How to hire a software engineer abroad

Have you considered hiring a software engineer in a different country or using digital nomads?
 
The rise of  remote working has made it potentially easier than ever to overcome the talent drought by hiring software engineers and other high-tech employees from overseas or remotely by changing the mode of employment. But what happens if these people are fully remote or’ digital nomads’ - someone with no fixed abode who works remotely online for extended periods.    
 
The pandemic forced a remote working experiment where employees moved from a mainly office-based environment to many hours spent at home – this phenomenon has yet to drive companies and governments to rethink how to ease work across borders completely. But it can be achieved by opening alternative locations for highly-skilled individuals.
 
For many people and employers, working at a company based in one country and living in another remains complicated. But to succeed, you will need to understand where to find the best candidates (irrespective of their location), how to attract, assess them, and handle the legal and financial implications. 
  

1. Know the rules

 
There are many HR, payroll, tax, employee benefits and social security considerations which are just a few of the issues companies face when sending employees overseas or hiring from abroad. The regular rules may not always apply for digital nomads and remote employees.
 
This is often less of a problem for multinational companies, especially if the business has an existing office in the county. Businesses can second the employee and manage them through a local contract. Difficulties arise where companies do not have a permanent presence in that separate jurisdiction, opening them up to liabilities such as increased taxes and issues around labour laws and benefits. 

Overseas employees can create new tax obligations. According to EY, corporate tax and payroll risk — such as increased taxes on salary, were the two most frequently cited concerns among companies looking to hire abroad, at 39 per cent and 24 per cent, respectively. 
 
But what if your business is in one country and your employees are in another? Where and how to pay taxes can become difficult. In the past, hiring abroad meant establishing a local business entity, a costly and complicated process. Some solutions now exist, including - employer of record (EOR) or professional employer organisations (PEOs). They build out networks worldwide that absorb responsibility for international employees’ payroll, benefits and other compliance matters. But such solutions can be costly per month.

Visa requirements

When employees enter another country, they are required to obtain work visas sponsored by their employer. These systems were designed for employees immigrating to a country to obtain work if the person is a digital nomad. In most cases, these employees work for a business based in their home country while enjoying the freedom to travel. Although work is an activity they will perform, their purpose in the country is recreational—therefore commonly tied to a tourist visa.

Some countries allow employees to remain in their countries on tourist visas while simultaneously performing job duties for a foreign employer. For example, Antigua, Barbuda, Croatia, Iceland, etc., have created special Residence Programs that cater to these types of employees with special visa designation. But this is not common around the world,

During the pandemic, many governments temporarily relaxed rules to account for the near-total shutdown of international travel and the complex situations faced by stranded employees. However, this guidance is, as yet, often untested, and some employers have had to navigate “a very unclear environment for tax” as they sought to formalise remote work arrangements.

On the employee side, many countries already have bilateral agreements. These include double taxation treaties that prevent overseas employees from being taxed twice on the same income in different jurisdictions and social security totalisation agreements that allow employees to continue paying into their home system over the host country. But such treaties can create problems.

The United States, for example, has more than 50 double taxation treaties and only 30 social security totalisation agreements, meaning an employee could be liable for two lots of social security payments. While these hurdles partly reflect outdated laws, complexities also exist by design: by making it harder to work remotely abroad, governments avoid offshoring jobs. 

Taxes

When businesses begin conducting operations in another country, they become subject to permanent establishment laws. This means they are liable to pay corporate taxes in that country. Because of the permanent establishment risk, many organisations are wary of allowing employees to work in other countries.

But whether working remotely or at the office, if the activities of an employee remain strictly within the scope of conducting business in the home market, there is little risk that a single employee’s travel itinerary will force a company to have a corporate tax liability in another country.

One solution is to develop a Digital Nomad Policy. It should outline which employees’ activities are acceptable across borders—and which are not; this would include forbidden destinations because of the complexity of specific tax rules.

But global companies that have operations in the country of travel should consult local laws based on individual circumstances. The same goes for employees who intend to stay in-country beyond a traditional 90-day tourist visa.

2. Know where to look for new talent

Some of the top countries where you will find talented Software Engineers looking for remote work are India, Poland, Egypt, Ukraine, Mexico, Czech Republic, Philippines, Argentina, Romania and Vietnam. These countries have well-established universities, thriving high-tech communities, and potential talent to consider.

3. Know the qualities to look for and Interview carefully

 Whether your favourite candidate comes from the UK or another country, the interviewing process for remote work (employee) differs somewhat from a typical local role. Any video conferencing tool can facilitate the actual interview, but the critical question to address in the remote work situation is specifically about communication and self-management.

While specific qualifications may vary from country to country, the key skills, competencies, and qualities you need to look for in a good software engineer remain much the same:

• Ability to write and test quality code  
• Analytical thinking 
• Attention to detail 
• Communication skills – most likely excellent English
• Creative design solutions and optimisation  
• Problem-solving, error-finding, logical reasoning and troubleshooting skills 
• Professionalism 
• Systems testing, evaluation, and improvement skills
• Teamwork 
• Technical proficiency in programming languages, especially Python, JavaScript and C++. Organise an online test or project.
• Time and workload management skills 
• Do not forget to check out references more than a local employee.

4. Ask the right interview questions

When you cannot interview candidates face to face, it becomes even more important to ask the right questions to understand how they will fit into your company culture. Such as:

• Describe a project you completed successfully.
• How do you balance quality with speed when delivering a project?  
• How do you implement your error handling?  
• How do you keep your skills sharp and up to date?  
• How did you solve a problem you faced? 
• What is your proudest achievement as a software engineer?  
• What programming languages do you know (or prefer)? 
• What project management and collaboration software did your previous employers use? 
• What sets you apart from other applicants for this position?  

5. Offer the right benefits

According to Hired’s 2022 State of Software Engineers report, with the demand for software engineers higher than ever, you need to think beyond salary if you want to attract top overseas candidates. 

You may also want to go beyond typical benefits like health insurance, paid holiday and parental leave, flexible pay, bonuses and continuing education. Try out flexible approaches like Work in Any Way and offer flexible hours, mentorship, reskilling opportunities, or extra vacation time to attract the best candidates.

The question for most businesses considering the complete remote approach is:

• Are you going to use technology to track remote employees? Tools such as Slack and Microsoft Teams can report when you are active – but only if employers use them in that way.
• Can you overcome the cultural issues? Most people cannot.
• Will you increase the amount of documentation you write to communicate what is supposed to happen? 
• Is there talent? There have been well-documented start-up failures with cheap overseas outsourcing. 
• Finally - Sometimes there is no substitute for everyone being together or at least everyone having the possibility of being together and working together. Throwing around ideas is important.

Redline Group - the UK’s most trusted Electronics and High Technology recruitment specialist for professional Contract, Permanent and Executive positions. With four decades of experience in knowledge-led recruitment. Redline is perfectly positioned to offer advice about future-proofing your permanent, contract and interim needs. In addition, take a look at our software engineer jobs today.

For more information regarding how we can help, contact us on 01582 450054 or info@RedlineGroup.com.