The domestic labor market can be limiting. If your startup needs niche skills at an affordable price, try hiring internationally.
Talented people live all over the world. The trouble is navigating the legal, managerial, and cultural hurdles to find and hire them. You’ll learn quickly that you aren’t in Kansas anymore.
Don’t let distance be a barrier. When it’s time to expand your operations beyond U.S. shores, use these five tips to hire the international team members you need:
1. Partner with a Global Employment Solutions Provider
Different countries play by different rules. You need to find a global employment solution provider who knows how to operate in your expansion locations.
An international employer of record (EOR) allows you to legally and indirectly hire team members in other countries. It’s responsible for compliance with labor laws, benefits administration, global payroll, and tax withholding.
Look for an EOR that does more than just handle the paperwork. Any EOR worth its salt makes employees feel like they’re on the “A” team through cultural support and managerial consulting.
Avoid EORs that charge a percentage rather than a flat fee. EORs with percentage models will make you want to pay your foreign employees less to keep your costs down.
No matter where you are in the world, better pay and benefits attract better employees. Particularly if you’re hiring for leadership or technical positions, skimping on compensation is a good way to shoot yourself in the foot.
2. Hire Employees, Not Contractors
It’s tempting to just pay a contractor in another country to work for you. But there are a lot of reasons why hiring employees is a wiser choice.
For one thing, your company will generally bear more of the compliance burden than the contractors it employs. For example, if you aren’t compliant in your classification of the contractor, you pay the fines and penalties.
Using contractors can also increase the risk of intellectual property issues. In some countries, the contractor could wind up owning some of the IP that he or she creates on behalf of your company.
If you’re going to engage a contractor regularly, hiring them as an employee is probably more cost-efficient as well. Plus, the people you hire will appreciate the consistent pay and benefits that accompany employment. That benefits the employee, of course, but also creates a more cohesive and deeper company culture for you.
With that said, there are times when hiring a contractor makes more sense than hiring a full-time employee. If you just need a logo designed, for instance, then it probably isn’t a good idea to employ the designer. Look to your EOR to help you weigh the pros and cons.
3. Don’t Assume Domestic Agreements Will Work
Toss that boilerplate employment contract or non-compete agreement you use at home when expanding abroad. Categorically, home and international versions might be similar. But the details will differ, often substantially.
It’s critical that you have contractor and employment contracts, non-compete and non-disclosure agreements, and agreements designed to protect your IP. But they all need to be drafted to comply with local rules and laws to be effective.
Courts can and often do throw out contracts over a single clause. Beyond that, legal representation can be expensive and difficult to find in a foreign country.
Your EOR should have employment attorneys in your expansion country. They can make sure all the i’s are dotted and the t’s are crossed, no matter the local language or the law.
4. Preboard Before You Onboard
The COVID-19 pandemic revealed that working remotely can be challenging for both the employer and for the employee. This is doubly true for remote work conducted across international borders.
Be diligent. Consider not just communication with remote workers, but data security, local infrastructure, and cultural differences. You don’t want to find out that your employee can’t use their company computer because its plug won’t fit into local wall sockets, for example.
The good news is, many preboarding best practices should be familiar. Set realistic expectations for the role. Provide opportunities to meet regularly with management. Discuss what data is sensitive and how it should be handled. Talk through any limitations on their access to company infrastructure and information.
The best way to prevent post-hire surprises is to do your homework on the front end. It’s better to find out that a relationship won’t work early than after you’ve integrated a new team member into your workflow.
5. Speak the Language
Speaking the language of international employees means more than speaking their actual language. It also means developing a corporate culture in sync with a country’s cultural norms.
You need to be aware of any cultural taboos so you can avoid accidentally insulting or offending one another. For example, avoiding eye contact is seen as a sign of respect in some foreign countries. But in the U.S., it’s viewed as rude or a sign that someone is lying.
Ignorance of cultural norms is not a defense. Constantly pleading with each other for forgiveness is not a productive working relationship.
Provide one-sheeters to each remote team about the cultural tendencies of each country in which you operate. Convene an ice breaker session to get to know each other and discuss potential points of friction. Getting cultural differences out in the open is the surest way to prevent feelings of resentment from festering.
Another component of speaking the language is choosing your communication tools wisely. For example, some domestic phone plans cannot send or receive international SMS messages. Slack, on the other hand, is used around the world for team communication.
When in doubt, ask: How would your international team members prefer to communicate? Are there things that you say or do that frustrate them? What sorts of compliments motivate and inspire them?
Expanding internationally is a big, exciting step for any startup. Success or failure is going to depend on your ability to recruit, hire, and retain great employees. That’s just as true in China and Canada as it is in Kansas.