Whether you’re hiring internationally to meet a specific need, or to expand your organizational footprint and expertise—or both—it’s critical to have the right strategy in place for employing top talent.
But what if that top talent resides in countries where you don’t yet have a legal entity for employing them or you don’t have plans to establish one?
It may be time to explore global employment solutions.
A global employer of record, sometimes referred to as an international PEO, enables organizations to hire the talent they need—virtually anywhere around the world—without the need to first establish an entity. Providers of this type of global employment solution hire employees on your behalf, handling the legal, HR and payroll requirements, while giving you the freedom to manage their work and contributions to your company.
Why—and when—to consider global employment solutions
Using a solution like an employer of record can give your organization the advantage of streamlined hiring in unfamiliar international markets as well as peace of mind that employment is in compliance with local laws. How? In-country HR and payroll expertise and support.
Consider the following scenarios:
You’re new to international hiring and payroll. If your company is hiring overseas for the first time, you may not have experience in the intricacies involved with employing and paying talent in your target market. Hiring international workers means you need a grasp on local salary expectations, and you need to ensure local employment customs are met. In France, for example, although an annual bonus isn’t mandatory, it’s customary for employees to receive a 13th-month bonus at the end of the year.
Because an employer of record has in-country HR and payroll experts supporting your organization, you can be sure that your new international workers are paid correctly and on time, have appropriate taxes withheld, and receive all the benefits they’re entitled to.
You’re unsure of local labor law compliance. When you hire workers in new global markets, you not only have to consider the complexities related to employing and paying them, but you also have to ensure their contracts are fully compliant will local labor regulations. In Singapore, for example, if an employment contract is to be terminated, it must be done in writing, and within specific definitions based on an employee’s length of service.
Because an employer of record has its own local entities or partnerships, it legally hires works on your behalf, absorbing the responsibility—and the risk—of complying with local labor laws and ensuring all employment contracts for your new workers meet the country’s standards, no matter how nuanced or complex.
As an added bonus, using this global employment solution can save your organization time and money by eliminating the need to establish your own entity.
What to look for when selecting a provider for your global employment needs
Not all global employment solutions are alike, so once the decision has been made to use one for your international hiring, it’s important to evaluate them carefully. Here are a few questions to ask when selecting a provider.
Are they truly local? Understand whether the provider has a direct entity or they are actually registered as a temporary foreign employer and have a limited presence in the local market. How an employment solution operates in a country, including how long it has offered services there, is a good indicator of its expertise in all matters of HR, payroll and employment tax compliance.
How do they communicate? Learn about the provider’s preferred method of communication and whether you’ll have a direct point of contact. Will they be available via phone, email, text or videoconference in your time zone or their own? With workers potentially thousands of miles away, you need to know you’ll be able to communicate with your provider for HR and payroll support should any questions or issues arise.
How is the partnership structured? Make sure you fully understand the roles and responsibilities—and the costs—of working with the global employment solutions provider. With an employer of record, the HR and payroll administration are typically handled by the provider, with the client company directly managing the employee, including their work schedules and performance. And although working with an employer of record is significantly less costly than establishing a local entity, you should gain a clear understanding of the provider's costs, what they cover and whether they pay workers in the local currency, as this may affect your bottom line.
An employer of record is often the simplest way to hire the talent you need, no matter the international market. Learn more about how our solution, Global Employment Outsourcing (GEO), has been helping organizations employ talent around the world—compliantly and often in as little as two weeks—for over a decade.