By Kandidate partner Lano
The pandemic has accelerated the rise in remote work in a previously unparalleled way, with lockdowns having forced large parts of the global population into working from home. What started off as a temporary emergency solution has since then turned into what many commonly refer to as “the new normal”, and employees all over the world have made it quite clear that returning to the office full-time is no option for them.
But the pandemic has not only led to a change of mind among employees. Employers too have come to appreciate the benefits of working with a remote workforce, and building and managing remote teams has long since become the new norm. What’s more, the pandemic has proven once more that businesses cannot focus on one market only but that they need to think globally instead, especially when it comes to their hiring and recruiting practices.
A globally distributed team increases a business’s resilience in times of crisis, since disruptive events will only ever affect a part of the team at the time. However, there are many more benefits to working with a global team. Read on as we discuss the advantages and challenges of building remote teams overseas and point out two practical solutions to overcome these challenges.
The benefits of building a remote team overseas
In addition to better resilience in times of crisis, organizations with global teams can leverage the following benefits.
Access to a worldwide talent pool
Businesses that decide to hire remotely and open their job postings to applicants based in different countries get access to a global talent pool. This means they can find the perfect candidate for the position – instead of hiring an “okay” candidate just because he or she lives locally – and even reduce their global workforce costs by hiring in countries with low wage levels.
Better customer support
Hiring a global team will ultimately have a positive impact on your customer support. When employees are based in different time zones, they can be available to customers during more hours of the day. What’s more, teammates with different nationalities also speak different languages, which is another big plus in customer service.
Expertise in local markets
Remote employees that come from a different country will bring a unique cultural understanding of the respective local market, which is a huge competitive advantage for international businesses trying to establish a local presence for their brand. Local knowledge and cultural insights are incredibly valuable when it comes to positioning a product in a new market.
Enhanced creativity and innovation
When people with different perspectives and different cultural backgrounds are brought together, this enhances creativity and innovation, since different trains of thoughts can merge into new ideas, which is crucial for businesses to stay competitive. Not to forget the positive effect on the company’s bottomline.
Diversity in the workplace
Diversity not only drives creativity and innovation in an organization, but it’s also a major driver when it comes to talent attraction because of its positive impact on employer branding and company culture. After all, working in a multicultural team makes for a much more stimulating and interesting workplace experience.
Understanding the challenges of recruiting overseas
As we’ve seen, businesses of all sizes can gain a competitive advantage by hiring and working with global teams; however, hiring overseas also comes with numerous challenges. These challenges include:
Complying with local labor laws
There are many aspects related to local employment regulations that businesses can get wrong when they hire employees in a different country. Paying workers below minimum wages, not compensating overtime in line with statutory pay rates or terminating employees without a valid reason, to name but a few. Not respecting local employment laws can result in hefty compliance fines – or even lead to business closure if the compliance breaches add up.
Getting local payroll and taxes right
From the pay period to the necessary employer social contributions to personal income tax rates and deductions… The rules and regulations governing the payroll process differ from country to country. Hiring a remote team overseas means having to navigate a sea of ever-changing payroll regulations and taxation laws – and risking fines if pay is miscalculated or if deadlines for tax reporting are missed.
Paying your international team on time
Calculating pay for each employee in accordance with local tax laws is one thing. But making sure the money hits your employees’ bank accounts on time is a different story altogether. International payments are notoriously slow and expensive, which is why organizations need alternative pay methods for their remote teams. Global payments platforms like Lano allow businesses to send international payments to employees and contractors all over the world in over 50 currencies with great savings on FX fees.
Offering the right employee benefits
Managing employee benefits when hiring a global team is challenging on several levels. First of all, the business needs to respect the statutory employee benefits in every single country. Second, organizations recruiting talent on a global scale need to have in-depth knowledge of customary employee benefits too. Only then will they be able to draft up a benefits package that is competitive enough to attract the best talent in the respective market. And last but not least, a global employee benefits strategy should also account for equality between employees based in different countries.
Setting salaries for remote employees
Similarly to defining a benefits package for globally distributed teams, setting salaries for remote employees with the same job who are based in different countries or regions can be tricky. Employees who have the same level of experience and responsibility should be paid the same salary. Yet if they are based in different countries with different costs of living, it’s debatable whether offering them the same pay is actually fair.
How to effortlessly hire, manage and pay global remote teams
Given the multitude of challenges involved in building a remote team overseas, it’s no wonder many businesses are looking for solutions to reduce compliance risks and make hiring, managing and paying international employees easier. One way of getting there is to use a global compliance and payroll platform like Lano that offers a unified global Employer of Record and payroll solution to help businesses effortlessly build and scale their global teams.
An Employer of Record (short: EOR) is a global employment solution which allows organizations to hire remote talent overseas without establishing a local legal entity. As the local employee’s legal employer, the EOR takes over the administrative and legal burden of the employment relationship, including all the registration, HR and payroll processes. With their expertise and experience in local employment law, EORs guarantee full compliance for the client business. The latter meanwhile remains in full control of the employee’s tasks and schedule.Global organizations with entities in multiple countries, on the other hand, can gain greater benefit from a global payroll solution which consolidates the payroll data from all their different entities in one centralized platform in a standardized format. Not only does this ensure compliance with international data protection regulations like GDPR, but it also allows for detailed insights into their global workforce and payroll data.
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