Produced by Total Back Office Solutions Ltd
Twenty years ago, the barriers for international recruitment were made up of things like the expense of long distance travel and communication. Now, in the twenty first century, you can fly from Manchester to Rome for less than £50, and the internet has created a world of instant global communication. Industries as diverse as aerospace engineering, finance, and retail have all found themselves as members of the ‘global marketplace’, opening up a wide range of new opportunities for recruitment professionals which many have been quick to snap up.
Even though there are still those who have reservations about international placements, it is clearly the way the market is moving. With the UK barely scraping into the top ten in the ‘Hottest Markets in 2020’ report, it’s clear that companies who are prepared to move towards international recruitment are the ones who will come out on top.
To help alleviate the concerns of those of you who were surprised to hear that, and to guide and inform the rest, here’s Total Back Office Solutions Ltd’s list of the most important things to consider when it comes to international recruitment.
1. Currency – international placements will almost always be invoiced in a foreign currency, so be prepared to set up a currency account to receive payments, minimise currency risk, and avoid delays. Liaise closely with your bank and make sure you’re aware of any possible associated charges, and have a fully formed set of terms.
2. Funding – it is commonplace for recruitment agencies to rely on funding agreements made with invoice finance companies, especially those agencies which focus mainly on contractor placements. Some invoice finance companies will be unable to fund internationally, and some may provide you with a list of countries which they are prepared to operate within, so it is important to consult with them before making any international placements, in case alternative arrangements need to be made.
3. Taxation – income from some countries may be subject to a ‘withholding tax’, which will be liable, as a percentage of the total, on any payment leaving the country. However, there are many countries which have a ‘double taxation agreement’ in place to prevent doubled taxes by reducing or even eliminating them.
4. Contract law – international contract templates will not be governed by UK law, so seek legal advice before agreeing a contract. The same goes if you revise your own contract templates to accommodate full international cover – always consult a legal professional.
5. Credit control – may process which are simple and every day when done domestically such as correct invoicing and credit control take on a new dimension when done internationally, and rely of a strong back office team to carry them out correctly. Close consideration needs to be given to factors such as language and time zone differences, especially when it comes to following up with international debtors.
6. Candidate payment – it is vital that you ensure the correct payment of international candidates by paying to a registered company who can be trusted to vouch for the tax residency status for the candidate. This provides some security against chain laws which can make agencies responsible for incorrectly deducted tax.
This may seem like a lot to consider initially but there is plenty of help and information available to the budding international recruiter. Total Back Office Solutions can support and manage 100% of your back office processes both domestically and internationally, and along with their sister company Fund My Contractor can supply funding and financing for recruitment across 38 countries worldwide. Call now for more information on 0845 881 1112 or email info@tbos.co.uk today.
Written for Total Back Office Solutions Ltd by Stewart Roberts, Commercial Director.
