Insights into global expansion & employee retention

Published: October 18, 2022

Pros and Cons of Hiring International employees

By now, it’s become obvious that hiring international workers is the key to global expansion in the remote-first era. The global talent market is giving companies a competitive edge by connecting them to the people they need, wherever they live, and without the costs of relocation. And as diverse teams come together in cyberspace to solve complex problems, they drive innovation and deepen international partnerships. 
Pros and Cons of hiring international employees

Hiring international employees is not all plain sailing. Here, we’re going to give you the good, the bad, and practical strategies to navigate the pitfalls along the way. 

The (Many) Advantages of Hiring International Employees

Let’s begin with the advantages of hiring international employees. If you’re here, this is probably like preaching to the converted. But it’s worth reflecting on why global hiring is a great idea anyway because it can help to figure out ways to deal with the downsides (more on this later).

Reduce brick & mortar overheads

Office space is (or used to be) one of the biggest expenses for most companies. More and more companies have leveraged remote working capabilities to reduce these traditional overheads. Some have left brick and mortar behind entirely, while others have reduced or repurposed their physical footprint. 

But it’s not just companies that win in this scenario. Employees get to enjoy flexible working hours and benefit from not having to commute daily to an office. 

Quantity and quality

Global connectedness puts the whole world at your fingertips. Without it, companies would have to hire within geographical or jurisdictional confines. And while remote work isn’t new, the aftermath of the pandemic rapidly accelerated its uptake and drove innovation that allowed more and more work functions to go digital. 

This hasn’t just increased the number of candidates that companies can employ. It’s also allowing employers to find better qualified people.

That’s because different countries tend to prioritize different skill sets and train experts in different fields. The Global Skills Report is a handy resource for identifying where in-demand skills are currently concentrated. 

Diversity & Inclusion

In addition to cost savings and talent acquisition, hiring international employees helps companies to diversify. Companies that take diversity seriously are winning, not just in terms of social justice but even revenue.

According to one study, diverse teams generated around 19% more innovation revenue than less diverse competitors.  And they’re also reaping the benefits of higher employee engagement. 

Hiring international workers is one of the best ways to create an inclusive, connected environment. And that’s exactly the kind of remote working environment that will interest the skilled digital nomads you want to hire. As experts in building international teams, we’ve written our own guide to fostering diversity in a global workforce.

Access new markets without relocation

This diversity has another welcome consequence. Hiring international employees can help their organisations to access markets where they live. Because they already know the language, culture and economic outlook, they are a source of invaluable insights that you’d ordinarily need to get from expensive consultants. 

Pitfalls to avoid

While the disadvantages that come along with hiring international employees definitely don’t outweigh the benefits, they do exist. And it’s important for companies to understand them in order to know how to compensate for them. 

Getting lost in translation

Firstly, managing a team of people with different linguistic and cultural backgrounds is a challenge. And it’s especially tricky in a remote context. So it’s important for companies to develop a remote work strategy that builds cohesion and minimizes the room for misunderstanding. 

Our advice: when it comes to remote hiring international employees, onboarding is everything. Make sure that all new employees feel welcome from the beginning. There should also be a clear communication policy that outlines procedures for handling issues.

Finally, companies should provide virtual team-building opportunities, incentive schemes and even culturally sensitive gamification. These steps overcome barriers and foster engagement and belonging. 

By being open and respectful of its employees and their backgrounds, a company can overcome communication barriers and enjoy all the perks of diversity that we outlined earlier.

Local barriers to entry: the costs of incorporation

To hire foreign nationals in most countries, companies must establish their own legal entities in those territories. Obviously, this involves significant cost and risk, which many companies can’t justify, particularly if they are only looking to employ a small number of foreign employees.

And even a company with a legal entity must still navigate local employment regulations and tax compliance.

If establishing permanent legal entities were the only route to globalisation, this would be bad news indeed. Fortunately, it isn’t.

The best way when hiring international employees is by partnering with an Employer of Record (EOR) to handle payroll, contracts and taxes for foreign employees. EORs like Playroll, employ your people on your behalf. This solution takes care of the legwork without taking away any of the ownership.

Build your global A-team with Playroll

Is your company looking to expand its team globally and retain top talent? We built our state-of-the-art global platform with you in mind. With an international subsidiary network, Playroll makes it possible for its clients to hire in over 170 countries, entity-free.  

Kickstart your global expansion with Playroll. It all starts with a no-holds-barred demo of our platform’s capabilities. 

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