In our increasingly interconnected world, international hiring has evolved from being a novelty to a strategic necessity for many businesses. Organizations are turning their sights to global talent pools to fuel their growth, diversify their perspectives and establish a global presence. 

However, the path to successful international hiring isn't without its challenges. In this article, we'll dissect the many challenges of international hiring and propose a possible solution for overcoming them. 

10 challenges with international hiring

Despite the many benefits of overseas hiring, several challenges exist. From high costs to talent acquisition woes, here are the top 10 challenges facing companies hoping to hire global talent. 

1. Cost

The initial allure of international hiring often comes with the potential for cost savings, particularly if hiring from regions with lower living costs. However, these potential savings can be quickly offset by a host of unexpected expenses. For one, hiring international employees generally requires a local entity – which can be expensive. 

Even if you forgo the local entity and opt for outsourcing or sponsoring the employee's move to your country, you're still looking at high costs. Outsourcing companies are known for high, hidden fees, and sponsoring employees isn't cheap – especially with the rising visa rates and payroll taxes.  

2. Challenges with outsourcing companies

Outsourcing has long been the go-to solution for businesses looking to leverage global talent. Yet, one of the major pain points when dealing with outsourcing companies is a lack of transparency. Hidden costs, unclear processes and a general opaqueness about how things are run can create a sense of unease, making it difficult for businesses to fully trust and derive maximum value from these partnerships.

Additionally, the lack of direct control over talent, potential issues with work quality and the risk to information security are all hurdles businesses may have to overcome. These issues can end up causing significant disruptions and can even harm the business's reputation and bottom line.

3. International laws and regulations

One of the most intricate aspects of international hiring is the maze of international employment laws, tax systems and contract stipulations. Businesses must ensure that they comply with their own country's laws and the laws of the country where the international employees reside. This involves a high level of legal know-how and a deep understanding of international business operations.

4. Communication and coordination

Coordinating across different time zones, overcoming language barriers and navigating cultural nuances are all part of the package when managing an international team. These communication hurdles can lead to misinterpretations, inefficiencies and a disconnect between team members. While these challenges aren't dealbreakers, they're still noteworthy hurdles when expanding globally. 

5. Employee engagement and retention

Fostering a cohesive company culture and ensuring employee satisfaction becomes a lot trickier when your team is spread across the globe. Creating a sense of belonging and maintaining morale among remote employees requires a dedicated effort and strategic planning. (Check out some strategies for fostering employee engagement in remote teams here). 

6. Setting up a local entity

One of the options for hiring international employees is setting up a local legal entity in the country where you wish to hire. However, establishing a legal presence in a foreign country is not a straightforward process. It involves understanding and complying with local business laws, financial regulations and administrative procedures, which can be time-consuming, costly and risky.

7. Navigating visa laws and fees

Obtaining and maintaining work visas for international employees come with its own set of challenges. It involves dealing with administrative hurdles, potential costs and legal complexities that can divert valuable resources from core business operations.

8. Cybersecurity

The risk of data breaches and cyber-attacks intensifies when dealing with a remote, international workforce. Businesses must invest in robust cybersecurity measures to protect sensitive data and maintain compliance with data protection regulations across different jurisdictions.

9. Benefits and compensation structures

Providing equitable and attractive benefits and compensation that conform to local standards and expectations is crucial to attracting and retaining international talent. However, understanding and implementing these can be a complex and challenging process – especially if you're trying to hire employees from different parts of the world. 

10. Talent acquisition and management

Attracting, hiring and managing talent from different cultural and professional backgrounds requires a strategic and empathetic approach. This can be a daunting task without the right knowledge and resources. It can be especially challenging to hire employees from other countries where you don't have any partners or existing knowledge of the region or customs. 

How an Employer of Record (EOR) simplifies international hiring

An Employer of Record (EOR) is a company that serves as the legal employer for your international employees, handling all the administrative, legal and compliance aspects of international hiring. When you hire through an EOR, you're essentially "renting" the EOR's existing infrastructure and legal entities in each country, allowing you to tap into global talent pools without setting up your own foreign subsidiaries or dealing with complex international employment laws.

EORs simplify international hiring in several significant ways. First, they handle all the legwork of employment compliance. EORs have in-house experts or extensive networks in each country who are knowledgeable about local employment laws and regulations, taking this burden off your shoulders.

Secondly, EORs offer cost-effectiveness. Setting up and maintaining legal entities in multiple countries can be a lengthy and expensive process. But with an EOR, you can bypass this entirely. The EOR's existing legal infrastructure means you can start hiring in new markets quickly without substantial upfront costs. 

Thirdly, EORs mitigate risk. By acting as the legal employer, the EOR takes on the employer's liabilities, providing protection for your company. They handle all the complexities of employee management, such as contract enforcement, benefits administration, payroll and tax compliance. Not to mention, unlike an outsourcer, with an EOR, you work directly with your international employees, maintaining transparency and control of your operations and IP. 

Ultimately, an EOR provides a streamlined and risk-mitigated solution to international hiring. It's a cost-effective way to expand your global reach, tap into diverse talent pools and maintain full compliance with international labor laws, all without the headache of managing these complexities yourself.

Overcoming the challenges of international hiring

International hiring challenges require thorough understanding and strategic management. Navigating the global talent maze is not a journey businesses should undertake lightly, but neither is it one they should shy away from.

With the right partner, the potential benefits of harnessing the global talent pool far outweigh the challenges. An Employer of Record could be the ally your business needs to transform these challenges into opportunities.

At Outstaffer, we make it easy to find, hire, manage and equip top employees from around the world in just a couple of clicks. Plus, with our #WorkFromAnywhere technology, like managed devices and employee monitoring, we give you everything you need to thrive. 

Want to learn more about how we can help you overcome the challenges of international hiring? Schedule your demo today.

Jul 21, 2023

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