The challenge of managing international contractors

Global recruitment is a prerequisite for any enterprise targeting international growth and expansion and it can be a gateway to a more diverse and talented pool of employees that perform specific job roles more effectively than domestic based workers. For those aiming to set up a new franchise or business overseas, managing the logistics of an international workforce is a difficult but rewarding process that can eventually deliver maximum value for a business.

Tax and employment regulations

International tax complexities can make international recruitment particularly difficult for US based enterprises because overseas countries generally have different regulations for sick leave, holiday pay and other employee benefits. According to international business expert and Radius vice chairman and executive director Larry Harding, hiring accountants and consultants that have both international experience and a specific skill set for the country you are operating in is advisable. He adds: “An accountant with international experience is useful, but it’s also a good idea to get help from someone who’s handled hiring in that area, such as a consultant. Many consulting firms who work in particular regions have a network of resources they can tap to help you.”

Culture

Business will always differ in some way depending on the country you are looking to source employees from due to the culture and other local factors. Again this situation calls for a government agency or consultant, as they will be able to outline business norms and the expectations of the flexible workforce in each country, whether you are looking to operate in the UK, the Middle East or Asia. For example, knowing the best approach to communication for a country will make it easier to manage international contractors.

Job Applications

Creating a standardized application process for candidates is not a feasible solution for sourcing contractors due to the variations in local laws. Instead, the majority of organizations now develop a bespoke process for each country where they are recruiting to ensure they are legally compliant. It is important that all of the recruitment and marketing campaigns you run are non-discriminatory and adhere to employment-related quota requirements for each country you wish to operate in. Not losing anything in translation is key too, so ensure all relevant languages are covered during the process and think about bringing in an interpreter if you are struggling to communicate effectively.

IR35

IR35 is a complex piece of legislation in the UK that has an impact on contractors that work via an “intermediary” such as a limited company. It is implemented by HMRC to ensure individuals that fall within it pay the correct amount of tax and national insurance. As a US based company looking to set up a franchise in the UK, this factor would need to be addressed prior to hiring contractors. If you are looking for advice with IR35 to understand exactly how it is applied, you can contact an umbrella company for more information and details.

Pay rates

An often-overlooked challenge for international contractors is remuneration. It can be difficult to determine an appropriate pay structure for a position that exists in a wide range of countries. If this is a problem for you, try to decide on a rate that will be competitive in the local market and is able to attract the quality of contractor you need for a role. To aid this process, conduct a benchmarking process for each country by taking into account factors including labor market demand, common salary rates and ranges for positions, the exchange rates for currency and whether you need to offer a benefits of compensation package. For the latter, look at those offered other local employers that typically target the pool of talent you will be aiming to take on.

Interview and pre-employment

Interviewing practices and customs vary by country so carefully consider how you will structure interviews for prospective candidates and be careful about sensitive subjects such as religious affiliation and marital status. The digital age has brought about new tech that can be leveraged to streamline multinational hiring so consider VOIP conferencing and video streams for a cost effective and robust hiring strategy. When it comes to pre-employment screening, always adopt a cautious approach.

Other considerations

Some of the other considerations for international business and sourcing freelance workers include working time regulations, employee inventions and non-competes and collective agreements. You should also keep an eye on developing global situations such as the recent Brexit, which could have a drastic impact on employment and labor laws in the UK in the near future.