Nowadays, hiring managers in search of good talent seem to have the deck stacked against them. More than ever, people are looking for meaningful professional opportunities that may not check traditional boxes. Despite recent well-publicized layoffs and threats of recession, the unemployment rate remains low and “Now Hiring” signs abundant. The labor force continues to have access to plenty of choices, including striking out on their own.
In this environment, employers recruiting from limited talent pools may face considerable challenges in finding suitable candidates. Of course, the right person for the role must possess the skills to do the job. But more importantly, new hires should exemplify the company’s values and have a growth mindset. Job seekers who can extend a business’s capabilities with their insights are a plus.
Expanding your company’s search efforts beyond limited geographical borders is one way to overcome recruiting difficulties. Yet hiring candidates from other countries comes with a separate set of demands, such as understanding different labor laws. Fortunately, it’s still possible to diversify your team by making the whole world your talent pool. Below we’ll explore potential ways to make it work.
Join Forces With an Employer of Record
Undoubtedly, hiring international employees can open up more possibilities for an organization. You gain new and broader perspectives. Your business might be able to expand its markets. Or you can finally onboard valuable team members for difficult-to-fill roles.
At the same time, your company can’t simply post open job listings to recruit new hires from other countries. In most cases, you need to establish a legal business presence there before employing someone. Setting up legal entities in nations you plan to recruit from is part of staying compliant with local labor laws. But the process is lengthy and can vary between jurisdictions.
This approach can quickly become expensive, especially for smaller businesses that may only need to hire a few people. An employer of record service helps companies overcome this obstacle. EORs already have legal entities set up in nations around the globe. They hire international workers on your behalf while ensuring your business stays compliant with each country’s regulations. EORs also handle payroll and benefits so companies can scale quickly.
Test the Waters With Contractors
Alternatively, adding independent contractors to your roster can be an effective strategy. It’s an approach you might already use domestically to augment your team’s abilities. Hiring global freelancers lets your company vet workers’ skills while benefiting from their firsthand knowledge of outside markets. Even if you’re not ready to expand globally yet, you can establish local working relationships for future possibilities.
While there are advantages to taking this route, you must also look out for potential pitfalls. Each nation’s labor laws might impact the agreements you sign with independent contractors. Your company could get into trouble if the working relationship violates distinctions between employees and freelancers. As in the U.S., a country’s laws governing these differences may vary between states or provinces.
For example, Colorado’s regulations stipulate that companies cannot direct or control an independent contractor’s performance. Written agreements must also clearly state freelancers are not entitled to unemployment benefits from the organization. But in California, companies need to apply an ABC test to working relationships. This test overlaps with Colorado’s laws somewhat but also specifies that freelancers must perform services outside a company’s “usual course of business.” State and provincial government regulations abroad may feature similar discrepancies.
Set Up a Local Presence
Establishing legal entities is something your company might want to do if it aligns with your resources and strategies. Say you plan on expanding into a foreign market long-term. Maybe your company needs to hire many employees in specific countries. Working with contractors isn’t going to be practical. Plus, you’ve got the expertise, money, and time to go through the process of setting up a local office.
Larger organizations are usually more likely to find themselves in this scenario. These companies are looking to become multinational conglomerates. Or their leaders need to move the business into global markets to sustain growth. Such companies might be in particular industries, like retail, that require opening several locations to meet forecasted demand.
While creating local legal entities takes more time and resources, it can be the right choice for certain businesses. Some companies prepare the ground by working with an EOR before setting up local entities. This strategy allows you to bring needed talent on board while you’re waiting for government approval. It also gives you a chance to tweak your market expansion plans if reality doesn’t match expectations.
Buy a Foreign Company
To acquire a foreign company, you need a lot of cash or someone who is willing to invest in your ambitions. It also helps if the company you’re buying has a compatible organizational culture. The process of merging the two entities together will be considerably smoother if the internal cultures are similar. This encompasses everything from leadership styles to values and performance expectations.
Again, purchasing a global company with existing resources is an option more geared toward larger organizations. It’s a strategic decision with long-term implications. While it does give a business immediate access to talent and legal entities, it’s not a quick-fix solution. As a leader, you have to think about how an international acquisition fits with your current and long-range goals.
Even if your internal cultures are alike, taking over another organization will lead to some resistance from your inherited staff. They may be worried about possible structural changes, such as layoffs. Change management techniques, including transparent communication, will help facilitate a successful transition. If your company has what it takes to manage a global acquisition, it can pay off in the long run.
Growing Your Talent
Extending your candidate search beyond your home country’s borders can benefit your company’s performance. Increased diversity in skill and perspective adds to an organization’s agility. However, expanding into international hiring waters is tricky, to say the least. Luckily, there are several ways to recruit global talent, including working with an EOR to efficiently achieve your hiring goals.