Maintaining a budget and adhering to local complacency laws can be tricky when you manage a team of international freelancers. Not only do you have to worry about international penalties, but you also need to navigate tax protocols and streamline your payroll all at the same time.
Why is International Payroll Complicated?
Even when the stars align, running a successful remote small business is one of the hardest things you’ll ever do because running a business is simply difficult. But if you’re only used to paying US-based employees, you’ll have to deal with different banks and payment processors.
While over 73% of international payments are sent from US-based companies, international payroll requires specialized knowledge in multiple areas to keep everything running smoothly.
Without the help of a country-specific financial lawyer, you’ll spend hours sorting out tax and legal issues. If you don’t have an international payroll system in place before you start hiring remote experienced independent contractors or employees, your reputation could take a hit.
Should You Still Hire International Workers?
After explaining that hiring international workers is difficult, you may consider hiring local talent instead. While that is a viable alternative, you have to consider whether that talent is available in your city or if you have the cash flow and infrastructure to hire more in-office employees.
Hiring a fully or partially international workforce can provide you with several benefits, such as business expansion, access to a wider talent pool, and future-proofing. Since work-from-home is in high demand, remote workers are also more likely to be productive, efficient, and loyal.
How to Manage International Teams and Their Payroll Needs
While remote work comes with several positives, you’ll still need to tackle a few challenges and obstacles before you can successfully manage your team. Here are 5 ways to do just that.
1. Use Software That Can Integrate With Payroll Providers
Using payroll software is a no-brainer for international teams. After all, tools like QuickBooks, ADP Workforce, and Payoneer can make your payroll process fast, reliable, and cost-effective.
What’s more, payroll tools that are made with an international workforce in mind come equipped with compliance checks. These will help you avoid mistakes, maintain accurate calculations, and improve data security. You also don’t need any expertise to fully utilize payroll software.
However, even the best software is inefficient if it can’t integrate with the rest of your tools. For example, your payroll tools need to pull from timesheet apps and software to calculate earnings.
Without integration, you’d have to input information manually, which defeats the point of using the software in the first place. Your goal should be to automate as many tasks as possible.
2. Stick to One Solution for a Problem 99% of the Time
While most problems don’t have a one-size-fits-all solution, many of your international payroll woes do. Organization and a lack of policy often plays a role in why you’re struggling.
Suppose you have 10 international employees. 4 of them use PayPal, 3 use Apple Pay, and 3 use wire transfer. Every time you pay an employee, you have to figure out who accepts what and the fee costs. Your employees then have to wait several days to receive their paycheck.
If all international employees used one payment platform, you’ll save yourself a lot of time and make fewer mistakes. If you stick to one solution for 99% of your problems (one payroll software or one communication app), you’ll reduce confusion and keep your virtual team more content.
3. Favor Flexible Hours and Asynchronous Communication
There’s almost no reason to have structured working hours for your employees unless they’re in an upper management position. Even if you can find one, you’ll ideally reduce their structured schedule, as flexible work hours reduce stress levels, psychological distress, and burnout.
Keep in mind that a flexible work schedule doesn’t mean you won’t have deadlines. However, you’ll need to change the way you communicate said deadlines to your international team.
Asynchronous communication, which includes types of communication that don’t need an immediate response, is ideal for a virtual workplace. For example, you could send an email that has to be answered 48 hours after it’s been sent, so everyone has the same exact deadline.
You should also keep tabs on when your team is available. Communication apps like Slack can show who’s online now, while calendars can give you an overall view of your team’s work hours.
4. Set Clear Expectations in and Out of Your Contracts
Whether you’re asking for a payroll update or you’re discussing the terms of a project, you need to be clear about what you expect. This expectation starts the moment you post a job description, as you’ll need them to use the same tools and follow the right policy procedures.
Make sure there aren’t any loose ends or confusion. Even making an Excel checklist could be an impossible task if you aren’t discussing what colors you’ll use to organize information. At the bare minimum, you need to keep calendars up to date and outline who needs to do what.
When your best efforts fall short, encourage your team to speak to you if they need clarification. Being open and transparent will foster trust in your team and create a collaborative atmosphere.
5. Create a Great Experience for International Employees
We discussed how difficult it can be to find suitable talent in your home country. However, remote workers also struggle to find bosses that offer great experiences for their employees.
Talented employees aren’t having a hard time finding work, so don’t expect them to work for your company just because you’re offering USD. While they’ll want you to offer benefits that are relevant to their needs and country, they also expect you to be knowledgeable of their culture.
A centralized payroll approach that accounts for local law and compliance will enable you to deliver on that promise on the business side, but don’t forget to consider their personal needs.
From organizing virtual socializing events with your team to learning about subtle cultural differences between countries, bonding activities will make team management an easier task.