International hiring comes with an abundance of questions, one in particular being whether it's best to hire a contractor or a full-time employee. While every company is different, this guide should help you weigh up whether a contractor or employee is best suited to your international expansion.
Why companies hire a contractor?
Hiring a contractor, whether abroad or at home, is a quick and fairly easy way to hire appropriate talent for your business. With a defined period to their contract, contractors can act as stand ins for permanent roles, act as extra resource during busy periods or act as a specialist for short-term projects. The lack of commitment beyond a contractor's fixed term is especially lucrative to businesses who want to expand globally as it can allow them to test the international market without making a long-term investment. They can also act as a stopgap until you find the perfect full-time employee for your international venture. Likewise, a contractor's swift onboarding process is especially beneficial as it cuts that all important time to market for expanding businesses.
Outsourcing work to contractors also means you don't have to commit to a legal entity, saving your company time and money during your global expansion. Despite this, there are still laws that regulate contractors that vary from country to country and misclassification of contractors can cause non-compliance and consequent in fines. Meanwhile, hiring on short-term contracts can leave your business on uncertain ground when it comes to establishing a stable, relied upon international team for both you and your clients.
Why companies hire full-time employees?
Hiring full-time employees is often the long-term, end goal for expanding companies. While contractors offer a quicker and simpler route into a global market. Recruiting full-time, permanent employees is a sure-fire way to establish your company on an international scale and entrenches a company's long-term interest and position in a new market. Meanwhile, establishing full-time employees helps to create a thriving international team which in turn aids recruitment further down the line.
With a full-time employee, unlike with contractors, companies have more control over the work produced by international employees allowing you to emulate your company's high levels of service at every stage of your expansion. Likewise, permanent employees are more likely to be fully committed to their role, unlike contractors who may be working multiple roles or looking out for their next project. Overall this means you can shape the standards of their work and establish a committed, high-performing team who emulate your company ethos.
The verdict: contractor or full-time employee
Ultimately, this decision is dependent on your business and its current needs. If you are looking to hire quickly, for a short-term project or to test a new market then a contractor may be the best fit. However, if you are wanting to establish yourself in an international market with a committed, secure team then a full-time employee would be better suited for both your business and international growth plans.
If you are looking to hire internationally without setting up a legal entity Leap29 can be the trusted recruitment and PEO partner to help you reap the benefits of an international market without the risk of non-compliance.