On any given day, it’s not unusual for me to speak to remote clients and employees in several different countries. And I’m not alone in this.
Spurred on by the global pandemic of Covid-19, the employment world has now moved well beyond the four walls of a local office. In fact, the trend for working from home looks set to stay. Global giant Facebook has just announced plans to allow nearly all its staff to work remotely post-pandemic and employees with Apple are pushing for the same opportunities.
With location issues no longer necessary, this paves the way for distributed teams and companies to hire globally to secure the best employees.
But what are the benefits of hiring remote talent? And how do you hire employees and manage workforce payments from around the world with ease?
Why Hire Globally?
Research from the Boston Consulting Group (BCG) shows that one in every two companies struggle to find employees with the right skills. Gone are the days when you could put out a local advert and be confident that the best candidate lived in your city. Your competitors are looking globally and so should you. But this is good. Hiring remotely opens up new opportunities and has many benefits, including:
- Improved employee retention — after all employees get to live where they want
- A bigger and more diverse hiring pool of talent to choose from
- Cost savings, including relocation, training, and workspace costs
- Access to more business markets
Challenges to Hiring a Global Workforce
Despite these many benefits, hiring a global workforce is not without its challenges. Many employees don’t relocate easily (especially when they have families and other commitments), it’s costly (flights alone can cost thousands of dollars), and securing a VISA often takes valuable time.
Additionally, businesses often struggle with paying candidates in the correct currency and experience difficulties with the complexities of tax codes. Combine these factors with the challenge of staying compliant with both international and local labour laws (after all, no one wants to be shut down, fined, or end up in jail for negligent tax evasion!) and many companies just don’t know where to start.
How to hire and pay your remote employee with Global Payroll
The concept of Global Payroll is one way in which companies can solve the complex issues of paying their global workforce. Put simply, Global Payroll is the process of pulling together all global payroll streams into one system. It allows employee’s wages to be paid in their own currency, according to the laws of their country and ensures that all local laws are followed.
Global Payroll can be used when a company hires locally (such as through a foreign subsidiary), hires independent contractors, or works through an Employee of Record (EoR) company like Landing.Jobs.
In the past, the easiest way to hire in a remote country was to open a legal entity or a foreign subsidiary in that country. Below, I explore the challenges, and introduce two new innovative ways to use Global Payroll including through an Employee of Record (EoR) company and a method we have developed at Landing.Jobs called Remote2Hire.
Foreign subsidiaries are companies or organisations set up in one country but that are either owned or managed by a company in another country. Establishing a foreign subsidiary can allow for easy access to local talent and expertise. However, they aren’t always the most practical solution especially if a company doesn’t plan on remaining in a particular country long-term. Additionally, they’re not an option in every country and there are several disadvantages including high costs, lengthy timelines and complex rules to negotiate. For companies that want to move quickly I wouldn’t recommend establishing a foreign subsidiary but to explore other ways to use the option of a Global Payroll Solution.
Employer of Record (EoR) company
For companies that don’t have a foreign subsidiary in the country they want to hire in, an option is to use an EoR company to handle all employment services. Using this model, your employees still work for you, but the EoR company acts as the official employer on paper allowing you to hire workers in that country legally and with ease.
The benefits of using an EoR company to implement a Global Payroll Solution are widespread — employees get to work and live where they choose and organisations can have peace of mind that they are fully compliant with local labour laws. Additionally, this is a more streamlined system, saving both time and money and allowing for ease of data capture and future analysis.
At Landing.Jobs, we’ve also identified a third method for hiring remotely called Remote2Hire. This unique concept also uses the Global Payroll Solution and proposes a 2-stage hiring process reducing the risk of hiring global candidates by breaking down the process into smaller steps. The first phase consists of fully remote work and the second phase involves relocation.
In Phase 1, we recommend working with a partner to help you find the best candidate and who can provide a payroll solution to help you pay them. In this way, you bridge the gap between your company and the global talent and are able to act quickly to hire the best person wherever they are. This process also allows for an initial ‘remote trial period’ allowing both employer and employee to be sure they’re a match before looking into any relocation activities.
In Phase 2, once both you and the employee are sure that you are a fit, you can begin the relocation process. While this will take time, using a Global Payroll Solution means you can continue to pay your employee throughout the process. A strong partner can also help you with Visas and relocation details, like we do at Landing.Jobs.
How Landing.Jobs Can Help
I’ve previously discussed the need for employers to be strategically positioned to act fast to secure the top talent worldwide. This means having systems in place to pay employees worldwide is crucial and is why, at Landing.Jobs, we offer an all-in-one solution.
We help you find the right tech talent for the job regardless of where they are in the world, and once you’ve found them, provide practical solutions to help you overcome the challenges of hiring. We act as an Employer of Record for companies that hire talent aboard and are currently building a solid solution that goes beyond the Global Payroll Solution. Book your free demo to find out how we can offer you that complete end-to-end solution that links recruitment with payments allowing you to hire and pay the best global talent, stress-free.