Gone are the days when employers had to rely on employees working from the same office or the same country. Modern companies are hiring international remote workers to stay competitive in the market. Employees are also ditching the traditional way of doing things, with 61% preferring to work fully remotely.
Hiring international employees has multiple benefits for your company, such as giving you access to a broader talent pool, increasing diversity, improving creativity and innovation, and enhancing your reach to international markets.
However, it also comes with various challenges. You have to maintain compliance with the employment and tax laws of the countries you’re hiring from, handle payroll obligations, and provide competitive compensation and benefits that match the expectations of your global employees, among other things. To make the entire process of hiring international workers easier and hassle-free, many companies choose to partner with global employment and payroll platforms like Skuad.
Critical factors that your global employer should cover
All global employment organizations are not the same. Some have more experience in hiring across international markets and are better suited to handle your payroll needs than others. Below are some factors to consider before hiring a global employer to ensure you get the right one.
The foreign country you’re hiring from has its employment laws, tax codes, and other regulations that your company must follow to stay compliant. As such, you want to work with an Employer of Record platform that can guarantee global HR compliance.
For example, if you’re hiring employees from any European Union (EU) country, you must comply with the General Data Protection Regulation (GDPR). GDPR violation can result in heavy penalties; a recent example is British Airways potentially facing a fine of £ 183 million for such a violation. A global employer helps your company to comply with GDPR and other relevant regulations.
To ensure global payroll compliance, the global employment organization must have a local presence in each country you've hired from. It should have local entities in those countries or in-country partners to handle compliance on its behalf.
In some countries, compliance regulations vary across regions. Without a local presence, it becomes challenging for the global employer to know all the regulations that affect your company and keep up with changes in legislation.
Apart from running a local entity, other activities that your global employer may need to do to ensure compliance include:
- Register as an employer with local tax authorities
- Process and run local payroll
- File employer and employee payroll taxes
- Process payments to employees and the relevant tax authorities
- Offer statutory benefits to your global workforce
- Advise your company on any changes in labor and tax regulations
Partnering with an employer of record (EOR) or a professional employer organization (PEO) requires that you grant the third-party organization access to sensitive employee information. This includes employee names, addresses, salary and tax information, family status, etc. Hence, you need to ensure you can trust the global employment organization you choose to keep data safe and secure.
Whether or not you can trust the global employer will depend on the measures they’ve put towards data protection. Ask questions such as:
- Where are the servers that store the data located?
- Is there any data recovery plan?
- Does the organization have threat detection systems?
- How are web transfers done, and are they safe?
Partnering with a global employer that can keep your data safe isn’t only crucial for protecting sensitive information and grants you peace of mind when hiring international workers. You are confident the systems are always intact and don't have to deal with breaches constantly.
Consider working with a global employment organization that offers automated payroll systems to make the process of hiring, onboarding, and managing international employees quick and hassle-free. Instead of making manual payments to each remote worker, you can make payments to all of them using a single click. Also, you don’t waste time analyzing data or reporting, as the software platform or tools can handle these processes.
On top of having automated systems, the global provider you choose should have proper human support. If the systems are down or you need some clarification on a document, it helps to have a responsive partner that can answer your questions promptly and provide timely support.
Chances are you have an idea of the countries you’d like to hire remote workers from. If that's the case, ensure you partner with an EOR covering those countries. If an EOR doesn't have a network reach in the countries you're hiring from, it may be unable to help you.
If you’ve not decided on the countries you want to hire from, the best thing is to partner with an EOR with a wide global presence and network reach. That way, you’ll have a wide variety of options when you decide to expand your workforce.
Experience and knowledge
Your global employer should have vast experience and knowledge of global payroll and operations. Hence, ensure the EOR or PEO you choose has successfully helped other companies to hire international employees. A good track record assures you that the global provider is conversant with the practices, culture, and regulations of different countries.
Ideally, the global employer should also have a good track record of working with businesses similar in size to yours. If an EOR has only partnered with very small enterprises or startups, they may not be prepared to handle international payroll for a big company hiring multiple remote workers worldwide.
Away from international payroll, the global employer should be fully conversant with the employment and tax regulations in your home country. Your country may have specific rules and regulations to guide the process of hiring remote workers abroad. An experienced EOR will help you comply with these regulations as well.
Your company has its own culture and policies. And the same case applies to every global employment organization. Unfortunately, there may be cases where your policies need to align with the policies of the global employer. For example, your company may be used to offering additional benefits, like an end-of-year bonus, to your staff or paternity leave to your male employees. However, the EOR you're working with may have yet to offer such benefits.
A reputable EOR should be flexible enough to allow your organization to maintain its values and standards. Its global payroll services should be tailored to suit your specific needs. Ultimately, your company can expand its workforce without losing its culture.
There are instances when the EOR may need to be more flexible. An example is when your company policies or practices are not aligned with the laws and regulations of the country you’re hiring from. In such a case, you may adjust your company's policies to avoid compliance issues and ensure a smooth partnership with the EOR.
Easy-to-use payroll platform
Handling payroll can be daunting and time-consuming, especially for a company hiring workers worldwide. About 40% of small business owners indicate that payroll and taxes are their worst and most consuming aspects.
When you hire a global employment organization, you get access to an automated payroll platform to help you manage aspects such as:
- Compensation and benefits
- Payroll and pensions
- Employee reimbursement and expenses
- Termination and liability
However, to enjoy the benefits of an automated payroll system, it should be user-friendly with a simple, easy-to-use interface. This lets you quickly send accurate information to your remote workforce, enhancing the employee experience. The employees can also use the platform to access their employment information or download tax documents, pay stubs, and more.
Here are some key features of an easy-to-use payroll platform:
- A dashboard that allows easy data analysis and reporting
- Predictable pricing without unexpected fees
- Tools to manage extra services like employee schedules, time and attendance tracking, paid and unpaid leaves, and bonuses.
- Built-in reports to enable easier data generation when filing taxes
- Employee self-service and cloud-based access
The right solution – Skuad
If you're planning to build a team of international employees, there may be better options than handling the entire hiring process alone. You must establish local entities and then keep up with regulations from different countries.
Skuad is a global employment and payroll platform that enables organizations to compliantly hire and onboard employees in over 160 countries. Whether hiring full-time employees or contractors, you can rely on Skuad to help you hire, onboard talent, manage payroll, and ensure compliance with employment and tax laws in your chosen countries.
In addition, Skuad provides an automated payroll platform to reduce manual labor and potential errors and improve the overall efficiency and effectiveness of your global workforce management functions. You can access all employee data in the unified platform, so you don't have to rely on manual sheets and emails. And if there are any challenges with the platform or your payroll, there is a 24/7 expert support team to help you, allowing your business to continue running smoothly.
Book a demo today to learn more about Skuad's global hiring solutions.