The COVID-19 pandemic created a huge shift in the way that employers conduct business. With most of the world shut down for months at a time, employees moved online and remote work became the new normal.  This had a massive impact on talent acquisition because suddenly, employees were no longer bound to a physical location which meant recruiters could hire talent from anywhere in the world.

Now that most pandemic restrictions have been lifted, many employers have reverted to pre-pandemic working conditions which have had a significant effect on recruitment.

If your business is struggling to recruit talent located in the cities where its offices are located, it may be time to consider hiring international contractors to help fill vacancies.

Keep reading to learn more about the numerous benefits of hiring contractors outside of your country of operations. 

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What Are The Benefits of Hiring Globally?

While hiring international workers can come with certain challenges like language barriers and time zone differences, the benefits far outweigh the drawbacks. Below, we explain some of the main advantages of hiring international contractors.

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You Have a Wider Talent Pool to Recruit From

When you limit yourself to just residents of one city or people who are willing to relocate, you close yourself off to millions of people around the world that are just as qualified, if not more.

Expanding your search to include international contractors gives you access to so much untapped talent.

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More Diversity in the Workplace

Diversity is incredibly important in the workforce because it leads to:

  • More innovation
  • A variety of perspectives
  • More creativity
  • Increased profits

When you open yourself up to hiring a diverse group of contractors, you reap these benefits.

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It Adds New Knowledge and Perspective To Your Team

Having people from different cultures and backgrounds working for the same company enriches the workplace culture and brings in different perspectives.

This can include:

  • Having insights into foreign markets
  • Having a different perspective on business practices
  • Having insight into how to build relationships with foreign clients and suppliers

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It Reduces Overhead Costs

Hiring remote contractors helps to keep overhead costs down because you don’t have to pay for  office space, office furniture, computers, utilities, and more to accommodate the employee. 

Skeptical? Consider this: On average, having an office space costs a business around $18,000 a year, per employee.

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Factors to Take Into Consideration When Hiring International Contractors

While hiring remote contractors offers numerous benefits to an organization, it comes with some challenges that you must consider. Below, we’ve outlined some of the most important considerations for hiring global contractors.

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Laws and Regulations in a Contractor's Country of Origin

There are no universal international labour laws that govern the recruitment of global contractors.

This means that when you are hiring international contractors, you must follow the labour laws of each contractor’s country of origin.

Pay specific attention to the following areas:

  • Regional laws
  • Workers protections
  • Taxes
  • Vacation and sick pay
  • Minimum wages
  • Overtime
  • Protection of intellectual property
  • Currency and how it affects classification

It’s also important to note that labour laws can change at any time, so be sure to stay up to date on the laws and regulations in any country where you are hiring talent to ensure you are fully compliant.

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Proper Classification

It’s critical that your contractors are properly classified as contractors and not full-time employees. If you fail to classify them as such, both your business and the contractor face a hefty fine along with other penalties such as:

  • Having to go through legal hearings
  • Paying back taxes
  • Providing reimbursement for holidays, vacation days, sick days, and personal days
  • Paying backdated workers’ compensation insurance payments
  • Contributing to contractors’ pension funds, unemployment tax, national health funds, and social security 
  • Registering your business as a legal entity in the country where your contractors are from
  • Losing your ability to employ contractors from certain countries
  • Losing your intellectual property

Even simple oversights can lead to misclassification, so make sure to do extensive research to ensure your contractors are properly classified.

For example, if you have a contractor based in Mexico but are paying them in U.S. dollars and sending payment to a U.S. bank account, they cannot legally be classified as an international contractor. 

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Payment

Making sure your contractors are getting paid quickly and that the currency exchange rate is accurate is incredibly important in order to retain your contractors. The process of paying international contractors is very different from your regular payroll process, so make sure you have selected a platform, like Borderless, to help facilitate payments before you begin hiring international contractors.

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Employment Contracts

When drafting employment agreements for your international contractors, pay careful attention to the wording to avoid confusion and prevent any legal issues down the road. Also, make sure to take into consideration the tax and labour laws in the contract’s country of origin. 

Some examples of things to include in your contractor agreements to help mitigate risk include:

  • Payment terms
  • The contractor’s role and compensation are clearly defined
  • The contractor’s status as an independent contractor and not a full-time employee 
  • Stating that the contractor must comply with their country’s tax laws and reporting requirements provide proof of tax compliance 
  • An indemnity clause
  • An Intellectual Property Transfer clause
  • A contract termination notice clause

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How Borderless Can Help Your Business Employ Remote Workers While Avoiding Common Pitfalls

Borderless is an online platform designed to help employers hire and manage remote workers from all around the world. 

Here are just a few things we can help you with when it comes to hiring and managing international contractors:

  • Payments
  • Contracts
  • Legal compliance
  • Localized benefits packages
  • Expertise in the country you are hiring from
  • Compliant tax documents

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Contact us today to learn more about Borderless or to book a demo.

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Disclaimer

Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.