The internet has been a driving force behind globalization and many of its benefits, including the ability to hire talent from everywhere, especially for services and work that does not require the on-site presence of the contractor. This covers a wide range of tech jobs, and soon, it will also facilitate many jobs that currently rely on the on-site presence of global contractors. This means that hiring global contractors, which is already a common practice for many organizations, will only grow in the future. If you are planning on hiring global contractors for your business, follow this checklist to ensure your arrangement with them is productive and compliant.
Global Contractor Checklist
Scope of Work
First, you must define the scope of work for which you are planning to hire a global contractor. In many cases, breaking a job down into manageable pieces can help you get a clearer picture of the skill sets and professionals you may need.
This may give you an idea of whether you would need a global contractor or your existing workforce or whether a pool of local contractors you have access to will be able to handle it. This can also limit your reliance on global contractors, as you may be able to handle several aspects of the job in-house or locally.
Local vs. Global Contractors
There are several reasons why choosing a global contractor might be significantly better than relying on local talent. This includes cost and specialized skill sets. You may be able to find an international contractor with the same skills as many local contractors, albeit at one-third the price, offering the same quality of work.
However, in some cases, you may have to pay a premium price to gain access to the most talented global contractors for skills that might be rare or unavailable in your local workforce/talent pool.
Before looking into the global talent pool, it is always better to ensure you are not overlooking better quality and pricing in the local contractors.
Global Contractor Requirement
Outline your contractor requirements. If you want them to work with your local teams, which would require them to meet the time zone and, ideally, be an excellent cultural fit, you should communicate this upfront. Many local contractors prefer to work on their terms and may focus more on project completion than following your work arrangements.
The more flexible and transparent you are with your contractor requirements, the better your chances of developing a productive relationship with your global contractor.
Budget
It’s important to research the cost of projects like yours or the cost of hiring global contractors for the skills you are looking for before you prepare your budget. You may find a significant spread in price. Global contractors from India and China may cost far less than contractors from EU countries and the US.
However, you also have to consider the quality of work, workplace and cultural norms, and project timeline. An inexpensive global contractor that offers a mediocre quality of work and also takes more time than necessary might cost you more in the long run than an expensive but highly competent global contractor.
Global Contractor Search
There are several ways to find and connect with global contractors. Some marketplaces like Upwork would require you to pay a percentage of each job completed by the professionals hired from the platform.
Other marketplaces would charge an upfront fee but may also offer services like pre-evaluating the contractors for the skills they claim they have. You can also search for contractors through their websites and online profiles, though it may take much time to sort through all the available options.
Vetting/Evaluation
Evaluating a global contractor for the skills they claim and the quality of work they promise can be tricky and may vary significantly from one job to another. However, third-party vetting services and a wide array of online testing services can significantly lower this burden. It’s important to understand that evaluating a global contractor differs from evaluating an employee.
The contractor may have a significant degree of freedom, and they don’t have to be a cultural fit to be of utility to your business. Restrictive evaluation criteria might prevent you from accessing the broadest talent pool of global contractors.
Worker Classification
You may have specific employee and contractor classification requirements based on the country in which your business is established. This may be more relevant to local contractors, but reviewing these classification requirements is still advisable.
Misclassifying your global contractors or keeping them on the payroll for a relatively long period may carry specific penalties.
Taxation
Most global contractors will be liable to pay their taxes, and you might not be required to deduct tax from their payments. However, international contractors offering their services as individuals and legal entities (like LLCs) may have different tax implications.
You will pay a foreign “business” for services, which might come with specific tax obligations.
Payment Processing
You can pay a global contractor in several different ways, all with certain benefits and risks. When you hire and pay international contractors through a third-party marketplace, you may be bound by their payment processes, which typically require paying full or partial cost upfront (usually in an escrow). If you pay them directly, online payment services and direct bank transfers may be the best course of action, though they may come with their fees.
Establishing Communication Channels
Hiring a global contractor is only the beginning of what might become a successful or unsuccessful professional relationship. Proper communication channels and practices are crucial to your success with a global contractor.
Conclusion
Hiring and adequately managing global contractors can be a significant asset for any business. It gives you more control over your options and costs and may offer you access to skills beyond your financial resources if you adhere to the local market.
However, remaining compliant throughout the process is essential, lest your assets become liabilities.
In conclusion, when it comes to engaging independent contractors, there’s no better solution than Engage Anywhere. Our comprehensive services provide the flexibility and peace of mind needed to navigate the unique challenges that arise when working with independent talent. From streamlined onboarding and contract management to compliance support and payment processing, Engage Anywhere ensures a seamless and efficient experience every step of the way. Engage Anywhere is the ultimate solution for success. Join us today and unlock the power of engaging with independent contractors, anywhere, anytime.
