With the mass uptake of remote working over recent years, it’s becoming ever more common for companies to cast a broader net when hiring. After all, why limit yourself to the local job pool when there is a whole world of talent out there?
For anyone interested in hiring abroad without needing to set up a foreign entity, working with an employer of record (EOR) is an increasingly popular option. An EOR hires professionals via its own local entities, taking care of their payroll and administration as part of the service, while those professionals report directly to you, just like any other team member.
There are different reasons to establish yourself on the world stage, including the desire to enter new markets and tap into fresh pools of consumers or clients. It also offers significant cost-benefits, while helping to boost diversity within the company.
Regardless of you motives for hiring internationally, you will need to choose the best employment arrangement for you, based on how many people you want to employ and for how long.
The benefits of building a global presence
For many companies, hiring international employees can be more cost effective than hiring locally, even after factoring in fees earned by providers.
In many emerging markets, growing middle classes provide expanding pools of highly skilled professionals available at highly competitive rates. Many of them are drawn to the prestige of working with an international company.
A multicultural team also brings a wealth of different perspectives and ways of working, offering you insights and ideas that could be beneficial to the organization.
Hiring internationally also offers the benefit of having team members covering a broader range of time zones, making it easier to provide round-the-clock support and service. There may also be more options to visit large in-person business networking events such as conferences and expos.
This will allow you to build a global presence without having to invest lots of time and money in travel and its associated problems. As a bonus, this means hiring international employees could help with your carbon footprint – a growing concern in the modern business world.
Finally, overseas team members offer invaluable insight into new markets, so hiring in one or another country can be a precursor to making a deeper investment.
How to build a global presence: three key options
There are three main ways to build a global presence. The first is to establish your own legal entity in the country or countries you’re expanding to. Then, you have the option to work with an employment specialist such as an employer of record (EOR). Finally, you might want to hire workers as independent contractors.
Setting up your own legal entity can be both expensive and time consuming, which many companies just can’t do, either through lack of knowledge or through lack of resources. However, if you do have the time, knowledge and financing to do this, it is the most solid option, especially for the long term.
This is because it gives you a full presence in the country and will start establishing you as an actor within that market. It also means that you will be fully integrated into that country and more open to the specificities of that market. It does however, also open you to any risks associated with changes within the territory.
The second option is to use the services of an EOR. These companies have their own legal entities established in a number of countries and territories and will employ someone on your behalf, although you retain full control of the employee. As the EOR provider has their own legal entity in the country, they will make sure everything is legally compliant and above board.
The EOR will draw up contracts and guarantee that all statutory obligations, such as vacation time, bonuses, and maximum working hours are upheld. If it later becomes necessary to offboard employees, that can also be handled professionally. They are likely to have excellent contacts on the ground so that you will be hiring the cream of the crop.
This kind of in-country experience is invaluable and immediately available to you, and for a range of different countries as most EOR providers themselves have a global or at least regional presence. That also means they can advise on the territories and regions that would best fit the needs of your organization.
The final option is to hire them as international independent contractors, working for a specific project or a determined period, which many EORs are also able to support. This is generally preferable for companies that know they will only need a worker on a short-term basis and for a specific and/or specialized task.
Independent contractors are likely to be highly experienced and trained, which makes them perfect for handling projects that stray outside of your normal working practices. However, they are not employees and that means you will have less control over their work, both in terms of time demands and in how precisely they go about their jobs.
