When you’re expanding a business internationally, it makes sense to have employees in the destination you’re expanding to.
That’s because it provides you with unrivalled understanding of the local market, ensures your customers have a point of contact in their own country, and helps to establish trust and permanency with investors. However, hiring workers in another country is easier said than done. Here are some key things you need to know.
There are ways of working around your most obvious problem – the logistics
The biggest challenge to any UK-based business hoping to hire overseas is the geographical distance between the two countries. Plane fares are expensive, and the time and resources it will cost other areas of your business can make it hard to justify searching for US recruits. However, there are ways around these problems, and they all centre on using technology to your advantage.
For instance, use professional connection platforms such as LinkedIn to find potential employees, and conduct your initial interviews through Skype, Google Hangouts or FaceTime. It’s undoubtedly a good idea to make a final hire after conducting an interview in person, but performing the initial interviews via technology will help to keep your costs down significantly.
You can use local contacts or work with a specialist recruitment firm
As you’ll discover as you progress with your venture to the US, local contacts are an invaluable resource. Ask them for recommendations for new hires, tap their knowledge of the local market, and see if they can put you in touch with a recruitment firm. In fact, working with a specialist recruitment firm might be the way to go if you’re hiring overseas as they’ll have unrivalled knowledge of your industry, as well as access to some of the best talent. Factor it into your budget for international expansion if you think it’s an idea worth pursuing.
You’ll need to establish a subsidiary company if you want to directly hire employees
If you want to hire under your own company– something that’s often a better option than falling into the ‘contractor trap’ or not having any employees on the ground at all – you’ll need to establish a US subsidiary. But, setting one up is notoriously risky, expensive and time-consuming, which is why hiring US employees presents such a challenge to UK based businesses.
However, there is actually a way around this that is completely legal and straightforward: you can appoint a US employee to your company by having an existing US company hire them on your behalf. Companies that do this help overseas businesses who are expanding to the US by being the legal employer (responsible for payroll, 401(k) and employee benefits), but the employee will perform tasks exclusively for you, carry your company’s business cards and even have your company’s email address. Consider it if you’d like to ‘test the water’ before you fully commit to forming a subsidiary – many UK businesses find it’s a low risk way of getting a team on the ground.
If you’d prefer to hire employees directly, you’ll need an EIN
On the other hand, if you’d like to hire employees of your own rather than using a third party to hire workers for you, you’re going to need an EIN. An EIN is an Employee Identification Number – something required from the Internal Revenue Service (the equivalent of HMRC in the UK) in order to be able to identify you – allowing you to operate your business in the US and pay your employees while showing their tax contributions and benefits. You can apply for a EIN number through the IRS website; it’s better to do this sooner rather than later if you’re determined to be the ‘legal’ employer of your US workers.
As you can see, there’s a lot to know about hiring overseas as a British business. But, there’s lots of information available online, from third parties, and from businesses who have been there and done it themselves.
