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By LegalEdge News

How to hire globally and compliantly


Our own Nick Pritchett recently joined an expert panel, hosted by Hubble, to discuss how to hire globally and compliantly. Nick and his fellow panel members gave lots of tips to help fast growing businesses navigate employing a global workforce.

Some repeating themes emerged during the discussion, as well as some helpful practical insights.

Below we summarise some of the issues, but you can listen to the whole webinar, here

  • The opportunities for businesses have expanded due to experiences during Covid, enabled by technology.
  • The talent pool is no longer defined by national borders but is potentially limitless and global.
  • You can find some amazing talent overseas; as the UK experiences a skills shortage, now is the time to get ahead of your competitors.
  • Some countries are already becoming hubs for certain industries so look around at where your industry is buoyant or growing.
  • Some governments are offering funding/incentives for certain sectors.
  • Be led by the talent you are seeking. Advertise your roles widely and see what comes back.
  • You still may need to target your recruitment based on time zones, language, cultural fit etc.
  • What is your timeline? If you need someone to start asap then hiring from a totally new country may be impractical, given the set-up required – three months minimum is usually more realistic.
  • Start on the relevant government’s website, this should give you basic information about employing people there.
  • Ask your network, many businesses are going through the same thing.
  • Don’t try and become an expert! Use a specialist partner who can give you a quick overview of whether a territory may or may not be suitable.
  • For example, some countries may not allow contractor relationships or, the legal restrictions on foreign businesses are prohibitive.

 

  • Options range from setting up your own subsidiary in your new territory, taking on your own contractors or using an employer of record (EOR).
  • An EOR is an outsourced back-office which takes on the administration of international staff on behalf of a business, dealing with payroll, regulatory and legal compliance etc.
  • Every business will have different factors at play, but costs and time are likely to be primary considerations.
  • One way to think about this choice is whether your expansion is driven to find talent, or whether it is driven by your need to do business in that territory?
  • If the former, an EOR may prove speedier and more cost effective. If the latter, the costs of setting up an entity may be justifiable in the long term.
  • Ideally, you would avoid country specific benefits where possible and have the same package for everyone globally. However, there is currently no such thing from a tax and legal view as a global citizen so you will need to respect national requirements and quirks.
  • For example, in the USA medical insurance is an absolute must but, in European countries where social security provides a good healthcare system, such a benefit may not be necessary. In which case you should consider whether to provide another benefit instead.
  • You should also consider whether salaries are harmonised globally or local standard.
  • Providing a global share option scheme is complex.
  • There is no substitute for doing your research and benchmarking globally is not easy; take advice from experts.
  • Bring experts in early and don’t scrimp on this.
  • Partnering with a trusted third party who understands the country you are going into will save you money in the long run.
  • Particularly when it comes to complex tax, legal, social security and payroll matters, the direct and indirect costs of getting it wrong could be very significant.
  • Think about the banking arrangements you will need in any new territory. Requirements may be more bureaucratic than in the UK, for example, capitalisation requirements may apply.
  • Don’t forget that employers are responsible for the health and safety of staff, wherever they are based.
  • Remember that overseas staff will likely accrue legal rights locally, in addition to those under their contracts and/or English law. And if there are problems they will probably be able to bring employment related claims locally, which could be costly as local legal advice will be needed.

Please get in touch if you have any questions or need help implementing any changes / updates to your working strategies or policies.

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