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Employer of Record & PEO 16 min

How to hire remote employees

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The remote workforce is a permanent part of the way we work and the way we will work.

The COVID-19 pandemic forced the issue, sending a huge percentage of the workforce home to work remotely for most of 2020 and part of 2021, but the remote movement was coming all the same.

Organizations have now seen that not only is a remote workforce possible, but it’s a benefit. Disconnecting employment from geography cracks the world wide open for companies looking to avail themselves of worldwide talent.

This guide details how your company can quickly and easily tap into the global remote employee market in a legally safe and cost-effective way.

Why the future of talent is remote 

Since the COVID-19 pandemic, many companies worldwide have made a permanent shift to some degree of remote work. McKinsey found in 2021 that about 20–25% of the workforce in countries with advanced economies could work from home three to five days a week. That’s at least 400% more remote work than existed before the pandemic, and that figure continues to grow.

Remote’s own research supports these findings, showing that 81% of workers would move to a new region, state, or country if they could do so without sacrificing their careers.

Last year, for example, German conglomerate Siemens permanently moved to a flexible work arrangement, allowing its thousands of employees to work remotely.

“We’ve always had mobile working at Siemens, but now we’re taking it a step further,” said Roland Busch, Deputy CEO and Labor Director of Siemens AG, in a statement. “These changes will also be associated with a different leadership style, one that focuses on outcomes rather than on time spent at the office.”

The idea that results are more important than time spent at a specific desk in a particular building is one of the benefits of remote work. Rather than managing the time workers spend at the office, supervisors can instead manage the outputs, trusting employees to get the work done on their own.

Offering remote work options has a huge added benefit: it gives organizations the ability to reach across the globe and handpick the best talent for their open positions. When the office doesn’t exist, why limit your talent pool to local candidates alone?

The benefits of hiring remotely 

Remote hiring offers an array of benefits that localized hiring doesn’t. Here are some of the most attractive ones:

A worldwide talent pool

Traditionally, companies were limited by geography when it came to filling open positions. They had to hire people who lived near their facilities or else hope their jobs were enticing enough to convince great candidates to move.

From 2020 into 2021, in the U.S. alone, 2.38 million people moved due to a new job or job transfer, according to the U.S. Census Bureau.

Moving can cost both employee and employer a lot of money. But it also limits your talent pool to the individuals who live nearby or are willing to move.

Hiring remotely expands your talent pool from your immediate area to every continent. No matter where the best candidates live, they can now work for you.

More team diversity 

The old approach was limiting in another way: restricting recruitment to local candidates meant your opportunities for diversity were likewise limited. Remote work, on the other hand, offers built-in inclusivity, allowing organizations to recruit diverse candidates from around the world.

Consider Tealbook, a supplier data platform that more than doubled its staff by hiring remotely in 2020 and 2021. Tealbook wanted to hire for diversity, one of its core values, said founder and CEO Stephany Lapierre, and remote hiring allowed the organization to do so.

“For example, we want a diverse community, but research and development teams often skew male. So, when we have equal candidates, we pause and think about whether this is an opportunity to offer the position to a woman,” said Lapierre,writing for Chief Learning Officer Magazine. “Our R&D team is now 40% female, which is rare for a technology company.”

More equity in the workplace

Remote work makes well-paying work more accessible to those who might be excluded by the limitations of a physical office.

For instance, workers with disabilities have long faced struggles with traditional workplaces and fought for opportunities to work from home.

Another category of employees who benefit from a remote-first workplace is parents and caretakers, who often worry about taking time off for family obligations.

Greater employee satisfaction

Employees have long seen remote and flexible work arrangements as a perk. Back in 2017, even before the pandemic, 88% of employees considered flexible work time the most important benefit, and 80% said working from home was the most important benefit a job could offer. It was something that would even affect their decision to take or leave a job offer.

Hiring remotely provides an immediate and obvious boost to employee satisfaction and retention. However, even the most positive transitions come with their fair share of challenges. Below are some factors to consider when hiring remotely.

Considerations when hiring remote workers

Hiring remotely can be easy, but transitioning to a workplace that welcomes remote workers takes some effort. International borders still matter quite a bit when you’re handling payroll in more than one country, trying to abide by multiple sets of employment laws, and dealing with taxes.

Each of the following aspects of hiring international employees can add layers of complexity, especially if this is your first remote hiring experience.

