1. Opening a Legal EntityWhile your goal is to onboard international hires from a foreign country, the conventional way is to legally run the business by opening an entity in the foreign country where you wish to hire candidates according to the country's tax and labor laws. Opening a legal entity might be ideal for companies with a considerable budget and targeting to employ many international employees from the targeted country. In this case, a local PEO can offer tremendous help by working with you as your co-employer to improve your HR functions and increase your compensation, insurance, and benefits savings. However, establishing a local entity can be time-consuming and expensive and require a thorough understanding of the foreign country's corporate, payroll, and labor laws. For instance, expanding into Malaysia and the Philippines is an attractive option; however, companies entering these countries must pay 24% and 25% of corporate tax, respectively, according to PWC's latest tax rates 1.
2. Hire Without EntityIf you intend to hire remote workers worldwide to expand your global business, especially within a short period, engaging an employer of record (EOR) is a perfect choice. EOR solution provider will act as your legal employer in hiring, paying, managing, and onboarding international employees from different countries. Before onboarding your international employees, EOR services can help in these areas:
a. Compliant employment agreements EOR will draft locally compliant employment contracts upon job offers and ensure that your employment agreements are legally bound and meet all the local jurisdiction's requirements.
b. Compliance with local employment legislation An EOR understands how difficult it can be to keep up with various legislation in different countries. Therefore, EOR will constantly advise the update of the local employment laws, taxes, and regulations to your company. In such a way, your compliance risks are significantly reduced to zero.
3. ROI in Global Onboarding ProgramWhy is onboarding important in a global company? Global companies often have staff members from diverse backgrounds with different cultural norms and expectations. As a company that hires people from all over the world, enabling employees to feel respected, heard, and encouraged is essential. Orientation is an event that lasts a few days, typically conducted with a group of new joiners of the month and using a one-way communication method. The objective is to brief all new employees about the company's basic information that they need to know and the essential tools, directories, and policies in general. On the contrary, onboarding is usually an ongoing process from the employee's start date until 90 days or even up to 1 year after the employee joined the company. It is conducted in a two-way communication method, personalized and customized according to the new hire's specific role. Regarding the ROI benefit of an effective onboarding program, 54% of organizations reported greater new hire productivity and 50% improved retention rates as new employees often use their first six months of experience to determine whether they will commit themselves to the new company in the long term2., according to Aberdeen Group's research. “The sooner new hires are assimilated into the organizational culture and become productive and inspired, the sooner they will make a successful contribution to the company.”
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4. Global Onboarding ChecklistBy following a comprehensive global onboarding checklist, organizations can ensure new hires have a smooth and successful transition into their new roles. What to include in an onboarding checklist?
a. Goal-setting and performance expectations: Set monthly, quarterly, and annual goals and provide ongoing feedback and support to help them achieve their objectives.
b. Communication: Ensure the new hires can access all relevant communication tools, including email, messaging apps, and video conferencing. A directory and organization chart helps to let the employee feel where they belong.
d. Technology protocols: Provide them with the necessary hardware and software tools and ensure they have access to it. IT security policies and data-sharing boundaries in a distributed workforce are essential.
e. HR documentation: Latest in-country employment laws.
f. Benefits package: Different countries' benefits, including health insurance, retirement plans, and vacation policies. Ensure the information is accessible via the company's shared working platform and easily accessible in the search bar.
g. Dates for check-ins: Schedule 1 on 1 meet-ups with superiors, even with the top management occasionally, to let employees feel truly part of the team.
h. Cultural awareness: Provide training on cultural differences and sensitivities, including local customs, language, and etiquette; this is especially vital for employees working with clients and other team members from different countries.
i. Job training: Including company policies, procedures, safety and compliance requirements, and personalized training according to the employee's role in job execution.
j. Mentoring and networking: Assign a work buddy to assist the new employee in adjusting to the new working culture and making connections with colleagues in different departments.
k. How can an EOR help in effective onboarding? An EOR service provider can handle duties like background checks, reference checks, visa processing, recurring payroll, local taxes, and compliance issues. Additionally, they can assist with training, orientation, and cultural integration during onboarding.
5. Global Onboarding ExperienceOnboarding international employees from different countries will not be possible without digital solutions. Gartner3 suggested these 4 digital approaches:
a. Personalized onboarding digital experience: Create onboarding journeys based on different employee personas. An empathy-based design to communicate the employee value propositions (EVP) will help to improve retention rates, which increases the chances of acquiring loyal employees.
b. Develop a scalable and automated persona-based onboarding process: Identify all stakeholders, define onboarding tasks, and methodically assign them to the respective owners to deliver these journeys.
c. Support more talent sources by utilizing technology investment: Extend the onboarding process beyond new hires to encompass other employees' transition journeys.
d. Capitalize immersive technology by using AR (augmented reality) and VR (virtual reality): AR or VR elevates the onboarding experience, creating a memorable, engaging event that fosters social connections, especially in a remote work environment.
6. Global Payroll SolutionAfter onboarding new employees in different countries, the major hassle and challenge will be the recurring international payroll. Are you figuring out how to send money across various countries using international bank transfers? What if I tell you that an EOR can assist you in processing payroll in different countries, whether locally, remotely, or even to your contractors and freelancers? By doing this, the appropriate tax records will be prepared accurately, submitted on time, and avoid any potential issues with the various international bank transactions. AYP offers a simple onboarding procedure. Only one dashboard is required for the entire process to be automated:
- You are NOT required to pay your employees in their local currency through cross-border payment.
- AYP will take the responsibility to pay your employees according to the real-time exchange rate every month.
- Should there be any dispute regarding the payroll, leaves, and benefits, AYP will advise accordingly as your legal employer.
- A single dashboard to control and monitor your entire workforce's payroll data: Including total workforce spending, total hires, number of payslips, employee by country and industry, and revenue per employee hired, allowing smarter business decision-making.
- Self-service is allowed for employees to view and access their payslips and tax-related documents online.