As businesses look to expand their reach on a global scale, hiring expatriate employees can bring significant benefits. However, it is a solution that can often alienate employers due to its complex legislation and compliance complications. Here, we take a look at both the benefits and drawbacks of hiring expats, as well as identifying how an employer of record (EOR) can allow you to easily employ expats.
What is an expat?
First things first, what is an expat? An expat, or expatriate, is defined as ‘a person who lives outside their native country'.
It is important to note that employees sent on short or long-term business trips are not classed as expats. Instead, an expatriate employee both lives and works in a foreign country, fully relocating their lives and oftentimes their family. Understandably then, hiring an expat has significant ramifications for both businesses and individuals alike.
The pros of hiring expats
Overcome international recruitment challenges
Recruitment, especially international recruitment, is one of the most challenging tasks for any business. Utilising your current workforce to facilitate your global expansion, as opposed to searching for talent in a foreign country, can be a great way to overcome this. Then, once relocated, your expat employee can grow a locally-based team while on the ground, create a smooth onboarding process and remove any time delays brought on by recruitment.
Create a consistent culture
Developing and maintaining a positive and consistent workplace culture can be challenging when your employees all share the same base, nevermind when you expand to an international location.
Relocating an existing employee can help you to transport your hard-earned workplace culture to a new location, starting your global journey as you mean to go on.
Stay in the know
Your international expansion is always going to feel daunting, no more so than if you are hiring new employees located abroad. However, if you hire an expat, they are already equipped with expert knowledge about your business, its processes and its expansion plans. Therefore, they can be your eyes, and knowledge, on the ground, really helping to shape your international headquarters to its fullest potential.
The cons of hiring expats
As is to be expected with an aspect of global expansion, hiring expats does have some drawbacks, namely compliance and cost.
Cost
Often when relocating an existing employee, employers will offer a bespoke relocation package. This can help to cover the relocation costs of an employee and their family, any accommodation costs, visa sponsorship or training. There can also be extra costs for drawing up international employment contracts or overcoming foreign business legislation.
All of these extra costs need to be weighed up against the cost-savings that hiring an expat can have, for example reduction in international recruitment costs, reduction in business training costs and so on.
Compliance
As with any aspect of international growth, compliance is critical when hiring an expat. While your employee may be staying the same, their location and therefore their employment rights will change drastically. From employment contracts to payroll, tax to working hours, there is a lot to understand and comply with. Failure to do so can jeopardise your company’s growth as well as making your employee feel unsettled in an already unfamiliar country.
And, there aren't just employment laws to comply with. Complying with international business laws as well as cultural best practices is also crucial. While your employee may bring with them expert knowledge of your company, they cannot be expected to shoulder all responsibility for your company’s compliance with foreign employment laws. It is therefore vital that adequate training and resources are allocated to ensure this.
Employee wellbeing
Whether suggested by you as the employer or the employee themselves, having an employee relocate to an unfamiliar country is a big ask. Even for the most committed employee working and living in a new country, as well as uprooting your family, is bound to be a big upheaval.
This can cause mental and physical illness as well as causing employees to feel demotivated at work. It is therefore in the best interests of both the employer and employee for as smooth a transition abroad as possible.
Our previous article details some top tips on how you can manage employee relocation in a way that is best for your employee and your company.
Hiring an expat with an EOR
As you can see, hiring an expat can be a complicated process, one that requires dedicated resources, planning and commitment in order to reap the benefits that expat employees can bring.
By working with an experienced employer of record, such as Leap29, your company can take full advantage of hiring expats whilst having the complexities of employment laws, taxes, visas, contracts and relocation logistics taken from your shoulders and handled compliantly.
As well as handling employer compliance, we can also support with benefits, administration, HR and employee relocation to ensure that your employee is supported throughout their expat journey.
For more information on how you can hire expats compliantly and take full advantage of our EOR services, contact our team today.