Managing payroll

Payroll can be a headache in the simplest of circumstances, especially for small businesses with limited accounting resources. When you hire internationally in new places, trying to handle payroll yourself without violating local laws can be a legal hazard.

A woman approaching an ATM with her bank card
21 min

How to pay international employees

Choosing the right method of handling payroll for international employees saves you time, ensures your compliance with local laws, and keeps your employees happy.

Calculating compensation

Should you pay a remote worker the same rate you’d pay a local one? What is fair in their country? What is the cost of living there? What benefits do they expect? What is considered competitive pay?

While you do have a few options when calculating compensation for remote employees, finding your own balance can still be tricky.

Permanent establishment risk

What about the taxes you pay for doing business in another country? “Permanent establishment” is a tax term for businesses that have an ongoing presence in a country and generate commercial revenue there.

If that foreign country decides that your business qualifies for permanent establishment status, you might be subject to corporate taxes abroad. You might also have to meet other standards of compliance that other international companies don’t. Read Remote’s guide to permanent establishment for more information.

Misclassifying employees as contractors

There are significant dangers to misclassifying your employees as contractors. Whether misclassification happens accidentally or intentionally, you could be subject to fines, penalties, and business bans under various local laws — not to mention legal disputes with employees who realize they are missing out on certain employment benefits, such as PTO or health insurance.

Be cautious when defining job roles. What exactly will your employees do? What is their relationship to your company? Do you already have contractors in other countries? You may need to consider converting some contractors to employees(another potentially tricky situation) to remain compliant.

IP and invention rights

One of a company’s greatest assets is its intellectual property (IP), which is protected by copyrights and patents.

In traditional office setups, IP rights are fairly straightforward, if only because offices only exist in one country at a time.

International hires can complicate IP protections because remote employees don’t always work in a company building, on company equipment, or on company time. Plus, different countries may have different IP laws to comply with.

Losing your IP rights because you’re not aware of international law can cause several problems, such as legal battles, reputation loss, and more. Read our guide on IP rights for remote teams for more information.

Managing where remote employees pay taxes

If you’re based in one country, but your team is located all over the world, how do you figure out income taxes? Do they pay taxes where they live? Where are you based?

The good news is that taxes for remote workers are not much more complicated than those for traditional office workers. The bad news is that most educational resources on taxation cater to people in traditional environments. It’s important to know where remote workers pay taxes so both you and they can remain compliant.

Fortunately, all of the above issues are manageable when you work with an expert partner who specializes in local employment law and can guide you through recruitment, managing risk, and scaling effectively. 

Get your 
Remote Hiring Guide for expert remote onboarding insights

Learn the processes you need to find, recruit, and onboard remote employees (and stay compliant while you're at it).

Staying safe by using an employer of record 

Apart from the high cost of establishing a legal entity abroad, you must find effective ways to deal with the challenges and risks described above.

Here’s the truth: unless your organization is a multinational corporation with established international entities around the world, your best bet is to partner with a professional organization that will help you navigate the challenges of your international hiring process.

An employer of record (EOR) is a legal company set up in the country where you’re planning to do business that can handle your payroll, taxes, and legal paperwork.

Choosing your EOR partner is a big decision. For one thing, you need to make sure you find someone you can trust with payroll and taxes. For another, providers don’t all work in the same way.

Owned-entity vs. partner-dependent EOR

There are two kinds of global employment solutions providers. Some own legal entities in the countries where they operate, while others rely on partner networks. Many employers of record provide a mix of some owned entities and some partner networks, depending on the country.

An owned-entity provider owns a legal entity in the country you’re hiring in. That means they’re physically and legally there. They’re already compliant with all the laws, so they can do everything for your organization in-house, from payroll to taxes to IP protection.

The other option is a partner-reliant provider. Partner-reliant providers can’t provide all their services directly to you since they work with a network of third-party companies. 

This means that there’s more risk involved, and response times can be slower. If you have a problem, there may be more than one point of contact. Things may take longer because your point of contact needs to reach out to a vendor.

Third parties can also be risky. Owned entities are quicker to be compliant with local laws. It’s also important to avoid outsourcing your IP protection to a company you don’t know.

EOR or PEO: which one do you need?

The choices don’t stop at owned-entity versus partner-dependent providers, although you should always try to work with a provider with its own entities in all countries where you plan to hire people. You should also know the term “PEO,” which stands for professional employer organization.

The terms “EOR” and “PEO” are often used interchangeably within HR circles. While that’s not exactly wrong, there are a few distinctions. Think of it this way: all EORs are PEOs to some extent, but not all PEOs are EORs.

