Not so long ago, telecommuting was a rarity.
One global pandemic later, remote and hybrid work are the new normal. Some 35% of full-time employees worked remotely in 2023. This number is even higher for workers over 25 with college educations, with 52% saying they telecommuted during the year.
Remote work is here to stay — and with it, the compelling opportunity to expand beyond traditional talent pools and recruit from across the world. As geography becomes less of an obstacle, forward-thinking businesses are adopting a borderless approach. 3 in 4 tech workers believe borderless talent is the industry's future, according to a recent Howdy.com survey. 73% already work with global teammates.
Are you new to the world of hiring international remote employees? Going global can bring a competitive edge, helping you source in-demand professionals, expand to new markets, and get ahead of the critical US tech talent shortage. Our guide will help you understand the benefits, obstacles, and key strategies for building a global team and growing your business beyond US borders.
Key points:
- By hiring globally, companies can access a larger talent pool, expand to global markets, and stretch their hiring dollar.
- Challenges of international hiring include navigating legal and compliance requirements, cultural and time zone differences, and logistical barriers like payroll and benefits.
- Options for building global teams include hiring independent contractors, setting up local entities, or partnering with local employers of record (EoRs).
Benefits of hiring international employees
Hiring global employees can be a boon for your business by broadening your talent pool, saving money, and improving global mobility. Here are some of the benefits of having an international workforce.
- Access to a diverse talent pool: Tapping into international markets connects you with skills and expertise that may be scarce locally. In addition to bridging skills gaps, global workers bring unique perspectives, backgrounds, and life experiences to the team, fueling creative problem-solving and innovation.
- Cost efficiency: Hiring in the right regions can save you money while competitively compensating employees. For example: you can hire high-demand, highly skilled workers from Latin America at a much lower cost than you can in the US due to favorable exchange rates.
- Market expansion: With a global pool of workers comes the possibility to reach new markets. Your new team members bring local expertise that can help minimize language barriers and cultural differences.
Challenges of hiring international employees
Hiring across borders comes with challenges. Here are some of the potential drawbacks of hiring international employees to keep in mind:
- Legal and compliance issues. From a legal perspective, hiring and retaining employees globally can be tricky. Every country has its own labor laws, tax regulations, and employment standards. Careful compliance is key to avoiding fines and legal penalties.
- Cultural and language barriers: Differences in language, work culture, and business practices can lead to misunderstandings. Even competent English speakers can cause and experience communication hiccups if they miss cultural and native-speaker nuances.
- Time zone differences: Working with colleagues in different time zones impacts team dynamics and makes collaboration a challenge. Limited time-zone overlap reduces opportunities for real-time communication and spontaneous interactions.
Options for hiring international workers
When considering international hires, companies have several options. Here are the three most popular ways to hire foreign workers:
- Hiring independent contractors. Ideal for short-term projects and specific tasks, hiring independent contractors offers flexibility and cost savings. So-called "fractional hiring" is on the rise, with 46% of US professionals working with contract-based teammates, according to recent data from Howdy.com.
However, the line between an employee and a contractor can be blurry in many countries, and the penalties for misclassification can include fines, back taxes, and legal penalties.
- Setting up a local entity: Establishing a local entity means forming a legally separate company in the target country where you intend to hire employees. This approach provides more control but can be lengthy and complex, involving high costs and administrative responsibilities.
- Partnering with an Employer of Record (EoR): An employer of record (EOR) is a middleman that acts as the legal employer of your international employees. An EOR handles compliance with local labor laws and regulations, streamlining the hiring process and minimizing legal risks.
Want to learn more about working with an EoR? Schedule a free demo with Howdy.com, a global hiring provider specializing in Latin American tech workers. Our platform streamlines the onboarding and management of LatAm employees, handling talent acquisition, compliance, and everything in between.
