How to hire international employees

How to hire international employees

Once the preserve of multinational corporations, international business has become accessible to organisations of all sizes in the 21st century. Two seismic forces are responsible for breaking down barriers that previously blocked widespread participation in the global economy: digital technology and globalisation. Empowered by digital platforms and the interdependence of the world’s economies, even small-scale operations in provincial backwaters can achieve a global footprint.

Small and medium-sized enterprises (SMEs) that aim to harness this potential by expanding across borders typically require a mobile, tech-savvy, international workforce. Opportunities abound for ambitious SMEs that hire employees abroad, but there is much to consider before you can reap the rewards – from different employment laws to international payroll.

Benefits of hiring employees abroad

No matter where you operate, people are your business’s most valuable asset. Therefore, hiring internationally is perhaps the most vital step on the path to growing beyond your borders. Get this right and your business will unlock a wealth of benefits.

Foreign language and knowledge

Businesses that operate internationally optimise their performance by hiring employees who speak the language and understand local customs. Their ability to communicate effectively with clients and suppliers and understand cultural nuances will improve efficiency and enhance your reputation – leaving you well-placed to be successful there.

Talent pool

Transitioning from a local or national talent pool to a global one opens the door to a skilled, experienced, and productive workforce. Empowered by this, your business will become more agile and have a more hands-on grasp of the local market. This influx of fresh talent into your organisation will also enrich your existing workforce – both professionally and interpersonally.

Different perspectives and enriched culture

By hiring employees from different countries, your business will be elevated by new perspectives and a fresh approach to working. This fusion of ideas and experiences from different regions will help to stimulate the creativity and innovation needed to drive your business forward. An international workforce can also foster an inclusive culture in which everyone feels valued and can thrive – improving morale and enhancing your reputation.

Reduced costs

Payrolls may be significantly reduced when hiring employees in countries with lower living costs and average salaries. If you pay international employees in a local currency that is weak in comparison to the pound, you might also save a considerable sum – provided you are mindful that exchange rates fluctuate and take measures to mitigate this risk.

Global talent is agile

The inherent agility of international employees is typified by the remote worker. Not only can this flexible bunch work from anywhere; they can also be leveraged to fill a position with the right candidate within days – rather than weeks. This agility can help your business to scale its workforce expeditiously in response to workload demands and market forces.

How to hire internationally

Hiring employees abroad is a nuanced process that is littered with variables. Failure to account for these differences from one place to the next can lead to financial, operational, and legal challenges – so take the time to account for the following factors.

Identify the best job market

There’s no point searching for talent in an international market that lacks the skills and experience you require. This will waste time and prevent you from accessing the best candidates out there. So, do your research and identify where there is a rich supply of suitable talent. For example, India and Poland regularly rank as top destinations to hire software developers.

Type of employment

As part of your strategy for hiring employees abroad you should define your requirements: are you employing them to fulfil short-term goals or to build a sustainable team for the future? Once you know the type of employment you require – contract, freelance, or directly employed – you can plan accordingly. For example, contractors may be viewed as remote workers by the UK government, potentially making them eligible for certain benefits and protections.

Understand cultural differences

International employees typically display different behaviours linked to their cultural background – from their expectations and working patterns to how they communicate and make decisions. If left unaccounted for, these contrasting approaches can lead to miscommunication, operational inefficiencies and an erosion of trust. Overcome these cultural hurdles by understanding local working practices and customs and integrating them into your business sustainably.

Consider compliance

No longer viewed as a box-ticking exercise, regulatory compliance is now the first line of defence against rule violations and subsequent fines, stoppages, and reputational damage.

Shield your business from the consequences of non-compliance by researching and understanding the regulations of the country, state, or province in which your employees work. For example, laws around taxation will differ significantly depending on where they are located.

Plan for payroll

How are you going to pay your international employees? There’s much to consider: employment laws, taxes, regulations, and currencies differ from country to country. If these variables are overlooked, your international payroll obligations can become time-consuming and costly to manage – especially when paying multiple employees in multiple locations.

Take currency risk, for example. Currencies are traded around the clock, meaning the value of the pound against its contemporaries is constantly fluctuating – not just daily but by the minute – under the influence of political and economic factors. Even small market movements can have a big impact on the cost of your international payroll and cause your final wage bill to vary each month – with international transfer fees adding to the cost.

Payroll is typically the largest expense for businesses, meaning currency risk exposure has the potential to deal a chastening blow to your organisation’s financial health – unless it’s managed proactively.

View our currency converter to see live exchange rates for currencies from all over the world.

Currency transfers

Businesses often default to their bank when making international payments – such as overseas payroll. However, this process of exchanging currencies and sending the funds overseas is not part of their core services, impeding their ability to deliver expeditious and cost-effective payments – so consider the benefits of using a currency specialist instead. Their personal service and foreign exchange know-how will help you take control of your international payments. They can introduce you to a range of tools that are designed to help you secure favourable exchange rates, shielding your future payments from currency risk.

Tom Vicary