A Guide on Employing Foreign Workers

December 21, 2023
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When countries face the crunch of finding the right talent, they often look forward to expanding their workforce horizons across borders. Talent shortages in the US have tripled in the last decade, with IT, engineering, accounting and finance sectors reporting positions that are hardest to fill. It is no surprise that firms are open to employing foreign workers. 

Employing overseas workers can bring new insights and experiences to a company. However, one must be aware of how to hire international employees. Employing foreign workers requires completing certain applications, visa processing, authorisations and tax compliance. 

This article will clear your doubts about hiring a foreign worker and the steps involved—from finding the right talent to onboarding them. 

Benefits of Employing Foreign Workers

Companies should consider these advantages of hiring overseas employees: 

  1. Access to Global Talent: Hiring workers from outside your borders gives you access to a broader pool of talent. 76% of hiring managers face the challenge of finding quality talent. Access the best talent by expanding your search across countries. 

For example, India is a resourceful destination for hiring highly skilled tech talent. In 2022, there were over 3.8 million tech professionals in the country. 

  1. Promotes Inclusion and Diversity: Hiring workers from abroad guarantees a diverse workforce that offers modern problem-solving techniques, work styles and skill sets. Everyone working toward a common goal can bring in more productivity. 

    “An equal, diverse and inclusive workplace is a key driver of resilience and recovery." - Manuela Tomei, ILO Conditions of Work and Equality Department.

  2. Cost-effective: Hiring foreign employees from developing nations can result in cost savings. The average salaries here are significantly lower than the pay scale in developed nations. A study finds that a developer's salary in India is three times less than in the US. 
  1. Gain Market Exposure: Having a workforce from different countries gives you an understanding of different work cultures. With regular interactions, you can learn about market demands, gain insights into what works and then adapt your market strategies accordingly. It can also help you overcome language barriers in some regions and understand local requirements better. 

Requirements for Employing Overseas Workers

When examining how to hire someone from another country, you must follow the local rules and regulations of your home country as well as the labour regulations of the country you plan to hire from. 

Here is the list of requirements you must meet before employing foreign workers: 

Obtain Necessary Certifications 

Business owners must meet their legal obligations when employing non-citizens to work in the country. The requirements vary from country to country. 

  • In the US, companies must seek certification from the US Department of Labour (DOL) to admit a foreign employee to the workforce. 
  • In India, all foreign workers must register themselves at the Foreigners Regional Registration Officer (FRRO) if they plan to stay in India for more than six months. Work permit in India for foreigners has this additional mandatory step dependent on the duration of your stay. 
  • In the UK, a sponsor licence must be obtained from the Home Office so that a Certificate of Sponsorship can be issued to the non-citizen worker. 

Since every government works in favour of its citizens, businesses should be able to prove why they rely on foreign talent instead of hiring natives. Companies facing talent shortages must prepare the evidence that no qualified local worker can fill that position. 

Secure Work Visas

On finding the right candidate, an employer must process their international employees' work visas and permits.

When employing foreign workers, knowing the different types of visas available in your country is crucial: 

  • In the US, H-1B Visa is a non-immigrant visa classification for people who perform services in a specialty occupation that requires a bachelor’s degree or equivalent. Occupations that qualify for the H-1B visa are typically in fields such as technology, finance, engineering, architecture or more.

    Indians continue to top the H1-B visas with about 3.20 lakh visa applications approved in 2022.

  • In India, foreign workers migrating to the country for work must apply for either a Business Visa or Employment Visa. The work permit requirements are also different for these two categories.

    A work permit is issued on a precondition that the employer has a registered branch in India. 
  • For recruiting non-citizens in Europe, each of the Schengen member countries has its own visa policies. Depending on the citizenship of your employee and the country you’re based in, the visa can be obtained.

  • If you’re planning to hire a foreign contractor for a definite time period, you can apply for temporary work visas available in certain countries. They are also called short-term work visas. Australia, New Zealand, China, Canada, Luxembourg, and the UK have such work permits available for non-citizens. 

Tax Compliance

All foreign workers are subject to the same payroll taxes as citizens of that country. For tax compliance, your worker must register for necessary documentation. 

Check whether your country has signed tax treaties with other countries to avoid double taxation. 

It is a good idea to verify the tax laws before hiring foreign workers. To stay compliant, be aware of local taxes and laws in the employee's home country when hiring remote workers. 

How to Hire International Employees

Follow these steps when you wish to hire a global workforce: 

  1. Identify Your Hiring Needs

Just knowing that you need to expand your workforce is not enough. Analyse what are your hiring needs by asking yourself the following questions:

  • Do I need a full-time worker or an independent contractor?
  • Which country should I target to find the right employee? 
  • What skills does my candidate need to possess? 
  • What is my budget for employing foreign workers? 
  • What are my expectations from the foreign worker?

