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As a company that provides compliant international payroll, as well as recruitment services, we often see scenarios where businesses haven't considered the implications or practicalities of hiring someone in a foreign jurisdiction after an individual has been identified for a role.
This article looks into some of the risks with hiring workers (staff and contractors) internationally and the importance of understanding these prior to reaching out to the candidate market.
International payroll considerations
There are many issues that can arise throughout the engagement process putting both individuals and the end-hiring company at risk. Some factors to consider include:
Tax compliance
Whether engaging permanent staff, temporary workers, or self-employed contractors, it is essential to consider whether the engagement model is compliant with country-specific tax legislation. If your supply chain of contractors or workers are non-compliant, when engaged to undertake works, this can lead to reputational, financial and in the worst-case legal impacts to your organisation if found to be in breach of regulations.
Avoiding financial and criminal liability
Failing to have appropriate procedures to avoid tax avoidance or evasion within your supply chain can be in contravention of the UK Criminal Finances Act 2017, there are similar pieces of legislation across the EU. By ensuring appropriate supply chain oversight, this risk can be mitigated.
Employment law
With the world having a more transient workforce, both around the EU and further afield, it is essential that your workforce is engaged in line with local laws governing employment. With every country having nuances in this area, it is essential that this is understood prior to workers being engaged.
Rotational working
Working in various locations or on a rotational basis means that all the above factors may have to be considered for both locations (subject to the type of work being delivered, the length of rotation and the locations the projects are being delivered in).
Why does your international recruitment team need to understand this?
Early consideration of compliance requirements prior to commencing recruitment can ensure that the process is quicker and smoother for all parties. Some aspects early engagement with international compliance can help with include:
Candidate experience
Candidate experience throughout the hiring process is essential and having recruiters or compliance teams that can provide candidates as much clarity, as early in the engagement process, as possible leads to a more favourable candidate experience.
Increasing talent pools
For niche roles, when your internal or external recruitment teams have clarity on which geographic regions talent can be sourced from (stemming from understanding of country-specific legislation), this can also increase the chance of filling requirements in line with project demands.
Forecasting costs
Engaging with staff or contractors in various jurisdictions can have different cost burdens and different net retention values. This can lead to varying levels of employment costs dependent on country or region. By reviewing tax compliance impacts for both the candidate and the client prior to sourcing the role, the client can budget roles appropriately and manage candidate expectations throughout the recruitment lifecycle.
What next?
By understanding both international recruitment and compliant payroll processes, your projects can be delivered more effectively and minimise risks / confusion. Should you be delivering a project in a new jurisdiction we recommend reaching out to a trusted partner to understand the compliance processes prior to candidate engagement.
NRL offers both international recruitment and compliant international payroll of contractors or employees (including Employer of Record services). To understand more about these offerings, feel free to reach out to me on LinkedIn.