You already know that recruiting the right people is one of the most important things you can do for your company. In addition, making the most of the global marketplace means being able to acquire talent from overseas. You could carry out the recruitment in-house – but this is risky.
Here we set out seven reasons why you should consider outsourcing your international recruitment.
What are the chances that, in the global marketplace, the best value staff happen to be based in your country of origin? Not very high. By outsourcing recruitment (sometimes known as Recruitment Processing Outsourcing (‘RPO’)), a business is commonly able to retain high-value recruits, at a cheaper price. In one 2012 study, two thirds of respondents identified cutting costs as the fundamental reason for outsourcing recruitment. How might outsourcing recruitment result in cost savings? Savings can result from:
- Process efficiencies. Recruiters will have established processes in place which allow them to recruit more cost-efficiently than your business is likely able to. For example, they may have specialized recruitment technology which you do not have access to;
- Market knowledge. With an in-depth understanding of the market in your target country, professional recruiters may be able to select potential candidates at a cheaper price than you could.
Professional recruiters know how to get a new team up-and-running as quickly as possible. They may be able to recruit within days, rather than weeks or months. Trying to do this yourself, especially in other countries, can take a lot longer and delay your entry into a new market.
Higher Quality Recruits
While you may have a good understanding of quality candidates in your own country, it is unlikely that you will have such a good understanding of overseas employment markets. By outsourcing your recruitment to specialists who understand foreign markets, you will increase the likelihood of securing a top-quality workforce.
Reducing Staff Turnover
Successful recruitment is not just about acquiring great staff – it’s also about acquiring staff who stick around. It has been estimated that 80 percent of employee turnover is a result of poor hiring decisions. Using professional recruiters can be a useful mechanism for choosing the right staff and thereby reducing staff turnover. This is particularly effective if the recruiter can put in place the right employee onboarding to ensure that the new workforce know what they are expected to do.
By doing the recruitment yourself, it is likely that you will only be able to hire applicants to the job. By contrast, using a professional recruiter gives you access to workers who are ‘on their books’, who might not otherwise apply.
Legal and Compliance Issues.
Recruitment isn’t just about finding someone to hire and giving them a contract to sign. You also need to make sure you are recruiting in a fully compliant and legal manner. Professional recruiters operating in overseas markets will be familiar with the key compliance issues and requirements in that given country. They will usually be able to provide you with advice or ongoing assistance on legal, contractual, and compliance issues. Consider, for example:
- The parties to the contract. Who will the contract be between? If you recruiter doubles as a Professional Employer Organization (‘PEO’), they may be able to hire your recruited workforce directly. You may also want to consider whether you set up tripartite agreements setting out how the relationship between the contracted party, the client company and the PEO is going to work;
- The type of recruitment. Is your workforce being hired as independent contractors, employees, or on some other basis (for example, as an agent)? Employers are generally held to more significant compliance obligations than those hiring independent contractors. In addition, in some countries, contractors could be classed as employees by the courts;
- Taxation. It is possible that recruiting a certain worker, may open up your company for corporate tax liability in a new country. This is because that individual could constitute a ‘permanent establishment’ for tax purposes. You also need to be familiar with how turnover and payroll taxes work in the new country;
- Anti-competition clauses. Do you want to restrict your contractors or employees from working for your competition? You will need to ensure that there is a clause to this effect in your contracts which does not count as an ‘illegal restraint of trade’ in that country;
- Confidentiality and privacy. It is essential that the confidentiality of your company assets is protected in the contracts that are entered into by your newly recruited workers. In addition, you must ensure that workers abide by data protection and privacy laws and regulations (such as the General Data Protection Regulation or ‘GDPR’), that protect the personal information of customers in the European Union.
There is a reason that, in spite of the COVID-19 Pandemic, businesses have not been busy creating their own video-conferencing or messaging software. Why build your own when solutions like Zoom and Slack are available? Enterprises building their overseas expansion need to focus on core business, and recruitment can be a distraction from that.
Outsourcing functions that are not your core business can be a crucial cost-saver. Outsourcing key functions like payroll, human resources, and recruitment, can be particularly useful when expanding overseas into territories you are not familiar with.
New Horizons Global Partners specializes in bespoke recruitment solutions for your international expansion. We can:
- Provide market research on the employment market in your target country;
- Lead the search for candidates, including through the use of our own networks;
- Present you with a final shortlist for your approval;
- Provide ongoing post-recruitment support including drafting contracts, negotiating pay and benefits packages, employment solutions, as well as associated payroll and human resources activities.