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🔎 How to hire international tech talent

Building a distributed workforce and hiring tech talent globally adds a level of complexity to hiring and your operational processes. There are several hiring methods you could choose to address this. However, let’s first unpack the most important factors to hiring developers internationally:

Considerations for global hiring​

Compliance and labour law​

Each country has a different set of rules, laws and regulations. This relates to pay, paid absences and sick leave, vacation provision, bonuses, lunch breaks, minimum contributions to health insurance and pension, and taxes.

Visas and work permits​

Developers may require visa sponsorship to work and live in a country. To hire these individuals, the employer usually needs to take over their visa sponsorship — unless the candidate has a self-employed visa for that country. To sponsor a visa, a company must be based locally and offer permanent employment.

Payroll, compensation and benefits​

  • To pay employees in a specific country, you need to set up payroll for that country.
  • You need to design a compensation model that’s suitable for distributed teams. For example, you can determine salaries by location, or have location-independent salaries — each has its pros and cons.
  • Statutory requirements for benefits differ for each country and your team members may have different needs based on where they reside.
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Here’s a useful extra resource to research labour laws, compliance and mandatory benefits per country:

Global hiring options​

When hiring developers from across the globe, these are your main options to ensure team members can be employed and paid in line with statutory requirements:

Register an entity in that country so that developers can be hired permanently and added to your payroll. Your company handles all the processes related to expanding to that country.

“There’s definitely a high barrier of entry when you first open a local entity since there’s a lot of initial costs involved. But after it’s done, it’s less complex to employ new team members as you scale.”

  • Zeynep Tunalioğlu, Recruitment Manager at Mobiquity

(Read more: How Mobiquity Succeeded At Global Expansion)

More resources

Making use of an Employer of Record (EOR)​

An EOR acts as the employer in that country on your behalf, by handling the payroll, benefits, taxes and compliance of new team members for you.

"I must say that changed the whole landscape for us. We would make one payment to a South African bank account, and they would then make the payments to the various country employees on our behalf. In terms of the legislation, it’s much easier and far simpler."

  • Jeff Miller, CEO and co-founder of GoGetta

(Read more: How to Win at Hiring Quality Remote Tech Talent in Africa)

Hire independent contractors​

Hiring a team member as a contractor is also an option. This means the employer has less involvement in visa sponsorship and paying employment tax, and the contractor will invoice you monthly or per project.

We’ve researched each of these options, and spoke to Azaria Beukes (VP of People at OfferZen), Aaron Chazen (Partnerships Manager at Playroll) and various other hiring teams to get the pros and cons of each:

Use a global payroll provider/EORProsCons
  • Quick access to more talent:
    You gain access to a wider global talent pool and can expand quickly into new markets.

  • Less complexity:
    An EOR lessens the complexity of hiring in a new country, by dealing with the ‘red tape’ of local tax compliance and employment laws for you.

  • Relocation support:
    Depending on the country’s legal laws, an EOR can often sponsor a developer's visa on your behalf if they need to relocate. You’re also able to retain tech talent in cases where existing team members are looking to relocate to a country different from where the employer is based.

  • Easier experimentation:
    You can more easily experiment in new markets to see if it’s a viable option for growth. If it’s not, exiting the country is less complex than shutting down an entity.

  • Assistance with market research:
    The EOR can share information on local payroll requirements and labour laws for specific countries before you make the decision.

  • Support for adding contractors to your payroll:
    EORs can assist in adding any contractors to their platform to make these payments on your behalf.

  • You might have less control over the developer experience. One option to address this is by using employee engagement platforms for a remote workforce (such as Kosy, for example).

  • Additional costs:
    You will pay additional management fees when hiring a new team member.

  • Extra collaboration required:
    Potential for friction in everyday workflows, since there’s collaboration required with the EOR partner.
    • Establish a legal entityProsCons
    • Long-term cost benefit:
      After the initial set-up costs, the cost of adding another employee is negligible.

    • Avoid risk for bigger teams:
      If your team grows to more than 50 employees in one location, you can better avoid permanent establishment risk by establishing an entity.

    • More control over candidate experience:
      You have more direct control over the developer experience during the hiring and onboarding process. From the candidate’s perspective, there’s less potential confusion and your offer can look more stable.

    • Local support for employees:
      If you have a physical office, the employee may have a local branch that they can depend on that is based in their country of residence.

    • Costly and time-consuming
      when setting up:
      It is a costly and time-consuming process that requires ongoing management. You typically need to make use of various specialists to establish an entity.

    • Not immediately cost-effective:
      Typically, it’s only feasible once you have 20+ employees in a country to offset the costs.

    • Complex to close an entity: It is difficult and costly to roll up and exit the country, especially if you want to retain the employees in that location
    Employ contractorsPros Cons
    • Less involvement in the visa application:
      The visa application is driven by the employee, who usually applies for a freelance or self-employed visa. The employer is less involved in this process.

    • No tax requirements for the employer:
      The employer wouldn’t need to pay taxes for the employee, they would need to account for this themselves.
    • Misclassification risks:
      Hiring contractors is less suitable for long-term work. If you do so, you risk misclassifying a full-time employee as a contractor, which leaves you liable to penalties.

    • Less control of day-to-day management of employees:
      The employee would be entitled to work for multiple companies.

    • Highly dependent on the candidate:
      This is only a viable option if the candidate truly wants to work as a contractor, and wants to apply for a self-employed visa as opposed to other appealing visa types (such as the EU Blue Card).

    • No benefits on offer:
      Less appealing to the candidate, since you cannot offer a full contract with benefits.

    Ready to start hiring international developers? Sign up to OfferZen to access 200+ new developers weekly across Europe and Africa.

    Did you know?

    If you want to make use of a global employment platform/ EOR service, you can get a discount through OfferZen when making use of any of the following services:

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