With the development of the internet, constant improvements to international travel, and instantaneous free communication via video conferencing, recruitment is among the myriad industries which are part of a global market.
As the UK economy struggles to get back on its feet after narrowly avoiding the dreaded triple-dip recession, recruiters across the country are looking to expand into their niche on an international scale, drawn by the lure of positions which need filling and potentially large financial rewards.
Sectors in the technology industry such as IT, energy and telecommunications are among those who are taking the bull by the horns in terms of global recruitment. However, it’s not just the language barrier you’ll come up against; you will need to consider minimising a variety of risks before you can begin recruiting internationally.
- Currency – as the pound sterling is exclusive to Britain, it’s likely that most international placements will be invoiced in a different currency, such as the euro or dollar. Be prepared to set up a currency account to receive payments, minimise currency risk, and avoid delays. Negotiate the terms of the account with your bank, and be sure to find out about associated charges.
- Funding – many contractor placement agencies rely on funding from an invoice finance company. If this is the case, make sure to consult with them as soon as possible as the risk exists that they will be unable to supply funding for international debts. Before making any international placements, get hold of a list of currencies they can fund and stay within that list.
- Withholding taxes – some countries’ taxation policies include a ‘withholding tax’, which is tax liable on any payment leaving the country, as a percentage of the total. This depends on the policies of the country and whether or not there is a double taxation agreement in place to reduce or eliminate the deduction.
- Contract law – some international clients will maintain that their contract templates are used, and these will not be governed by UK law. Alternatively, you might have to revise your own contract templates to retain full cover, so obtaining legal consultation before agreeing a contract is important.
- Credit control – correctly invoicing international placements and ensuring the timely recovery of international debts relies on having a strong back office. Considerations such as language and time-zone differences are especially important to ensure the effective follow up with international debtors.
- Candidate payments – it is especially important to ensure correct payment of internationally placed contract candidates by paying to a registered company who can account for the tax resident status of the candidate. Doing so avoids becoming implicated within chain laws which exist in some countries, making the agency responsible for tax payments which are not deducted correctly.
Fund My Contractor and Total Back Office Solutions have the facility to supply funding for international placements in 38 countries worldwide, operating in most world currencies to ensure your placements remain compliant. TBOS can also support and uphold your back office in domestic and international recruitment.