It's crucial for today's businesses to adopt diversity, creativity, and innovation as a strategic medium of growth and expansion. Combine rampant globalization with a competitive market for talent acquisition, sprinkle in the uptake of remote work in a post-covid world, and you've got the recipe for why we're seeing the shift to hiring internationally.
This guide talks through the benefits of hiring international employees, ways of working, and how to attract top global talent. You'll learn insights and perspectives from startup experts who found great success in hiring global talent, and the knowledge you need to start building your global team.
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Benefits of hiring international employees
There are many reasons why you should consider hiring international employees.
Remote work is the new normal
It is no secret that the pandemic led to the rapid rise of remote workers across the globe. Amid the need to contain the spread of the virus, many organizations increasingly allowed their employees to work remotely. And that has not changed post-Covid.
“We're seeing a lot more companies that want to tap into new markets so that they can access talent. But I think there's another aspect to consider as well, and that is as a result of COVID, obviously, most people were working remotely. Things have changed a little, but what we've actually seen is that employees are demanding more. So what that means is that there's a real talent retention piece to this that needs to be considered as well.”
—Naomi Seddon, International Lawyer at Littler
The term 'remote work' may evoke images of sweatpants, zoom hangouts, and a cheeky afternoon nap for some, but more importantly, the widespread acceptance of remote work has contributed to this new era of international recruitment.
Access a massive pool of talent
Looking beyond your immediate geographic location can help you widen your talent net and find the best person for the job, regardless of where they're from. While it may sound difficult and complex, it's actually as simple as opening your mind and considering new sources of talent that you might not have previously considered.
How to attract top talent? One is definitely hiring remotely international. There is no better way to start.
—Sondre Rasch, Co-founder and CEO at SafetyWing
Opening your job posting up to those in neighboring or even faraway countries unlocks access to a much wider talent pool. Going global with your workforce gives you unlimited access to talent that can help you to scale your business.
Tackle skill shortages
From a pure business perspective, there's an argument for hiring global or foreign employees when you've got a skill shortage. This is one of the most common reasons organizations have for going abroad in search of talent.
Finding high-quality people might require broadening the pool you’re hiring from. If you want great talent that won’t cut into profits, think more globally. For employees and contractors, finding the best job might require working for companies that aren’t based in your home country. This shift is helping people find better opportunities, with salaries on the rise in many developing economies.
—Deel's State of Global Hiring 2022
With the need for skilled workers growing faster than the supply, companies have increasingly looked to foreign talent to bridge their skill gaps.
Kyle Croyle, Partnerships at Deel, highlights an interesting perspective on having people with boots on the ground. When startups hire international employees, they have a team of people who are on different timezones.
If you're at a relatively early stage and then you're thinking about expansion, I think it makes sense to hire people either directly in a particular country or at least within the same time zone. Obviously, there are benefits from not just a sales standpoint, but from a support perspective as well with having people with boots on the ground. But I do think having an international workforce breeds higher productivity. We know that startups, in particular, are working seamlessly around the clock, but having an international workforce actually means that you could potentially work 24/7 or close to it.
—Kyle Croyle, Partnerships at Deel
Build a global brand
A strong global brand reputation is crucial for any company's growth, but the path to success isn't a linear one. Bringing in the right international employees can help your company succeed both at home and abroad.
When you hire globally, for example, it shows that you're open to new ideas and perspectives—ideals that are increasingly important to today's consumers.
Your decision to hire international employees could open your doors to new markets in foreign countries. The opportunity for business expansion is a major reason businesses opt to hire international workers.
Gain a competitive advantage
If you don't let geographical boundaries limit your efforts to employ the best talents, you'll be a step ahead of your competition. Many countries worldwide have utilized the opportunity to hire a global workforce to their advantage. It's not a secret element that every country has certain fields in which they're more adept than others.
Additionally, hiring foreign workers from the far reaches of the globe exposes your business to a new culture, bringing along connections and ideas that you may have not considered. In many ways, the more diverse your workforce gets, the more competitive you become.
Ways of working with international talent
When it comes to hiring international employees, there are several strategies that companies can use to meet their hiring needs.
Setting up a business entity abroad
Legally establish your presence in the location where you want to hire by registering your company as a business there. This can make it easier to navigate local laws and regulations, as well as to build relationships with local talent and communities.
