Onboarding International Employees
The challenge of onboarding is much more complex for international employees than domestic ones, but it is vital to your global success. When companies fail to optimize their onboarding process and integrate new hires in the company culture, performance, retention and engagement suffer.
“Organizations with a strong onboarding process improve new hire retention by 82% and productivity by over 70%”
Those with weak onboarding programs lose the confidence of their candidates and are more likely to lose these individuals in the first year.
To help international employees engage with your organization’s values, assign key offshore staff to a U.S.-based mentor. This also helps open up direct contact with your global offices.
Exchanging international workers between locations, both for training and work opportunities, is another way to strengthen links with offshore locations and improve global staff engagement.
Onboarding new hires should be a strategic process and last at least a year to ensure high retention. How you handle the first few days and months of a new employee’s experience is crucial.
It takes around six months for an international employee to feel fully settled and invested in a foreign business, so management of those first six months will make all the difference.
The second half of the onboarding experience should involve creating deeper links between your international employees and your brand.
Investing in cultivating a strong and engaging onboarding strategy will save money in the long run. As mentioned, international recruitment is expensive. Replacing talent that leaves can cost as much as twice the annual salary of the person that left.
And it’s not just about money. Culture and job satisfaction is hugely impacted, as well as morale, productivity and lost local knowledge.
Overseas Laws & Regulations
If your business is entering a new market and looking to hire international employees, you will need a legal presence to manage local employment laws and obligations. Of course, these differences vary by country and are complicated. But it’s the small details that matter most.
“Nuances in the law can be easily overlooked and can carry serious consequences”
In China, for example, an employer must make contributions to housing and social care schemes. Legal requirements like this, along with their associated costs, must be accounted for when you expand into new markets.
It’s important to have a firm grasp of local employment law, as this will impact your international employees. If you’re expanding into Europe, you also need to take into account any European Union employment laws that may apply.
Withholding Tax for International Workers
Domestic laws will also impact your international staff. If your foreign-based employee is a non-U.S. citizen and all work will be performed outside the country, your remote worker will need to complete a Form W-8BEN.
Assuming the contractor meets the criteria and properly fills out the form, their wages as nonresident aliens won’t be subject to withholding.
In the event that their status can’t be verified, you may need to withhold up to 30% of their earnings for tax purposes.
Remember, when it comes to withholding tax, the location of the work matters. If the contractor does work from within the U.S., the tax requirements for both parties will change.