You already know that recruiting the right people is one of the most important things you can do for your company. To make the most of the global marketplace, you need to acquire high-level talent from overseas. You could carry out the recruitment in-house – but this is risky.
Whether recruiting employees, contractors or managers, here we set out seven reasons why you should outsource recruitment for your international expansion.
Recruit & hire your team with Horizons EOR services.
What are the chances that, in the global marketplace, the best staff are based in your country of origin? Not very high. By outsourcing recruitment (sometimes known as Recruitment Processing Outsourcing (‘RPO’), a business is far more likely 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? Consider:
- Process efficiencies
- Recruiters will have established processes in place for the entire hiring funnel, allowing them to recruit more cost-effectively than your business typically can. 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 can select potential candidates at a cheaper price than you generally can.
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 foreign countries, can take significantly longer and delay your entry into a new market.
Higher Quality Recruits
Whilst you may have a thorough knowledge of the quality candidates in your own country, you’re unlikely to have an extensive understanding of overseas employment markets. By outsourcing your talent pipeline to experts who specialize in foreign markets, you’re better able to secure a high-quality workforce.
Reducing Staff Turnover
Successful recruitment is not just about acquiring exceptional staff – it’s also about acquiring staff who stick around. It has been estimated that 80% of employee turnover is the 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 implement successful employee onboarding procedures and ensure that new employees know what they are expected to do.
Outsource Recruitment Networks
By doing the recruitment yourself, it is likely that you’ll 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
The decision to outsource recruitment isn’t just about finding someone to hire and giving them a contract to sign. You also need to make sure that you’re recruiting in a legally compliant manner. Professional recruiters operating in overseas markets are familiar with the key compliance requirements of a given country.
They can 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 your recruiter doubles as a Professional Employer Organization (‘PEO’), they may be able to hire your workforce directly. You may also want to consider whether you set up tripartite agreements – establishing how the relationship between the contracted party, the client company, and the PEO will work.
- The type of recruitment
- Is your workforce being hired as independent contractors, employees, or on another basis (for example, as an agent)? Employers are generally held to more compliance obligations than those hiring independent contractors. In some countries, contractors could also be classed as employees by the courts.
- It is possible that by recruiting certain workers, you open your company to corporate tax liability in a new country. This is because an 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. This should 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. Additionally, you must ensure that workers abide by data protection and privacy regulations (such as the General Data Protection Regulation or ‘GDPR’), that protects 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 creating their own video-conferencing or messaging software. Why build your own, when solutions like Zoom and Slack are readily available?
Enterprises that are expanding internationally need to focus on their core business, and deciding not to outsource recruitment can be a distraction from this.
Outsourcing functions that are not your core business can be a crucial cost-saver. Outsourcing key functions like payroll, human resources, administrative services, employee relocation and recruitment can be particularly useful when expanding overseas into territories you are not familiar with.
You can read more about the different services that can be outsourced at ASO vs PEO: What’s the Difference?
As the only Global PEO with a dedicated, in-house recruitment team, Horizons will source, hire, and onboard your global workforce. By connecting your business to high-level talent across all industry verticals, we enable you to successfully grow your international operations.
Horizons specializes in bespoke recruitment outsourcing solutions for your international expansion. When outsource recruitment with the help of our specialists, we support your business in the following areas:
- Provide market research on the employment market in your target country.
- Lead the search for candidates, through external platforms and our internal network of global connections.
- Present you with a final shortlist for your approval.
- Provide ongoing post-recruitment outsourcing support that includes the drafting of employment contracts, salary and benefits negotiation, payroll, tax withholding, and benefits administration, HR integration, and legal compliance.