How to Avoid Troubles while going global in the Era of Globalization

We are currently at the peak of information technology; it has never been easier to communicate on a global scale as it is today. Globalization is the only way to expand into new markets. Many businesses are spreading their influence into foreign markets to grow their brand and increase sales. However, setting up an international labor force is the biggest challenge when it comes to expanding into foreign countries. It can be rather cumbersome and time-consuming. If you are looking to hire human resources overseas, here are some of the hoops you will have to jump through:

Work permit

An employee must have a work permit to work abroad or for a foreign company. Its acquisition may take months in some regions. Different countries have different and often stringent work permit requirements. Most of these processes involve legal compliance, proof, and qualification certification. Some governments make it considerably difficult to bring in foreign workers to get their citizens employed instead. Others are opposed to specific foreign investors as they can be believed to pose unfair competition to local businesses.

Visa

After securing a work permit, an employee needs a visa to travel to a foreign country. The granting of a visa may depend on several factors that neither the employer nor the employee controls. Diplomatic relations, political climate, and other social factors may hinder one from being granted a visa or at the least require fulfilling several demands. In addition, a visa is only issued for a limited period, after which it must be renewed.

Foreign Labor Laws

Different countries have different labor laws. These laws dictate the employee-employer relationship, employee rights, and other work-related social and wellbeing requirements. Specific labor laws may force an employer to reevaluate the entire human resource structure. In some countries, labor laws are complicated and detailed, to avoid the hefty fines and penalties imposed on lawbreakers, most employers opt for a legal consultant specialized in labor law to handle such matters.

Three Engagement Models of Global Employment

As an employer onboarding and tasking employees in foreign countries, you are responsible for handling all the legal matters involving permits, visas, and labor laws. On top of that, you are also responsible for the employees’ wellbeing – housing, transport, ideal work environment, and the like. To ease the burden, international employers opt for one of three conventional services to assist in global employment.

1. Independent Contractor

You can hire the services of independent workers in foreign markets on a contract agreement rather than on a more tedious employment basis. Independent contractors are flexible and can tune their efforts quickly to promote your services and products in a market they are already familiar with. Business often hires contractors for sale purposes in an affiliate arrangement. The problem with contractors is that they are not representative of the company or brand. Chances are, a single contractor may be working for several companies simultaneously. Time and resources must be divided among the various clients, including competitors. Besides, a contractor is not under the direct control of the employer.

2. Local Staffing Agency

Local staffing agencies work in the foreign country, source, vet, and hire local employees on your behalf. They take care of all the staffing within the local country’s legal framework, eliminating the need for legal consultation. They also serve on contract as an intermediary between the employer and employee. Local staffing seems like an ideal solution for global employment. The problem is these agencies are localized in their host countries. If you are looking to employ workers in multiple countries, you’ll have to deal with several agencies in all the different countries. There are also some significant risks while working with local employment agencies. You are not in control of the hiring process. The agency does the sourcing and vetting of qualified employees. You may have an unproductive labor force if the vetting process is not thorough. The contact with the agency is agreed upon within the agency’s host country’s legislation. This means you’ll still need some familiarity with the contract’s foreign law. You will still need to set up a payment platform for foreign workers. Usually, this is done by international funds transfer services and banks. Some countries are open to international funds transfers, others need persuasion, and currency exchange fees are included.

3. Establishing a Legal Entity

To grasp foreign law, you might find yourself hiring a legal entity to guide you through the legal framework of hiring employees in a foreign country. A local legal team with vast experience in labor laws in different countries is ideal for smoothening the hiring process since they know all the hurdles to jump. A legal entity also saves you time filling out legal paperwork and speeds up hiring. Legal counsel and assistance are not cheap. Hiring international employees is lengthy, and retaining a legal entity for an extended period may be very expensive. A legal entity will only cover matters regarding the law; you will still need to put in much time and effort to resolve other hiring affairs.

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Global Employer of Record by Acumen International

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