Do you know how to hire international employees? If you’re looking to extend your company’s reach into global markets, hiring qualified candidates in other countries can help with that effort.
But if you don’t have a local entity, you may be wondering if it’s possible to recruit applicants in places like the UK.
Thankfully, you can, even if you lack a registered business structure there. Read on to learn how to recruit UK talent without a local entity.
Determine Your Hiring Strategy
It’s possible to hire in the UK without a formal business presence there, but you’ll need a hiring model to make it happen. You have a few options. And the right one may be determined by your size, financial status, and overall preferences.
You can hire individuals in the UK as individual contractors, for example. In this scenario, individuals will give you invoices for their work on your company’s behalf.
While independent contracting is a simple approach, it does come with some potential drawbacks. These individuals are essentially company employees, meaning that the UK may reclassify them. You could end up paying stiff penalties as a result.
With the Employer of Record (EOR) option, a third-party entity in the UK will do the hiring for you. You won’t need to establish an entity of your own and deal with payroll responsibilities. This option is appealing for its simplicity, and you can feel confident you’re staying compliant.
If you do set up a UK entity, you’ll gain more control over the hiring process, and you won’t need to outsource it. But be prepared to wait months for the entity to be set up, and know that you’ll have to tackle payroll and compliance issues.
Account for Benefits and Pensions
Keep in mind that you’ll need to budget for certain entitlements with UK hires. Employees in the UK are guaranteed at least 28 days of holiday pay each year. They can take parental leave and receive sick pay, assuming they are eligible.
Additionally, account for mandatory workplace pensions. Any employee over age 22 will be automatically placed in the pension program, and minimum contributions are 8% each year. 3% comes from the employer, while 5% comes from the employee.
The pension program is a requirement in the UK. But employees are allowed to opt out. Be aware that they’ll be re-enrolled every three years, though.
Calculate Employment Costs
Remember that providing an employee with a salary is just one part of the hiring process. You’ll need to budget for more than a salary.
Plan on making room for pension contributions, leave, and Employer National Insurance contributions. The insurance may be around 15% of an employee’s earnings, and you’ll be responsible for paying it. You may also have fees for your EOR.
Don’t be blindsided by unexpected costs. Instead, do the calculations in advance using resources from a reputable employer of record services in UK. You’ll gain access to a more accurate total compensation number that can help you anticipate future expenses.
Verify Legal Status and Run Payroll
Are you hiring employees who are legally allowed to work in the UK? Before issuing any contracts or paychecks, it’s important to check.
Make sure to evaluate passports or visas, and adhere to UK guidelines for doing checks. Failing to verify legal status can lead to fines.
In addition, you need to be mindful of the UK’s Pay As You Earn (PAYE) system. Be careful about deducting income tax and insurance contributions. All payments must adhere to strict government-mandated deadlines, as well.
It’s wise to turn to an EOR to oversee processes related to status and payroll. When an EOR handles the details, your risk of getting flagged for failure to comply should decrease. They’ll also be careful with all personal data, help with employee onboarding, and act as a reliable resource throughout the hiring process.
Recruit the Best UK Talent
Finding excellent UK employees without a local entity requires careful planning and research. While you can simplify some aspects of the process by going with a contractor model, you may be better off with an Employer of Record. You won’t have to worry about payroll, benefits, or onboarding with EORs.
With the right approach, you can start bringing in top talent to help your organization grow.
