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Leadership

How to Navigate the Financial Challenge of Building an International Team


by Rodney Laws

Global hiring is increasingly common but expanding your employee search to that extent introduces monetary complexity. Here are three tips to help you proceed sensibly.

©Nuthawut Somsuk/iStock/Getty Images Plus

Long after internet access became a household utility, the concept of hiring from overseas remained fairly niche — and hiring someone intending to remain in another country seemed to most like a fool’s errand. It was thought that productivity and effective management required workers to share a physical space. Only direct oversight would do the trick.

When a pandemic struck in 2020, though, the resulting shockwaves upended the norm. Forced to operate remotely, companies everywhere discovered that they didn’t really need to cluster together. And as professionals grew accustomed to working from home, it became clear that there was no putting the genie back in the bottle.

Some employers bemoaned this shift, but many welcomed it, seeing the rich potential of no longer being tethered to limited areas. If it didn’t matter where their employees worked, they could open up their searches to the entirety of the online world — and there’s certainly merit to doing just that. Fresh perspectives, approaches, and networking opportunities await.

Every business move must be financially accounted for, though, and so it is that any company planning to build an international team must ensure that it’s fundamentally economical. The following tips are aimed to help you achieve just that. Let’s begin.

Take advantage of relevant third-party services

We first need to think about the legal and logistical issues that can stem from having employees in different countries. To make someone a fully-fledged employee (and not simply a freelancer), you need to have a suitably-registered corporate entity within their country, and that’s just the beginning. Payroll, HR regulations, taxation… All of these issues can prove headache-inducing, leading you to struggle to keep them all in line (even with an experienced CFO in place).

Just as we automate and outsource in other areas, however, we can smooth out the overseas hiring process by using third-party services. All the aforementioned issues can be farmed out to be dealt with by companies specifically created to field them. A mediator providing an Employer of Record service (Remote has a good explanation of this here) can employ someone on your behalf, taking charge of compliance concerns and leaving you to focus on other things.

Using such a service will cost you, admittedly, but so will covering all the bases using in-house resources — and the latter is sure to be more expensive and more time-consuming. Having a system in place to deal with administrative concerns will allow you to treat your employees identically and put more time towards sheer productivity.

Exceed area-standard wages where possible

When companies look overseas, they’re often tempted to hire in countries with relatively-low average wages and costs of living. This is actually perfectly reasonable, despite its self-serving appearance: such countries aren’t lacking in talent, and their populations face economic concerns that far outstrip those weighing upon natives of richer nations. If you can hire deserving people while cutting costs in the process, it’s a win-win scenario.

But if you’re going to take this approach, you need to be extremely careful, because there are major ways in which it can work against you. Firstly, there’s the inevitability of top talents in relatively-poor areas becoming dissatisfied with their salaries. If you were doing just as much high-quality work as an overseas colleague, wouldn’t you expect to be paid similarly?

Secondly, there’s the matter of your company’s reputation. Mere rumblings of workers being paid less than they deserve can seriously damage your brand image, and all it takes is one irked employee to start spreading criticism. The key, then, lies in getting the balance right: keep your costs down in appropriate ways, but exceed area-standard wages (going past living wages if you can afford to do so: WageIndicator is a useful resource for this) to show that you’re willing to do more than is necessary to keep your team members happy.

Devise and offer individualized perk packages

There’s something deeply archaic about a boilerplate list of company perks. We should all be aware by now that people all want different things, and that’s just the start: the disparities between employee preferences tend to get wider the farther apart they’re positioned (both geographically and culturally), possibly leading to gulfs on a global scale. To inspire loyalty, you don’t need to throw money at elaborate perks. You need to listen to what people really want.

When going through the hiring process, ask each candidate what they would like from you (beyond just a greater salary). Are they hoping to focus on training in a particular area? They might benefit from you funding an excellent online course. Do they aspire to niche athletic accomplishments? Don’t just wheel out the usual gym membership. Support their effort.

And this isn't just about things you can fund. It’s also about working conditions. Having an international team means having people split across time zones, and the notion of locking everyone into the old-fashioned 9-to-5 is somewhat comical. Embracing asynchronous working and letting your employees work as and when they want to (barring occasional exceptions such as vital client meetings) will save you money on unneeded perks while getting better results. Don’t put all the effort into attracting diverse talent only to lose them due to your stubbornness.

The tips outlined here are hardly revolutionary, but the commonality of employers failing to follow them makes their value evident. If you want to enjoy the benefits of having a truly-international team, following these basic steps will help you avoid the most major financial drawbacks.
Rodney Laws is Editor at Ecommerce Platforms.