What does that mean? An EOR legally employs workers in other countries on your behalf. You handle the day-to-day management of your employees, but on the local paperwork, the EOR is technically the employer. 

This structure allows you to employ people legally in other countries, and it’s one reason it’s so important to work with an EOR that doesn’t outsource your employee experience to a third party.

Some PEOs do offer EOR services, but many don’t. A PEO acts as a sort of external human resources department, as it may be able to help you with payroll, benefits, and other HR-related tasks. However, unless it explicitly offers EOR services, it may not be able to help you with your plans for global hiring.

Our own company, Remote, is an EOR that offers full global HR services in all our covered countries. We only offer services in countries where we own a full legal entity. No half-measures here: when you work with Remote, you’re guaranteed the best experience, compliance, and security in the business.

To learn more about the differences between an EOR and a PEO, read our helpful article on the subject.

Tips for hiring remote employees

In many ways, the hiring process for remote, international employees is much the same as the hiring process for traditional, on-premise workers. That said, throughout the hiring and onboarding process, you’ll need to focus on how the job will be done remotely.

The job posting 

You need a clear job description and a solid understanding of how that job will be done remotely, as well as what tools and qualities potential job candidates will need to do the job. Before you start the process, be aware of where your job posting will be seen and what benefits and pay are expected by the people who’ll see it.

The interview 

Know ahead of time how you’ll be conducting your interview and what technology you’ll be using. At this point, most people are well-versed in standard videoconferencing technology, but it’s important to choose a technology that all parties can easily access.

Communication

Good communication is critical to remote teams, and that starts right at the beginning. Be clear about your expectations of applicants, talk to them and their references about their past experience, and understand that qualifications often change from country to country. 

You should also be clear about the job expectations, how you plan to work with your remote team, and what you’ll require of them. 

Your candidates may feel they’re taking a risk by taking a job with a remote and international employer, so make sure you’ve done your homework and can answer their questions. If you don’t have the answer for something, be honest about it and get back to them as soon as possible once you have an answer.

Onboarding

When you’re working across time zones and borders, it’s important that everyone is on the same page as to onboarding. This has to do with having a solid training program in place and with the legal paperwork that comes along with hiring an employee. 

This step is where you’ll likely need help from an EOR.

Common mistakes to avoid when hiring internationally 

Creating a remote workplace is about more than simply hiring some workers online.

While hybrid work models provide a good short-term basis to grow your international hiring, you must update systems and processes that allow remote and globally distributed teams to feel connected, aligned, and valued as highly as employees in the office. 

In the long term, hybrid models can leave people feeling disconnected, overworked, and ineffective due to the mistakes companies often make when they start going remote.

Unless you consciously build a remote-first culture, you risk alienating your remote employees, who may feel like second-class citizens next to their on-site colleagues. Even though remote work is a big perk, feeling left out of on-site bonding activities or perks, like after-work drinks, lunches, or meetings scheduled in person, isn’t good for company culture.

Clear communication is critical when you’re working with a remote team. It can be easy to misconstrue digital communication, especially if you’re working across language or cultural boundaries. The best remote teams document everything. People work in different time zones and need to understand exactly what happened while they were sleeping.

Making sure that you’re anticipating the needs of the remote workforce goes a long way toward aligning your teams, creating a welcoming work environment for all, and retaining the workers you hire from all over the world. 

Check out what our CTO, Marcelo Lebre, has to say about asynchronous working.

Scaling international employment to build lasting success 

Another thing to consider is how you’ll scale your international employment. You may start with one employee in another country, then find more talent in the area and want to expand your business activities.

To prepare for that possibility, choose tools that will grow with your business. And consider that in building a remote-first culture, that culture will have to be scalable, too. 

How do you build a remote-first culture?

Growing a culture takes strategy — a conscious decision to base your team around remote-first values. This means taking a proactive approach to fostering diversity and hiring inclusively.

You must also decide what your company values are and how your team members should embody those values. No matter whether you’re hiring remote designers, marketers, salespeople, or developers, your values must remain consistent and essential.

Be intentional about creating your global team. Don’t silo employees in territories. Encourage people to meet one another in meetings, on productivity platforms, and while working on projects. Not everyone’s work hours will be the same, but everyone should feel they’re working together. In-person gatherings are a great way to foster team spirit.

Employees who reach outside of silos tend to achieve more. So, keep your employees as integrated as possible so they can collaborate.

