The case for recruiting foreign workers is now more compelling than ever. Many ambitious business owners and managers, however, are still unclear how to hire a foreign employee.
In this post, we look at the advantages of recruiting international workers and outline seven processes for hiring a foreign worker.
Why Do You Need to Know How to Hire a Foreign Employee?
There are three main reasons why a company might consider recruiting overseas workers:
- Remote employment is becoming more popular.
- Outsourcing has been steadily increasing in recent years.
- The decision to expand internationally.
For starters, the rise of remote work makes employing international personnel more appealing: you don’t need your staff to be in close proximity to an office anymore.
For some years, the trend toward a remote workforce has been gaining traction. According to one survey published in 2018, the number of remote employees has increased by 80% in the preceding decade. Business owners in a variety of industries have long questioned the necessity for a central office, given the high rental prices, staff movement limitations, and continuing office upkeep expenditures. Of course, in the middle of the COVID-19 epidemic, this trend has intensified.
It’s never been simpler to recruit foreign employees wherever they are, thanks to considerable advancements in communications technology and a growing number of professionals embracing the gig economy.
Second, the expansion of global outsourcing necessitates the use of international workers. While the outsourcing tendency has ‘wobbled’ over the previous few decades, there are some signs that the Covid-19 epidemic is prompting a resurgence in the practice. Global outsourcing, it has been proposed, maybe an essential aspect of cost resilience: there is no need to commit to expensive office leases when the IT function can be contractually outsourced to a less expensive location.
While outsourcing does not need the company to acquire foreign personnel directly, they still need to know whether there is a global outsourcing agency that would hire qualified foreign workers on their behalf.
Third, recruiting foreign personnel is frequently the most effective way to expand internationally. Unlike outsourcing (when the foreign activities are contracted to a third party), when a company expands internationally, it develops an outpost or presence in another country. While it is feasible to shift personnel from headquarters to a foreign location, visa and shadow payroll concerns can make this far more difficult than just employing international workers.
What Are the Benefits of Hiring Foreign Employees?
Hiring international workers has a slew of advantages for forward-thinking companies. By employing foreign workers, you will be able to:
Enter new international markets
Entering a new international market may be advantageous in a number of ways: It has the potential to attract a whole new client base, save labor costs, and allow for isolated and regulated product testing.
Hiring local expertise to help you break into a new market might help your products and services feel more localized: Locals are considerably more equipped to represent your brand in a new area, both culturally and professionally. They understand what customers want and have an instinctive sense of the subtleties of the local market since they are locals.
Additionally, employing foreign personnel for a new market will lessen the need to relocate existing staff.
Access a larger pool of candidates
Businesses that recruit just staff who live near to their headquarters limit their potential to connect with the top talent. A firm can profit from remote solutions by expanding the pool of possible applicants. There’s no reason not to recruit a foreign employee as part of a global team now that there aren’t any restrictions on where applicants may be found. The challenges connected with distributing worldwide payroll may be readily minimized with the help of a trustworthy third-party vendor.
With the current state of global markets, it is feasible to employ people at competitive rates from other countries. Businesses can also save money on charges that equally skilled employees in the company’s main nation of operation would require. Employee perks will also differ from nation to country. When employing international personnel, with the correct research and help, it is feasible to provide a profitable package while saving money on pay and benefits.
How to Hire a Foreign Employee?
We offer the following procedures to any business owners or managers who are unsure how to hire a foreign employee:
Confirm the candidate profile
The first step is to know exactly what you want from a new recruit. This entails constructing a ‘candidate profile,’ which includes the following information: Examining the individual’s major responsibilities, applicable skills and experience, and corporate culture should all serve to paint a picture of suitable hiring for the organization.
Determine where the employee is to be hired
The method that should be followed depends on where you plan to hire a foreign employee. For example, a US corporation considering recruiting a foreign employee must carefully consider the (very limited) work permits available in the US for foreign employment.
If the person is to be employed in another country, it may be difficult for the firm to hire directly without forming a subsidiary or employing a global recruitment solution. Below, we go through these options in further depth.
Consider alternatives to hiring employees
It’s important assessing if employing an employee is required or desirable once the choice to engage services or labor in another nation has been taken.
For example, in some circumstances, rather than hiring staff, you may be able to engage overseas contractors to meet your demands. Businesses that deal with contractors pay them in a flat amount and do not withhold any income taxes, making them officially “self-employed.” Furthermore, they are exempt from paying any payroll, social security, or employer taxes. In practice, this allows a company to pay a contractor a greater hourly rate than a normal employee while lowering overall labor costs.
It’s no surprise that as the global market has expanded, the number of independent contractors has increased rapidly. Contractors are, in many respects, the ideal choice for firms looking for little involvement from specialists hired to complete certain tasks.
It’s important to note, however, that treating a contractor as an employee is typically not a good idea, since this might lead to employment misclassification. As a result of regulator action, this might result in significant fines.
Explore all relevant recruitment channels
After you’ve decided on the type of applicant you want to recruit and where you want to hire them, you’ll need to consider the best ways to find them.
A variety of generic employment sites, LinkedIn, and any industry-specific job boards are frequently used.
It might also entail enlisting the help of a recruiting agency or a partner to find personnel via their own networks in the chosen nation.
It’s time to assess individuals who have submitted applications and resumes. While the candidate profile and job description are critical, bear the following in mind: For example, international candidates’ resumes or CVs may utilize formatting norms that you are unfamiliar with.
After all of the applications have been reviewed, it’s time to start the interviewing process. This might involve:
- Recruiter pre-screening
- Examining (e.g., psychometric)
- A talent task that has been assigned
- Interviews with representatives from the client’s firm.
How to Hire a Foreign Employee with Marfa Overseas
Establishing a legal entity
Establishing a legal entity overseas, such as a subsidiary company, is frequently the preferred choice for firms dedicated to establishing a long-term or permanent presence in a new nation with a large number of foreign employees. This permits the corporation to have a complete commercial presence in another country, including the capacity to enter into contracts and do agreements there.
It should be understood that forming a company may be expensive and time-consuming. It necessitates an awareness of the relevant tax and labor legislation in the expanding nation. It also necessitates the registration of a firm with the appropriate tax and social security agencies. Despite this, forming a legal corporation is frequently the most effective approach to attain long-term stability in a foreign market.
International Employer of Record
Many companies looking to hire staff want a cost-effective and quick hiring option. Working with an Employer of Record like Marfa Overseas Employment Promoter service is beneficial to many of these firms.
The global employment organization, through a local firm, becomes the legal employer of a company’s international employees under this structure. As a result, they assume employee liability and manage the administrative aspect of employment, such as payroll, benefits, and workforce management. At the same time, the client firm maintains control over its domestic and international staff and manages their daily activities. This allows a company to avoid forming a legal corporation while yet having an active staff in their new market.