4 Ways to Expand Your Workforce Overseas

You’ve thought about expanding your company overseas. It’s been on your mind for a while, and now you want to make your ambitions a reality. The thing is, you need to find a good workforce overseas to turn your company into a global operation.

Making this move can result in twists and turns you weren’t anticipating. You know it’s not going to be as simple as hiring a team in a neighboring state. Yet the complexities involved in international workforce expansions can quickly overwhelm you. Before you’re in a situation where you’ve taken on more than you can handle, it helps to know your options. Here are four ways to onboard a global team and what these choices entail.

1. Work With a Professional Employer Organization

Professional Employer Organization
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Say you’ve got your eye on France. You’ve done your research and plan to legally register your business there. Your due diligence also tells you the market is ideal for your company’s product lineup. You can’t wait to get started.

But you don’t have the in-house team to navigate the differences in taxes, employee benefits, and payroll. The legal intricacies in France aren’t the same as they are in the U.S. You’re not ready to handle the details, but you still want to forge ahead. Working with a professional employer organization is a possible solution.

A PEO will oversee the back-end human resources functions for your French employees, including payroll and benefits administration. However, your company will remain their legal employer and manage your international team’s work responsibilities. Your business will also be responsible for complying with French labor laws. A PEO functions as an HR partner but does not assume legal liability or become the employer on paper.

2. Bring Independent Contractors Into the Fold

Bring Independent Contractors Into the Fold
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Hiring contractors overseas can be a way for your company to test the waters. Independent contractors have the local market exposure and knowledge you don’t yet. They can add this expertise to your business’s information bank while you determine whether your expansion plans will pan out.

Since contractors are usually responsible for their own taxes, benefits, and equipment, these arrangements may be more cost-effective. Your company is wading into the global talent pool one foot at a time. It’s easier to pull out if your plans to expand go sideways.

That said, working with contractors isn’t without risk. You may still need to register or establish a legal entity in the country where you’re growing your freelance workforce. You’ll want to examine the country’s employee versus contractor classification laws with a fine-tooth comb. These stipulations may differ from what they are in the U.S. In general, however, you can’t classify someone as a contractor if your business controls how or when they perform their work.

3. Undertake a Merger

Undertake a Merger
Undertake a Merger

Sometimes, the most efficient and practical way to expand your workforce overseas is to merge with another company. The other business is already established in the international market. Plus, you’ll have access to the company’s local resources once the merger is complete. These resources include staff members and all the knowledge they bring to the table.

While mergers can be a way to inherit an international workforce, they typically occur via mutual agreement. It’s not a hostile takeover; the current leadership of the company you’re targeting has to be amenable to the deal. Even so, it can take months of negotiations to iron out the details. There are additional legal considerations, such as how the country’s government oversees mergers and acquisitions.

Using a merger to expand your workforce in an international market is also a long-term commitment. You’ll invest your business’s financial and non-financial resources as part of the deal. The possibility of resistance to change among the staff you’re acquiring is something you’ll need to take into account. But a merger is a viable option if there’s a good match between the two organizations’ cultures and it makes fiscal sense.

4. Establish a Subsidiary on Your Own

Establish a Subsidiary on Your Own
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You can establish a full subsidiary in another country if you have the in-house resources to manage an international workforce. With this move, you’re not working with an HR partner. You’re handling everything from compliance to payroll and benefits administration by yourself. You could, however, still work with local recruitment agencies to find the team members you want to bring on board.

In this scenario, you’ll be making a substantial commitment and investment. The process of establishing a legal subsidiary in another country involves no small amount of bureaucracy. You’ll need to prepare for the paperwork, back-and-forth communication, and any number of expenses. In addition, your company will need a legal and accounting team well-versed in the country’s regulations.

Establishing a subsidiary and managing a global workforce with in-house resources usually works for larger companies. These businesses have the connections and financial means to navigate the process. In most cases, larger organizations are establishing an international subsidiary with the intent to stay. Months of careful planning have already gone into the endeavor, so additional waiting time may not be a factor.

Growing a Global Workforce

In the world of business hiring international team members isn’t something you do the very next day. You’ve got to think through the legal implications and options before you formulate a strategy. Determining what levels of risk and commitment your company is comfortable with will point you toward the most feasible choice. Whether it’s working with a PEO or handling everything in-house, you can onboard the global team you need.