Your remote culture begins with onboarding

Culture is influenced every time you make a hire, whether you realize it or not. Your onboarding program should clearly communicate your remote-first work principles and practices and make it easy for your new hires to start collaborating without stress. This will help establish a positive work culture.

Onboarding is your new hire’s first experience with your organization, so use this time to introduce them to your company and your culture. Reinforce your communication guidelines by demonstrating the company’s communication standards yourself.

Asynchronous communication thrives on fewer meetings and well-organized documentation, so you should have plenty of available reading (and listening and watching) for new hires to consume.

Consider assigning your new employee a buddy in their time zone, too, so they feel included and know where to turn when they have questions.

14 best practices for managing remote workers

Whether you’re hiring remote workers domestically or internationally, there are a number of best practices that will help you better manage your remote workforce. Here are 14 top-of-the-list tips:

1. Set clear expectations 

From project goals to communication norms, make sure that every team member understands their responsibilities and the standards to which they’re held. This will help minimize misunderstandings and foster a culture of accountability.

2. Leverage technology 

Use various digital tools for project management, video conferencing, collaboration, and communication. 

Tools like Slack, Zoom, Trello, or Asana help keep everyone on the same page, streamline workflows, and facilitate real-time communication.

3. Build a communication-rich culture 

Create an environment that encourages open and regular communication. 

Make sure everyone is well-informed and there’s no room for ambiguity or confusion. Always over-communicate to be on the safe side.

4. Provide flexible work hours

Since remote employees may be spread across different time zones and have varied personal schedules, your company will have to embrace flexibility. 

A good standard practice is to establish core hours for collaborative work and allow flexibility outside of those hours.

5. Trust your employees

It’s not easy to let go when you don’t have daily personal interactions with your workforce, but trust is essential in a remote setting. 

Set expectations and trust your employees to meet them without micromanaging. That way, your team will feel empowered and can be at its most productive. 

6. Establish a check-in routine

Regular check-ins enable you to stay updated on your employees’ progress, provide necessary feedback, and address any issues promptly. 

Routines to try include daily team stand-ups or weekly one-on-one meetings.

7. Promote work-life balance

Remote employees may struggle with blurred boundaries between work time and personal time, so encourage and help them to maintain a healthy work-life balance. This includes taking regular breaks and keeping their work and personal lives separate to avoid burnout.

Encourage self-care. You can even consider offering an employee wellness program.

8. Support professional development

One disadvantage of working from home is that remote employees can feel left out of regular office opportunities. They may even feel they’re becoming invisible to management. So offer resources for remote training and professional development.

This will show that you care about your employees' growth, and it can also help improve their performance and job satisfaction.

9. Promote team building and social interaction

Remote work can be isolating, so plan virtual team-building activities or casual hangouts to cultivate camaraderie and mitigate feelings of isolation. 

This kind of support can help improve morale and cooperation among team members.

10. Supply adequate support and resources

Provide the necessary tools and resources for employees to do their jobs efficiently. This could include software, hardware, or even ergonomics support for their home office.

You should also make sure they have access to mental health resources and support.

11. Recognize and reward good work

Though your team is remote, recognizing their accomplishments is important for maintaining morale and motivation. 

Celebrate successes, give public kudos, and consider a rewards system to acknowledge high performers.

12. Adopt an outcome-based approach 

Since checking in and out at the office is not something remote workers do, focus on the outcomes and the quality of the work rather than the hours put in. 

This shift to outcome-oriented management supports autonomy and productivity in a remote work setting.

13. Invest in training your managers

Managing a remote team requires a different skill set than managing an in-person team. So invest in training your managers on how to handle the unique challenges of remote work.

14. Create a culture of documentation 

A common challenge for remote workers is the sense of losing access to company records, decisions, and resources.

Having easily accessible, written records of meetings, decisions, policies, and other information is essential for continuity, transparency, and onboarding other remote workers. 

Start hiring remote workers now

Hiring your first remote employees, especially those who live outside of your country, can be intimidating. Of course, you’re worried about the risk. It’s hard to know where to start. And compliance, taxes, and costs are all daunting questions.

But making that first international hire is possible — and with Remote, it’s quick and easy.

We fully own legal entities in the countries where we operate and can help companies of all sizes employ workers in those countries. 

For the best possible IP protections, the best experience for your international employees, and the most reliable partner for your global expansion, we’re here and ready to help. Whether you have questions or you’re ready to sign up, we’d love to meet you!

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