By hiring remote workers, companies can tackle the talent shortage and drastically increase their applicant numbers. We explain what remote hiring is, what advantages it has, in which cases it is suitable and what options there are for the employment.
Balance missing workers with remote talent
When positions remain unfilled because there are not enough qualified workers available, we speak of talent shortage. In Germany, this situation has intensified in recent years and according to prognoses there will be a further worsening. The reasons are manifold and range from demographic change to shifting requirements and job profiles to an increase in work models such as part-time and freelancing.
Companies can take various measures to compensate for the consequences of the talent shortage. One of them is hiring remote workers. The pandemic has made remote work a reality in many companies. A lot of organizations are taking the step toward a remote setup beyond the times of COVID, or are at least go for a hybrid structure, i.e., with a mixture of employees in the office and at home or traveling. This makes it possible to look for talent outside the home country.
If you want to learn more about talent shortage and how to deal with it, get our free white paper here.
What is remote hiring?
Remote hiring means hiring employees who work outside the office. They may live in another city, but also in another country or even on another continent. Which type makes sense depends on the requirements and goals of the company.
Sometimes there is confusion about the difference between remote hiring and offshoring. Here’s a definition:
Offshoring is the geographical outsourcing of operational processes abroad. A distinction is made between farshoring (distant countries) and nearshoring (nearby countries). The company can become active there itself or outsource and commission another company abroad.
Remote hiring, on the other hand, means hiring employees remotely. In this process, there is no agency or other company involved for which the individuals work. They become a full-fledged part of the team and represent their employer if they have outward-facing roles.
The advantages of remote hiring
Through remote hiring, companies can gain access to a lot more candidates, reduce their personnel costs and create more diversity. The advantages in detail:
Expanding the talent pool
The best people for your team don’t have to live in your region. They may live on the other side of the country, continent or even the world. Remote hiring gives companies access to significantly more potential employees. Even those who only search nationwide considerably increase their chances of finding the right person. Within Europe or even worldwide, the effect is of course much greater.
If team members live in a country with a lower wage level, they are willing to work for a lower salary than the standard in the company’s country would be. For them, this salary is nevertheless attractive, so both sides win. The more people in the workforce this affects, the more costs can be saved.
Making the team more diverse
Employees from different countries and cultures broaden the company’s horizons. Diverse teams are more successful, and remote hiring is a good way to integrate different perspectives.
Checking suitability and possibilities
Remote hiring is not the perfect solution for every company and not for every area of responsibility. If there is no experience with it yet, the first questions are: Is remote hiring suitable for our company at all? And if so, to what extent and with which structure?
These four considerations can help you determine that:
- What language do we use for internal communication? If communication is already in English, people from other countries can easily join the team. If not, they either need to bring language skills or the company language needs to change. This is a big step that should be discussed with the current team.
- Do we have a lot of meetings? If so, it might be difficult to work with people from other time zones. Consider whether meetings can be reduced to a specific time slot, or whether it is better to focus on nearby time zones when searching for talent.
- Do we need fast coordination during the workday? If you depend on the team to sync constantly throughout the day, you should also only hire in adjacent time zones. But perhaps it’s possible to make collaboration more asynchronous.
- Do we have good documentation? Remote work needs thorough digital documentation so that team members can find information independently at any time. All processes should be digitally organized and not require face-to-face communication.
Remote hiring: Two options
But how does the employment work on a legal level when employees do not live in Germany? There are two options: hiring via an employer of record or hiring as a contractor. Both have their advantages.
Hiring the team member as a contractor:
- The team member does not officially become an employee, but is self-employed.
- The contract is concluded directly with the team member without a third party, therefore a higher salary is possible.
- Definitely not suitable for Germany due to false self-employment risk, but other countries may have similar regulations.
Using an Employer of Record (EOR):
- The Employer of Record hires the team member and takes care of contract, salary, taxes and local specifics.
- Contracting takes place with the Employer of Record, not with the team member.
- A monthly fee per employee is charged for the service.
Which option is better depends, for example, on the country of the new team member, the industry and the company’s wishes.
Are you interested in remote hiring? We can help you find the right talent in no time. Learn more.