Global talent trends
The global talent landscape is in full metamorphosis, driven by trends like the tech talent gap and the rise of AI. Ahead, we look at the international hiring trends reshaping the future of business in 2025.
Increased demand for specialized skills
The competition for top tech talent is fierce. Competition is compounded by shifts in key skills, and the industry faces a critical need for expertise in areas like artificial intelligence, machine learning, cybersecurity, and data analytics. With soaring demand surpassing the supply available in domestic markets, more and more companies are taking their talent search global.
H1B visas vs. nearshoring
The H-1B is a nonimmigrant visa that allows employer-sponsored international employees to work in the US temporarily (typically three years, which may be extended for a maximum of six years).
H1B visas have long facilitated the hiring of foreign talent, but recent policy changes and rising uncertainty over the program's fate have led companies to consider nearshoring.
Nearshoring — or outsourcing work to neighboring regions, like Latin America from the US — is a flexible and cost-effective alternative to relying solely on H-1B visas. Nearshoring connects companies with niche and specialized skills, helping them expand their workforce without the limitations and headaches of the H-1B program.
Opportunities in the labor market
The global labor market is fast evolving. 23% of jobs are expected to change, with 69 million new roles created and 83 million existing ones displaced by 2027. In addition, 92 million jobs can be conducted fully remotely by 2030, up 25% from today. The rise of remote work creates access to top talent without relocation, broadening the potential candidate pool.
Are you prepared for the future of work? Howdy.com can help you tap into the global market to find top talent with future-forward skills. Learn more in a free demo.
Creating your international hiring strategy
Ready to build your global hiring strategy? Here are the first steps to take:
- Identify talent needs: Determine which roles can benefit from international hiring. Consider factors like skill availability, strategic direction, and anticipated future needs.
- Selecting target markets: Research countries that offer the desired talent pool and assess factors like political stability, language proficiency, and time zone compatibility. Popular, promising talent markets include Latin America, the Ukraine, and India.
- Choosing the right hiring model: Decide between contractors, local entities, or partnerships with organizations like Howdy.com. Your decision should align with your company's resources, goals, and culture as well as the specific roles you're looking to fill.
Legal & compliance requirements
An important part of creating an international hiring strategy involves understanding local laws and tax requirements. Here are three important areas to familiarize yourself with:
- Employment contracts: Make sure contracts meet local legal requirements, clearly outlining terms of employment, compensation, and termination conditions.
- Tax obligations: Understand the tax implications of your home and host countries to prevent legal issues and double taxation.
- Data protection: Comply with international data protection regulations — such as the GDPR in Europe — to protect employee information.
Onboarding international employees
Effective onboarding sets the stage for success. The process should include:
- Training and integration: Provide training programs to help new hires understand and adapt to your company culture. Encourage teams to become active cultural learners and teachers to understand each other and avoid misunderstandings.
- Communication: Decide on communication platforms to support interactions across borders, time zones, and languages. Schedule regular check-ins to keep everyone on the same page. Regardless of language fluency, everyone should be encouraged and empowered to speak up.
- Support systems: Offer support to assist international employees during their transition. This can include mentorship programs and other resources, as well as virtual "happy hours" and other team-building activities.
Managing international teams: Challenges and solutions
Building a global team is a journey, not a destination. When managing your remote teams, here are two key, ongoing factors to consider.
Cost management: Cost management for international teams calls for a strategy that manages resources, budgets, and expenses across different geographical locations, cultures, and economic environments. Establishing a central, standardized budgeting system can help ensure transparency and accountability across your company.
International employee retention: Retaining top talent is an ongoing effort. Important retention strategies include:
- Requesting and honoring feedback
- Cultivating a culture of inclusion
- Prioritizing work-life balance
- Optimizing compensation and perks
- Promoting open communication
Conclusion
Unlock new markets and unleash the potential of talent anywhere with Howdy.com. Learn the answers to common questions on our FAQ page, or experience the Howdy difference for yourself in a free demo.