a PwC study, more than 20% of companies are encouraging commuter policies for employees that work overseas. Essentially, these employers are allowing managers to fly back and forth between their home country and the country in which they work to spend time with their family. This prevents a total relocation and uprooting for the team member’s family. Many employees view this as a huge benefit. The 20% of employers practicing this policy is a significant increase from just 8% in 2002.
This increase shows that it’s becoming more and more important for international employers to remain flexible and work with their team members to understand the benefits and policies they desire. Staying flexible is absolutely necessary to stay competitive in the international hiring process.
Timing is Everything
If your company is in the process of preparing for a global expansion, you’re probably eager to start recruiting talent in the new country. The enthusiasm is great, but it’s important to know that it’s likely going to take a few months to determine your target market, learn about employee regulations, and actually start the recruiting process. The international hiring process is one that you do not want to rush.
In addition to regulatory requirements, it can take six to eight weeks in some countries to get decisions on work permits and visas if you’re thinking about bringing talent with you overseas.
One way to reduce time to market is by using an employment vehicle such as an Employer of Record. International Professional Employer Organization (PEO) and Foreign Subsidiary as a Service (FSaaS) are third-party companies that manage your international operations and employees in your new country on your behalf. One of the largest benefits is recruiting talent faster. If your company uses an EOR service, you can attract talent and be able to hire them. If you need to wait for your subsidiary to process, you could lose that team member if they find another opportunity during the waiting period.
EOR options help your company establish a legal presence more quickly than if you opted to set up a foreign subsidiary, which could take more than six months and cost your company thousands of dollars. EOR services are also a great international hiring process option for employers that are new to the market because it reduces risk. For example, if your company doesn’t find success in the market, International PEO and FSaaS allow businesses to leave the country without having to deal with the complications associated with a permanent subsidiary.
Flexibility and timeliness are very important in the international hiring process, but it’s easy to argue that compliance is the most important factor. Managing compliance in the international hiring process is difficult. Rules and regulations vary from country to country and it’s a lot to manage for midsize companies.
For example, employers are responsible for all benefits withholdings, taxes, mandatory bonuses, and contract requirements overseas. That’s obvious, but what gets tricky is the variances from country to country. Many markets have nuances that are not always obvious and if you’re not an expert in the local labor laws, you may miss an important requirement. A big complication, for example, is termination restrictions. In many international markets, employers need to give employees an allotted amount of notice before ending employment. Basically, at-will employment doesn’t exist overseas.
International PEO and FSaaS help international companies manage compliance. That is one of the biggest benefits of the services. These EOR services take care of a company’s payroll, entitlements, withholdings, and taxes. Companies are still responsible for day-to-day management of responsibilities and employee liabilities, and the EOR keeps them compliant.
To learn about your international hiring options, contact us!