The COVID-19 pandemic and the following lockdowns accelerated the adoption of remote work. Advancements in collaborative tools have catalyzed this rapid development as well. According to a survey by Upwork, 32.6 million Americans will be working remotely, which has almost doubled in 5 years since the pre-pandemic levels. 

Thanks to remote hiring, companies now have access to a wider talent pool, a significant cost advantage. They are also able to offer flexible modes of work resulting in enhanced employee satisfaction. For global companies and startups, hiring remote workers is a cornerstone for building a vibrant and diverse team at scale.

However, remote hiring poses a unique set of challenges that can dampen the benefits it accords. To help you overcome these challenges, we’ll explore 12 key challenges employers face in remote hiring, along with solutions to handle them effectively.

12 Remote Hiring Challenges (+Solutions) For Local and Global Employers

Challenges in Recruitment

1. Conducting Effective Remote Interviews

The increased adoption of remote work has necessitated a shift from traditional in-person interviews to virtual interviews. While virtual recruitment offers greater convenience and flexibility, it also presents the following challenges for HR teams:

• Limitations in assessing non-verbal cues and technical skills: In-person interactions can help gauge a candidate’s body language, eye contact, and other non-verbal cues. Remotely these causes can be harder to read, making it difficult to assess a candidate’s enthusiasm, confidence, or honesty. Similarly, observing a candidate tackling a technical assessment will be limited.
• Challenges in evaluating soft skills and cultural fit: Skills like communication, collaboration, team work, and problem-solving are crucial for the candidate’s success. Interviewers might miss out on subtle cues about the candidate’s interpersonal skills.
• Difficulty managing a high volume of applications from diverse locations: Remote jobs attract a high volume of applications from across time zones, making it difficult to assess and shortlist candidates effectively. Scheduling interviews can be a logistical nightmare.

Solution:

• Leverage comprehensive video interviewing tools: HR should leverage video interviewing platforms, like VidCruiter, HireFlix, TestGorilla, etc., with features like AI-driven skill assessment to evaluate technical and soft skills effectively. For instance, platforms like HireVue and Spark Hire offer AI-driven insights that help recruiters assess the candidate’s nonverbal cues. 

• Use advanced Applicant Tracking Systems (ATS): ATS platforms like Greenhouse and Lever streamline candidate sorting and tracking, interview scheduling, and communication processes, helping recruiters manage a high volume of candidates efficiently.
• Incorporate techniques for soft skills and cultural fit assessment: Use behavioral questions, scenario-based questions, and multiple interviews with team members to assess the soft skills and cultural fit.

2. Reaching a Global Talent Pool

Accessing and attracting qualified candidates in different geographical locations can be challenging, especially for companies without a strong international presence. Each geographical area has its unique job market dynamics, cultural nuances, and professional networks, making it difficult for companies to effectively reach and engage potential candidates.

Additionally, many employers don’t have sufficient local knowledge to discern which institutions produce the most qualified graduates or which cities have a high concentration of skilled professionals in specific industries.

Solution:

• Creating a strong employer brand: Employer branding on social media platforms, positioning the company as the best place to work, is a crucial aspect in attracting and retaining top talent. 
• Leverage digital advertising: Global job boards like LinkedIn, Glassdoor, and Indoor can be utilized to increase visibility. Publishing digital job postings and ads on these platforms, targeting their unique user base, can improve the quality of candidates.
• Partnering with industry-specific job boards: Partnering with local consultants and using specialized platforms like Turing and Andela can help effectively find talent and access key educational institutions. 

Remote Hiring Challenges: Employee Benefits

A competitive benefits package is key to attracting and retaining top talent globally. According to LinkedIn’s Global Talent Trends (May 2023), compensation and benefits are employees’ top priority when considering what they want out of work.   Here’s how benefits administration can pose a challenge for remote hiring.

1. Designing Competitive Benefits Packages

Creating appealing benefits packages that’s applicable internationally is challenging because employee preferences for benefits vary with regions. For instance, healthcare benefits are a top priority for US employees, while European employees place more value on generous parental leave policies.

Additionally, benefits preferences can differ greatly depending on age groups and career or life stages, further complicating the process of creating a one-size-fits-all package.

Tailoring benefits packages to meet these diverse needs is complex, as it often involves managing multiple vendors across different countries.

Solution:

• Implement a flexible benefits program: Offer a flexible benefits plan that lets employees choose benefits based on their preferences and needs.
• Partnering with an Employer of Record (EOR): EORs can act as an one-stop shop to hire and disburse benefits compliantly without partnering with multiple benefits vendors in each country you hire from. 

For example, Gloroots EOR facilitates the distribution of pay and benefits tailored to individuals in different countries. 

2. Legal Variability in Benefits

Each country has different laws mandating various benefits like social security, pension, insurance, leave policies, etc. 

For example, maternity and paternity leave policies vary in different countries. Take Sweden, for instance. The country offers 240 days of maternal and paternal leave. However, in the USA there is no federal law that mandates employers to offer paternal leaves. 

Solution:

Partner with international legal advisory services to ensure compliance with the local benefits regulations. EOR service providers also have in-house teams of compliance experts who can handle legal and taxation issues for diverse locations globally. 

Gloroots offers an exclusive benefits management platform to streamline benefits administration and ensures compliance in 140+ countries. Gloroots removes legal complexities, saving you considerable costs in setting up an exclusive legal team for each location.

Remote Hiring Challenges: Payrolling 

Here are the top 3 payroll challenges that international companies should address to avoid legal consequences:

1. Multi-Currency Payroll Management

Managing salaries in multiple currencies is a logistical nightmare. Manual calculations and conversions are time-consuming and error-prone, which could lead to underpayments and delays, resulting in employee dissatisfaction. 

