Benefits of EOR for International HR Management
With Vietnam’s strong international integration in recent years, the increase in the number of international employees by businesses is not a new thing. With international employees, businesses need to have the most appropriate policies and strategies to improve efficiency in management. Below is information EOR to help managers better understand international human resource management.
1. What is international human resource management?
International human resources are people or groups of people who are not Vietnamese working at companies and corporations in Vietnam. International human resource management is part of general human resource management (in addition to domestic human resource management).
Managing this group of employees will be more complicated than with domestic employees and includes 2 main aspects as follows:
- Strategic planning: Businesses need to have a strategy for allocating resources in the short term and in the future. It includes recruiting, evaluating, training, developing human relationships in the working environment.
‘Using human resources: Managers must identify the role of international personnel, grasp their abilities, strengths, and weaknesses to assign the most appropriate work.
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2. International human resource management process
Like domestic human resource management, when managing human resources abroad, EOR ensures the important steps of human resource management. Accordingly, issues of paperwork, employee training and development, salary and bonus management, and contract termination procedures are extremely important.
2.1 Managing international human resource paperwork
For foreign employees coming to Vietnam, paperwork is very necessary, and businesses also pay much attention to this issue. Complete paperwork will increase the ability of workers to be licensed, and at the same time support the declaration of personal income tax and the issuance of residence cards for employees.
When foreign employees come to work, EOR will ask them to provide the following documents:
- Personal documents.
- Job invitation letter.
- Labor contract.
- Profile of capacity and experience.
- House rental contract.
- Documents on visas, passports, etc.
2.2 Work permit
Foreigners who do not have a work permit in Vietnam will be deported according to State regulations. In addition, employers of foreign workers without a permit will also be punished according to regulations.
In addition, a work permit is also an important document that helps employees apply for a temporary residence card, helping employees feel secure in their work without having to worry too much about temporary residence. EOR can support employees in making these documents by opening bank cards, credit cards, etc.
What is International Human Resource Management?
>>>Read more: Connecting Businesses with High-Quality Human Resources: S4B’s hr consulting services
2.3 Salary and tax calculation
Foreign employees will have a different salary calculation method than domestic employees. Salary will depend on factors such as:
- Nationality.
- Experience.
- Professional qualifications.
- Working position.
- Benefits and allowances.
- Unit of currency used to calculate salary.
Regarding personal income tax, the tax authority will calculate tax based on passports, employment contracts, house rental contracts, deduction documents, etc. For foreign employees, the tax will include 2 cases:
- Resident individuals: Apply the progressive method.
- Non-resident individuals: Personal income tax = Taxable income x 20%.
2.4 Insurance for employees
International employees working in Vietnam are required to participate in social insurance if:
- Have a work permit, certificates, and practice licenses issued by competent authorities in Vietnam.
- Have an indefinite-term labor contract.
- For a fixed-term contract, it must be at least 1 year.
From January 2022, enterprises employing foreign employees will pay insurance for employees as follows:
- 3% to the sickness and maternity fund.
- 0.5% to the occupational accident and disease insurance fund.
- 14% to pension and death fund.
3. Comparing international human resource management and domestic human resource management
Unlike domestic human resource management, international human resource management has many problems, mainly due to differences in language, culture, and politics of each country. The main differences include:
3.1 Culture, language:
There are differences in the way of speaking and culture between countries, so managers need to understand and have the right management mindset to avoid offending employees.
3.2 Legal issues: EOR understand domestic labor laws and international labor relations laws
- Recruitment, human resource working process:
- Many problems occur in the management process such as:
- Procedures for employees to come to work or when employees want to return to their hometown to work.
- Are working conditions suitable for employees or not?
- Costs for language training, cultural transmission, etc.
- Income and allowances for foreign employees will be higher.
3.3 In terms of perspective and vision:
Managers must consider many different perspectives and make appropriate policies and decisions so that no employee feels “abandoned”. Policies must ensure that the potential of domestic and foreign employees is maximized.
International human resource management is not simple, requiring managers to have skills, experience, and ingenuity so that employees do not feel lost. Hopefully, through this article, you have a better understanding of this issue and have a plan to develop your team, EOR will help your business operate as smoothly and effectively as possible.
If you have any questions regarding Benefits of EOR for International HR Management, please contact us:
S4B Vietnam
- Address: Unit 701B-701C, Tower A, Handi Resco, 521 Kim Ma Street, Ba Dinh District, Hanoi, Vietnam
- Tel: + 84 24 3974 4181
- Email: service@s4b.com.vn
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