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Hiring international contractors is an increasingly popular option among companies looking to extend their reach across borders, thanks in part to the rise of remote work making it more feasibile to have a distributed workforce.
By hiring international contractors, you are able to tap into more diverse pools of talent, while establishing a presence in a new market, without making a long-term commitment to remain. As such, it can be a first step towards establishing a more permanent presence, or simply a way to contract highly-skilled talent at competitive rates in order to complete a particular project.
Independent contractors are professionals who work based on a contractual agreement. Although hiring international contractors may function similarly to hiring international employees for the duration of the time they work with you, from a legal standpoint contractors are self-employed. Unlike employees, international contractors are not directly on the payroll and may even provide their services to multiple companies at the same time.
The flexibility involved in hiring international contractors has seen it become more widespread in recent years. However, it is important to keep in mind that misclassifying workers as contractors when they should be listed as full-time employees according to local employment laws can put you at risk of legal complications and financial penalties, with some high profiles companies hitting headlines in 2023 for apparent breaches.
If you’re interested in hiring international contractors, contact us to find out more. You can also use the Serviap Global contractor misclassification tool to find out if you are at risk of sanctions.
Benefits of hiring international contractors
Hiring international contractors gives you access to a pool of diverse skill sets from around the world, which can be a crucial resource when developing complex projects that require a range of expertise.
Independent contractors often work for a limited time period or on a project basis, so hiring them can be a great way to quickly scale up your workforce for short to medium periods of time, though it is worth noting that contractors can also be hired on a long-term basis.
Contractors will often be seasoned professionals, who will charge a premium for their services, however that expertise can be invaluable when it comes to completing projects according to tight deadlines.
There are also some financial advantages to hiring international contractors that help to mitigate the higher rates than a direct employee would usually work for. Because international contractors are not due the same benefits and perks as direct employees, such as holiday pay, paid time off, or healthcare contributions.
Independent contractors are also responsible for providing their own tools and equipment to undertake the role they are hired for, which represents another saving for companies.
Note that while independent contractors do not enjoy the same labor protections as direct employees, the hiring company will generally still be liable in the case of illness or injury that occurs while undertaking duties for which they are contracted.
4 steps to hiring international contractors
For anyone interested in hiring international contractors, the following four steps are essential.
1) Plan your goals
It is important to define the goals of projects for which you are planning on hiring international contractors. This clarity will enable you to effectively communicate your needs to potential providers and attract those with the necessary qualifications.
A first step is determining the skills and expertise required for the tasks at hand. You also need to consider the time frame, budget, and any legal or cultural concerns that may impact the hiring process and your future working arrangement.
2) Source and recruit contractors
By utilizing online platforms, freelance marketplaces and professional networks, you can identify potential contractors. If you are open to hiring international contractors in a range of locations, you will likely find that certain markets are particularly attractive for certain specialisms.
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Collaborating with a provider with expertise in seeking out talent in multiple markets, such as an employer of record (EOR), is a great option when it comes to identifying jurisdictions where the talent you need is available. An EOR will also be able to support you in the hiring process.
3) Establish clear agreements
When hiring international contractors, the agreement should establish clear parameters, including a detailed description of the scope of work, deliverables, and payment terms, as well as covering intellectual property rights where creative work is involved. Other key provisions include confidentiality, non-compete agreements, and termination conditions.
Every time you hire internationally, compliance with local regulations is a concern. There are many processes to be considered, even though contractors aren’t necessarily part of the company’s payroll. An employer of record can also help you with legal compliance, simplifying these arrangements.
4) Facilitate collaboration
Communication is also key to efficient teamwork. From the get-go, discuss preferred contact methods with the contractors to ensure compatibility. Ensure you have reliable and accessible means of communication, such as email, video conferencing, and project management tools.
Foster a collaborative environment by setting expectations, providing timely feedback, and establishing a sense of inclusion despite physical distance. Additionally, consider time zone differences and establish mutually agreed-upon availability windows for real-time communication.
Hiring international contractors via an EOR
An EOR is a provider that hires and administers international professionals on behalf of other companies. Usually working with an EOR is a way of hiring professionals without needing to set up a foreign entity, with those professionals contracted through the EOR’s local entity but reporting directly to the hiring company.
Under this arrangement, the EOR oversees the payroll and guarantees that all local regulations are adhered to in terms of the likes of vacation time being granted, holiday pay being provided, overtime being paid, and maximum hours being adhered to. The EOR assumes responsibility in the case of non-compliance, so that the hiring company does not have to worry about facing legal complications or financial penalties.
In the event that the hiring company does not already have people lined up to fill roles, the EOR is also able to assist with the recruitment process, and will have an established network and expert understanding of the job market that allows top candidates to be identified and presented to the hiring company.
In many cases, an EOR will offer additional services, such as standalone recruitment sevices, as well as support hiring international contractors, including help with sourcing them if needed. In the event that the conditions under which the hiring company intends to recruit contractors present a misclassification risk, it will often be possible to opt to hire those people through the EOR.
Note that some EOR providers refer to themselves as an international professional employer organization (international PEO), and while many differentiate between EOR and PEO, those terms are also often used interchangeably.
Serviap Global can help with hiring international contractors
At Serviap Global, we assist companies with global hiring solutions. That includes offering international PEO/EOR services, supporting with hiring international contractors, and global talent acquisition services to support with direct hires.
We started out in Mexico in 2010, before expanding throughtout Latin America, and we are widely recognized for our unrivaled expertise in the region. We have since grown beyond the region so that today we are able to assist companies with hiring in over 100 countries worldwide.
Contact us to find out more about how we can support you.
You can also check out the Serviap Global salary paycheck calculator to get an idea of costs involved in hiring in different countries.