Payroll mismanagement causes significant burden to both the employees and the company. Additionally, exchange rate fluctuations can hugely impact your costs if not managed properly.

Solutions:

Use a robust payroll system that facilitates multi-currency transactions and automatic conversions. This eliminates the errors of manual calculations and ensures that employees receive the right salaries at the right time, regardless of their location. 

2. Regulatory Compliance Across Jurisdictions

Navigating different payroll standards and regulations, such as tax deductions, employer contributions, and reporting deadlines, across multiple countries and states is a significant challenge for international companies. For instance, employment and payroll regulations in the US vary significantly between the 52 states, as well as between cities.
Regular amendments and updates to these laws further complicate compliance efforts. Failure to comply with these laws can result in hefty fines, legal backlashes, and financial obligations.

For example, if you are hiring from Brazil, Brazilian law mandates that every employer should contribute a specific percentage of the employees’ salary to the Social Security (INSS) and the Government Compensation Fund (FGTS). If you are unaware of this law and fail to contribute, the Brazilian Government will impose significant fines on your organization.

The intense regulatory environment was the primary reason for firms (42%) to outsource their payroll processes, according to the 2021 Global Payroll Complexity Index. Keeping up with the ever-changing legal landscape across different countries requires huge time, effort, and resources. 

Solution:

Implement a payroll system that integrates real-time updates to changing laws and tax obligations. Have a team of international compliance experts that stay up-to-date on international regulations. Alternatively, you can also partner with experts from the respective countries to ensure that your payroll management is compliant.

3. Payment Timeliness and Accuracy

Timely and accurate payments are key factors in maintaining employee trust and employee morale. In US states like Arizona, companies must have a minimum of 2 paydays per month. In Connecticut, companies need to pay every week unless approved for a lesser frequency of paydays by the labor commissioner. 

Delays and failure to adhere to this frequency will not only frustrate employees but also attract hefty fines.

However, if you continue to manage payroll manually using spreadsheets, paying a globally distributed team can be challenging.

Solution:

Companies can leverage the power of blockchain technology to provide secure, transparent, and timely payments to employees around the world. Blockchain offers an immutable record of transactions, eliminating the chances of errors and delays. This fosters trust and loyalty among the employees.

Remote Hiring Challenges: Compliance

As companies expand their workforce globally, they are faced with a myriad of international laws and regulations. They must navigate these complex and diverse regulations to avoid legal repercussions. Here are the top 4 compliance challenges faced by global companies in remote hiring.

1. Understanding Diverse Employment Laws

Labor laws, including minimum wages, working hours, termination procedures, etc., can vary significantly from one country to another. These laws are also subject to frequent changes and updates. 

For instance, countries like the Philippines, Brazil, Mexico, and Argentina have laws for 13th month pay. The 13th-month pay is a form of additional salary payment that some countries mandate employers to give to their employees, typically as an end-of-year bonus. This payment is equivalent to one month's salary and is generally intended to help with holiday season expenses or as a financial boost at the end of the year. The specific rules and timing for this payment can vary by country. In some places, it's paid in December, while others might distribute it in two installments across the year. 

Companies should be aware of such unique laws governing each country to remain compliant.

Solution:

Companies should use cutting-edge compliance platforms specifically designed for global operations. This platform should stay updated with the latest legal changes in every region you operate. This can keep you informed and compliant. 

2. Data Protection Regulations

According to an IBM security report, the global average cost of data breaches escalated to $4.45 million in 2023, a 15% increase over the previous 3 years. Security breaches could compromise employee data safety, like social security numbers and other personal information. 

Data privacy regulations such as the EU’s General Data Protection Regulations (GDPR) impose strict guidelines on how companies can collect, store, and use employee data. Each region has similar data protection laws, with its nuances. Non-compliance can lead to fines and reputational damage. 

Solution:

Implement strict data protection measures that meet international standards. This includes data encryption, access controls, and employee training on best practices. You should also conduct regular audits to identify and address any potential threats in your global operations.

3. Contract Standardization and Adaptations

An international employment contract is a legally binding agreement between the employer and the employee. It contains details such as roles and responsibilities of the job, statutory benefits, notice period, termination conditions, and other work-related agreements.

In most countries, a written employment contract is mandatory. A standard contract will not meet the diverse legal requirements in the global landscape. Companies should develop contracts that comply with local legal requirements while maintaining their core values and policies. 

Solution:

Engage with a local expert to draft standard contracts meeting the local requirements, without compromising the global standards. Conduct regular contract reviews to ensure they remain compliant with the changing laws.

4. Correct Employee Vs. Contractor Classification

Misclassifying employees as contractors and vice versa is a crucial issue concerning global hiring. Such misclassifications might lead to huge fines and back taxes. Factors like control over work schedules, tools provided, and the nature of work contribute to determining the correct employee classification. 

For example, businesses are not required to withhold taxes or make social security and insurance contributions to individual contractors. However, this is not the case for an employee. Similarly, companies can expand or contract their contractual employees based on their workforce requirements.

Solution:

Leverage automated classification tools that evaluate based on local classification criteria to determine the correct employment status. This helps in avoiding costly misclassification errors and ensures that you adhere to all labor laws. Regular checks have to be done to ensure that classifications remain accurate over time.

The Gloroots Worker Miscalculation Calculator can be used to correctly classify employees and contractors and minimize business risks.

Navigate Global Remote Hiring with Gloroots

Enjoy the benefits of hiring remote talent without any complexities using Gloroots’ EOR. 

Our cutting-edge platform and expert team can help ease faster onboarding, global payroll and benefits administration, and 100% global compliance in 140+ countries. 

Contact Gloroots for compliant global workforce management.