The pros and cons of hiring talent abroad: A comprehensive analysis

In today’s competitive job market, finding the right talent can be a daunting task for employers in the UK. The ManpowerGroup Employment Outlook Survey (MEOS Q4) reveals that a staggering 80% of UK employers are struggling to find the skilled professionals they need. Despite this challenge, 49% of IT employers are planning to hire in the upcoming quarter. With employee flexibility being a key attraction tool, does this position remote international workers as the solution? In this article, we explore the pros and cons of hiring talent internationally.

The key benefits

Broadening the talent pool: The ongoing talent shortage in the UK makes it challenging to fill roles that require specialised knowledge and skills. Hiring talent from abroad provides a strategic solution to access a broader pool of candidates with the necessary qualifications. Removing location preference is particularly powerful when we are looking at very niche or highly in demand skill sets. For instance, if your business requires a ServiceNow developer in Manchester there are around 100 potential candidates for you to target. However, if your role can be performed remotely in Europe you now have in the region of 14,000 professionals to target.

Purely increasing the potential talent pool can have a huge impact. On top of this, your employer value proposition may be more impactful to candidates in other countries. You may also now be able find locations with lower demand for the skills you are hiring. Rather than struggling to find the essential skills locally there is now the opportunity to find the very best skills from across the globe.

Cost reductions: In addition, to attracting the best candidates, there is also the possibility for cost savings. By leveraging data and harnessing lower-cost or lower-demand markets, there is significant potential for reducing headcount costs. A study by Deloitte found that companies can save up to 30% on labour costs by hiring remote workers from overseas. By utilising a truly data-led approach we believe this could be even greater and with wage inflation of 7.8% in the last quarter (ONS), in the UK, this could now be more critical to ensuring business continuity.

Diversity, Equity, Inclusion and Belonging (DEIB): Hiring internationally grants access to a diverse, global talent pool with a wide range of experiences, perspectives, and skills. Operating in global markets becomes more accessible when a company hires employees with diverse linguistic and cultural backgrounds. This enhances communication with partners, clients and customers worldwide. Moreover, it promotes cultural competence within the organisation, fostering a sense of belonging among employees. These benefits enhance reputation, innovation, cooperation and financial performance, making it a socially responsible choice for businesses.

As examples, Airbnb has benefited from hiring diverse talent to help it expand into new markets and to provide better customer service to its global customer base. Unilever has used diverse talent to develop new products and services that are tailored to the needs of different cultures.

Increased productivity: Many companies report increased productivity when working with global remote teams. 72% of businesses with a distributed international remote workforce model have seen improvements in productivity. Distributed work has two major benefits: employee retention to ensure work continuity and productivity. Decision-makers in fully remote companies attest to a 40% increase in employee productivity, a 36% improvement in employee retention, and a 36% increase in employee engagement from hiring remotely. Employers highlight that global remote teams produce more with less effort, complete tasks more quickly, and offer a broader skill set that encourages innovation.

The key challenges

Legal and compliance challenges: Hiring talent from abroad requires compliance with an ever changing and increasingly complex set of international laws and local regulations. With large fines levied for the likes of worker misclassification, falling foul of these regulations can be extremely costly. Mitigating the risks here can be an incredibly time-consuming process for businesses, also requiring highly specialist knowledge.

Payroll complexities: For a business only running a UK payroll it is a big leap to running an international one. Typically requiring establishing new international entities or relying on third-party providers, this can open a business to a whole new range of risks in addition to costs and tax implications.

HR-related issues: HR departments face various challenges when recruiting talent from outside the UK; candidate attraction and selection, ensuring fair compensation, tax compliance, legal and employment regulations, and employee satisfaction and retention. HR must play a strategic role in addressing these complexities to successfully integrate and retain multinational talent.

Cultural and geographical differences: Overcoming linguistic barriers, cultural integration, onboarding, remote work management and coordinating across different time zones can be additional hurdles in hiring remote talent. Clear processes, inclusivity, language support, efficient onboarding and cultural sensitivity in workplace policies are essential to address these challenges.

Conclusion

Hiring international, remote workers offers numerous advantages, such as attracting and retaining the best talent, reducing headcount cost, enhancing diversity and increasing productivity. However, businesses must navigate a myriad of legal, payroll, HR-related and cultural challenges to make international hiring successful. To ensure success businesses need a truly global partner. Experis’ Cross Border Solutions can provide access to global data and talent from ManpowerGroup’s operations in over 80 countries. Our data can support in navigating international supply and demand to source the best skills at the best price with our local expert teams ensuring compliance.

For more information on Experis Cross Border Solutions, download our brochure here. If you are ready to get in touch with our team then you can do so by filling out a quick form.