As remote work goes through its fastest growth possibly in history, businesses are having to make some adjustments. Entire payment structures are redefined, and even salaries are put into question. As they transition, they'll have to face whole new processes in onboarding, hiring additional staff, and even paying overseas workers.
If your own agency is going through this and you plan to hire and work with staff remotely, you should develop a clear remote-pay policy. To accomplish that, you'll have to deal with understanding foreign transaction fees and international remittance. First, we'll explain the two terms, and then we'll talk about how having a remote workforce will affect how you pay your staff.
If you are looking for a way to share logins with an outside agency, using a password manager can mitigate the risk of unauthorized sharing and access. TeamPassword is an affordable password management solution for teams to share company credentials securely and efficiently. Sign up for a 14-day free trial today!
What is a foreign transaction fee?
A foreign transaction fee is an amount charged by a financial institution like a credit card company or bank to make a payment or purchase in a foreign country or currency. You may also find them under "purchase transaction fees" or "foreign currency transaction fees."
These types of fees apply both when you're abroad making purchases, withdrawals, and payments and when you send money to a foreign account.
What is an international remittance?
An international or foreign remittance is a money transfer from one bank to another in a different country. This type of transfer often occurs between family members in other locations. Still, it can also be between friends or from a company to an employee.
Remote work and international hiring
Though the post-pandemic remote work boom has increased how often companies hire international talent, this hasn't entirely facilitated how those employees are paid. Like local employees, remote workers expect to be paid on time and in the correct currency. So it's your HR team's job to make sure that happens with as few foreign transaction fees as possible on both sides.
How to pay remote employees
When your remote employees are in the same country as you, this is quite simple: a quick direct deposit will be quick and efficient. But when they're in another country, the options will change. Not only will payment methods be different, expectations for when to expect deposits might change too. In some countries, monthly payments are the norm, while in others biweekly payments are expected on specific pay dates. Finally, the currency in which they receive their payment should be established during the hiring process to avoid any issues.
Via direct transfer
With international employees, an international remittance can be more of a hassle than they're worth. Generally, they're slow and expensive, taking days to show up in the receiving account and always requiring a fee. However, there are times when it will be the best option available, and depending on your banking institution may even be the cheapest option. This will depend mostly on the two countries between which you're making the transaction.
For banks in Europe, you'll need to have your contact's full name, IBAN code, and IBC. For others, the bank will require things like their SWIFT code. Each type of transaction and country will have its own fees so make sure you consult with your bank before moving large sums around. The foreign transaction fees charged during direct transfer can leave both you and your remote staff feeling like the collaboration may not be worth the bother. This frustration can increase tensions and even lead to conflict, so before you start, establish expectations for who will cover those fees and how.
Using a payment platform
Of course, by now you're probably aware that there are many other options for paying your employees than just direct deposit or international remittance. You can also use payment platforms like PayPal, Wise, and Woldremit, and Western Union. Each of these platforms comes with its own benefits and issues which you'll have to weigh to decide whether they're right for you.
For instance, PayPal will charge a small fee of 5% just to transfer to another account, but a much larger one to convert currencies. Worldremit and Wise are great options with relatively small fees but aren't available in all countries and they take a long time to show up in the receiver's bank account. Finally, there's Western Union, but the fees and bureaucracy of going through them is frankly more trouble than it's worth, especially if you plan on doing it every month.
So, what about platforms that offer the whole package? We're talking about platforms like Freelancer and Upwork which help with the process of finding, hiring, and paying remote workers. While these platforms do an excellent job for short-term or one-time collaborations, for long-term payment and contracting, they're not the best option. For one, they're generally taking a cut on both sides, often of up to 20%. So, while this method will work for a while, you'll soon have to find an alternative for both parties' sake.
How to contract internationally
So what are your other options besides taking care of every step of hiring and managing staff on your own?
Hiring a payroll provider
Of course, there are companies that take care of precisely this type of problem. They're payroll providers that offer the service of paying your employees for you regardless of where they are in the world. You'll manage everything as if it were local, they'll take care of sending payroll out into the world. Whether it works efficiently and with as few costs, as they say, is up for debate, but some have plans of as little as $15 per month.
Hiring an international HR service
Instead of looking for how you can pay online, you can hire a service that works with you personally to hire employees internationally. They'll manage the entire process your local HR team would but with the added understanding of international hiring and tax law.
Managing your remote staff's access and security
While finding talent outside of your home country for your marketing agency is great, there are added risks when you bring anyone onto your team, especially remotely. To start, you're not entirely sure of the security of their connection and how likely they are to be the victim of a cyberattack, thus putting your data at risk. So, how can you onboard and manage your remote workforce safely?
Use TeamPassword for credential sharing
Using a tool like TeamPassword will allow you to sleep easy knowing all your credentials are safe whether your staff is working right in your hometown or on the other side of the world. Here are some of the features that make TeamPassword the best option to collaborate and share passwords with remote staff.
Available on any device and accessible anywhere
TeamPassword is available for iOS or Android devices and can be downloaded anywhere in the world. If your employees prefer to work directly from their browser, they'll be able to use the extension on Chrome, Safari, or Firefox, accessing all credentials quickly and easily.
2-Step verification and activity logs
Every time your team uses TeamPassword, they'll be asked to go through 2-Step verification. This allows the tool to know that not only is the device correct, but the user is right as well. This added step for security gives teams extra peace of mind. Additionally, regardless of the distance, you'll always know who has been using your logins, what time, and from where. This activity log is available on-demand as well as via email notifications.
Secure password generator
As your new team members sign up for tools that will help the whole team, they can use TeamPassword to generate secure passwords and share them with the rest of the team all in one go. This means regardless of who creates logins, they'll be both secure and available for everyone who needs them.
High-level security encryption
So, how does TeamPassword secure your credentials and keep attackers' hands off them? When you create or share logins, TeamPassword hashes, salts, and encrypts your information on your computer and then transmits it to the server using an encrypted connection. TeamPassword's is a secure hosting provider with the following international security accreditations:
- ISO 27001
- SOC 1 and SOC 2/SSAE 16/ISAE 3402 (Previously SAS 70 Type II)
- PCI Level 1
- FISMA Moderate
- Sarbanes-Oxley (SOX).
If you are looking for a way to share logins with your remote team, using a password manager can mitigate the risk of unauthorized sharing and access. Use TeamPassword as your password management solution and share company credentials securely and efficiently. Sign up for a 14-day free trial today!