Companies who want to pursue this will need to work with local attorneys and consultants to navigate the legal and regulatory requirements for establishing a legal entity in the country. They will also need to establish local banking and tax accounts, and comply with local labor and employment laws.
While setting up a legal entity can significantly increase flexibility and control over the hiring process, this can be complex and costly. This option makes sense if you're a later-stage company that has a lot of runway, looking to establish a long-term presence in a new market, or looking to hire large numbers of local workers.
Offering visa sponsorship and relocation
One of the most common strategies for hiring international talent is to offer visa sponsorship and relocation. This involves sponsoring a foreign worker for a work visa and providing assistance with relocation to the company's location. This strategy can be effective for companies that are looking to fill permanent, full-time positions with highly skilled workers who are willing to relocate.
To implement this strategy, companies will need to work with immigration attorneys or consultants to navigate the visa process. They will also need to provide support with relocation, including housing assistance, transportation, and acclimation to a new culture and work environment.
While offering visa sponsorship and relocation can be a successful strategy for hiring international talent, it can be expensive. Companies will need to be prepared to invest in the recruitment and onboarding process, as well as to comply with all relevant immigration laws and regulations. This option makes sense if you
Working with contractors or freelancers
Another strategy for hiring international talent is to hire contractors or freelancers. This involves hiring workers who are not employees of the company, but rather independent contractors who provide services on a project or temporary basis. This strategy can be effective for companies that have short-term or project-based needs, or for companies that are looking to test the waters before committing to a permanent hire.
To implement this strategy, companies will need to identify and engage with contractors or freelancers who have the skills and experience needed for the project or role. They will also need to provide clear expectations and guidelines for the scope of work, compensation, and deliverables.
While hiring contractors or freelancers can be a flexible and cost-effective, it can also present some legal and logistical challenges. Companies will need to ensure that they are properly classifying their workers as independent contractors, rather than employees, to avoid potential legal and tax issues.
Hiring remote employees
A third strategy for hiring international talent is to use employer of record (EOR) services to employ remote workers right where they are. This involves working with a third-party company that serves as the official employer of the remote worker, handling payroll, benefits, and compliance with local laws and regulations.
This strategy can be effective for startups that are looking to expand their global workforce without the expense and logistical challenges of relocation. It can also be a flexible and scalable solution for companies that have project-based or part-time needs.
To implement this strategy, companies will need to work with an EOR provider that has expertise in the country where the remote worker is located. Startups like Deel, Oyster, or Remote are some of the widely known EOR that we can vouch for.
While using EORs to employ remote workers can be a convenient and cost-effective strategy for hiring international talent, it can also present some legal and contractual challenges. Companies will need to ensure that they have a clear understanding of their relationship with the EOR provider, as well as any relevant legal and tax considerations.
Challenges of hiring international employees
Hiring international talent can be a strategic advantage for businesses looking to expand globally, but it also comes with its own set of challenges.
“You've got to make sure that the person has the right to work in the country. That's the first thing. The second thing is, you know what employment laws are going to apply to them because if they're based in a different country or a different state, then that's something that needs to be worked through as.”
—Naomi Seddon, Littler
There’s also the potential risk of tax and corporate filing, depending on the person’s position. Understanding salary ranges for a particular role, seniority level, and country will vary significantly, so having intel on that is vital.
Knowing your payroll strategy and the benefits an employee is entitled to are relevant information that needs to be factored in during cost-benefit analysis.
Build global teams with stock options
Cake helps startups attract top talent anywhere in the world through global equity management.
Setting up employee stock options in multiple countries is a hugely complex, manual process involving a network of lawyers and valuers and sourcing complex legal, tax, reporting and compliance variables. Cake can help you manage your international stock option plans. It's designed to ensure creating and managing equity across borders is possible, simple, and fast.
No matter where you're based or where your employees or contractors are, manage it all in one place. Cake works in the major hubs of the US, UK and Singapore, plus more than 30 of the top startup countries. Ready to go global?
How to hire international employees
To have an effective global talent acquisition process, you'll need to stand out from your competition. Here are our tips to help you hire international employees:
1. Optimize candidate experience
As an employer, it's important to consider the candidate's experience throughout the hiring process since the way your candidates are treated can impact how they view your organization and how likely they will be to refer others to work with you.