Answering these questions will help you frame a comprehensive job description to attract the right talent. It will also focus your search on a particular region and look for candidates with the necessary skills and qualifications. 

  1. Promote The Job Openings 

On framing the perfect job requirement, post on relevant job boards and social media pages to reach the desired audience. The professional networking service LinkedIn has an audience of 99 million in India, ranking only after the US. It is thus a top choice for job seekers to find their next career move. 

If you are hiring freelancers, you should post your opening on relevant freelance boards like Upwork, Toptal, Fiverr, Truelancer, etc. 

You can also network with professionals abroad in the same field who may have some recommendations about potential candidates. 

  1. Conduct Interviews and Tests

Following the application review, decide which candidates are most qualified for the position to move on to interviews and tests. Conduct at least two rounds of interviews to understand the qualifications and abilities of your potential employees. During these discussions, clearly lay out your project requirements. Ensure the candidate is fully aware of the scope of work and expectations. 

If you need candidates with specialised certifications, take a test to assess their technical skills and expertise. You can give them specific assignments to check on their quick-thinking abilities or problem-solving skills. For freelancers, ask them to share their portfolio and past client testimonials. 

  1. Onboarding Process

Onboarding a candidate is the next important step in employing foreign workers. A structured onboarding process offers an initial peak into a company culture. The Society for Human Resource Management study notes that a structured onboarding process can improve retention rates by 52% and productivity by 60%. 

Foster an inclusive attitude towards the new member, so they feel a sense of belonging to the organisation. A good onboarding process will improve the employee experience and work in your favour. Have an interactive feedback system where international employees can express their opinions and suggestions. 

  1. Prepare Relocation Packages

Another critical aspect of how to hire international employees includes arranging their relocation. Relocation for work is a big deal and requires two-way communication between the employee and employer. The shifting process can be stressful and expensive, but it is a one-time cost that must be met. 

A typical relocation package includes: 

  • Packing service
  • Moving coverage
  • Temporary housing 
  • Travel reimbursements
  • Other expenses (relocation of families, licence fees, etc)

You can negotiate with the employee about what can be covered in the relocation package. In such a case, it is best to partner with local experts, such as staffing agencies or employers of record (EOR), who handle all the administrative work of hiring international employees.

How Much Does it Cost to Hire A Foreign Worker?

The costs associated with international hires depend on various factors such as the type of workers, the country you’re hiring from, legal fees and visa requirements. If you are hiring a full-time employee who will work from your US-based company, the filing fee to sponsor an H-1B employee typically ranges from $3,000 to $4,000.

In addition to this, there will be other expenses, such as background checks, salaries and relocation packages. The costs will increase depending on the number of foreign employees you hire. 

Ways to Find and Hire Foreign Employees

If you are still uncertain about how to hire foreign workers on your own, it is best to seek external help and local assistance from experts. Here are some options for recruiting international workers: 

Set Up a Local Subsidiary: One of the ways to be a part of the global market is by expanding your branch office in foreign territories. You can set up a local subsidiary and employ workers from that country. However, this is a relatively expensive process in terms of time and money. This is more suited for well-established organisations that want to tap into newer regions and have the budgets for it. 

Seek Help From Staffing Agency: A staffing agency is an intermediary between hiring companies and job seekers. It will fulfil all your hiring requirements by finding the right talent match. Staffing companies manage the entire recruitment process, from screening to training and onboarding new employees. 

Rely on Experienced EOR: For employing overseas workers, partner with an experienced EOR. They can aid you in hiring and dealing with labour laws across different countries. Moreover, they are a trusted partner that devises employment contracts, benefits and global payroll. 

Undertake International Hiring With Rapid

India is a powerhouse of tech talent. However, hiring from India can seem challenging with the diversity of its culture and local laws. For foreign companies who wish to add more Indian talent to their workforce, partnering with Rapid EOR can do wonders. 

With more than 25 years of deep-rooted experience in the country’s dynamic landscape, Rapid is aware of all the nuances of global expansion. From effective payroll solutions to localised benefits for a multifaceted task force, we offer it all under one integrated platform. We have cutting-edge technology to offer instant data, analytics and more on remote talent management. Seek benefits by accessing our extensive service marketplace. With Rapid, all your queries on how to hire international employees vanish with our seamless processing. Let us help you connect with qualified talent, undertake background checks and hire immigration experts from India compliantly. 

Schedule a demo today to learn more.

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