“The more you can show that you're ethical and you're providing good leadership, you've got transparency, you've thought through the complexities, or making sure that your global team will feel empowered, engaged, and fairly treated, it's really going to set you apart and help you hire and retain a great team.”
—Jason Atkins, President & Co-Founder at Cake Equity
We've seen that the experience candidates have with their hiring managers and HR representatives makes a big difference in their overall feelings about the job and whether they'll accept an offer.
Try to keep these three things in mind to optimize your candidate experience:
- Transparency and communication. Candidates should have a clear understanding of what is going on at every step of the interview, and what's to come next
- Streamlining the process. The interview process should be easy to understand, and reduced to the minimum amount of work and time required to vet a potential candidate
- Offering feedback. Regardless of whether you choose to hire, offer feedback to each candidate to close the loop
2. Sprinkle in perks and benefits
One of the best ways to recruit top talent from abroad is to make sure you offer them more than just the job.
I do think providing opportunity for people to grow within their role is extremely important and a way to attract high-quality candidates, especially ones that may be a little bit younger, but are really yearning for that management or leadership role… I think that a huge benefit of an earlier stage startup is the ability to take on a ton of responsibility, grow with the company. And so I think the narrative around that during the recruiting process is important.
—Kyle Croyle, Deel
Benefits like health insurance coverage, paid leaves, and flexible working hours are expected. Beyond these essentials, COVID proved that most employees prefer (and are more productive) working from home, so offering work from home or hybrid setup is also advantageous. We're seeing more and more younger candidates care more about personal and professional growth, so having career development programs will help attract this generation of talent.
Throwing in extras that contribute to a candidate's career progression and work-life balance is an excellent way to stand out in the crowd of other companies vying for the same talent.
3. Sell applicants on your company culture
As well as offering perks and benefits, ensure that you are communicating the ways of working and cultural norms they can expect if they sign on. Letting applicants know up-front about communication styles and frequency allows them to easily determine if they are a fit for the culture and ways of working the role offers.
If people who work remotely still want the same benefits [as local employees] and have a desire for that. That is something that people care about. Potential employees also care whether the mission of the project and purpose and values of the company are worth pursuing. That becomes a hygiene factor more and more where if that is not appealing, the best [talent] in the world just aren't going to consider it.
—Sondre Rasch, SafetyWing
Your international outreach will be miles ahead if you can easily demonstrate how your company empowers their remote workers to contribute meaningfully.
4. Offer stock options
When you're looking to hire top talent, you'll want to consider offering stock options. If you're an early-stage startup, there are many ways this benefits you. Aside from a talent acquisition play, stock options is a common strategy used by startups to manage cash flow (since stock options do not require shelling out cash outright.) Know more about startup stock options.
Being part of an equity plan is becoming more and more common. It's still developing in a lot of countries, but I think it's a way to put yourself ahead of your competitors when you're hiring and you want every advantage you can get.
—Jason Atkins, Cake Equity
When employees are given stock options, they are given a share of ownership in the company. Hence, you can attract foreign talent by offering them a combination of salary and equity. This means they're motivated to see the company succeed, as their shares could go up in value exponentially. This incentive will help them stay motivated and focused on the bigger picture. Offering stock options affords a raft of benefits, including:
- Saving on cash instead of spending money on high salaries
- Competing with other companies that may offer more
- Motivating employees to work hard to make their options go further
- Making the remote/international employees feel closer to the business
- Motivating employees to stay and make your company successful so that it will eventually be acquired or have an initial public offering, which will provide value to their shares
Offering option plans is a win-win for yourself and your employees - your business will inevitably grow, and you'll attract more talent.
Don't overlook hiring locally, but if you're pressed with time to fill a need urgently, or can't find qualified local candidates, give hiring from abroad a try.
If you're ready to start hiring international employees, you'll want to consider offering stock options as an employee benefit.
This article is designed and intended to provide general information in summary form on general topics. The material may not apply to all jurisdictions. The contents do not constitute legal, financial or tax advice. The contents is not intended to be a substitute for such advice and should not be relied upon as such. If you would like to chat with a lawyer, please get in touch and we can introduce you to one of our very friendly legal partners.