Do you want to get the best talent while having significant payroll cost savings? Then you need to learn about the different remote hiring models that can serve your business needs.
Hiring a remote workforce is one of the best ways to acquire the best talent while keeping payroll costs low, no matter the size of your business or industry.
Whereas traditional hiring seeks candidates from within a defined geographical boundary for work in a company’s location, remote hiring does not have geographical boundaries. It enables staff to work outside of a traditional office environment.
Since remote recruiters do not have geographical boundaries when looking for candidates, they can increase their talent pool. This lets them access emerging markets where talents are plentiful and relatively cheap.
There are different types of remote arrangements. If you’re planning to hire remote employees, it’s essential to know the different remote work models.
There are five main remote hiring models as follows:
At the end of this article, you’ll know what remote arrangement is best for you and your business.
1. Freelance Model
A freelancer is an independent contractor who offers their services to a company, earning money on a per-job or per-task basis.
Freelancers are not company employees. They are generally available to complete jobs for other companies while still working on your projects. You can also contractually commit a freelancer to work exclusively on a specific scope of work until it is completed.
Using the Freelance workforce model of remote hiring means hiring one or more freelancers to do specific jobs for you. While you can easily get the talent you want and hire quickly, you’ll need to control the quality of work delivered.
Advantages of the freelance remote work model
- Easy to find top talent
- Shorter time-to-hire
- Flexible hiring across geographical locations
- Cost-effective compensation for lower budgets
Quick hiring
One of the most significant advantages of using the Freelance workforce model is that it sees recruitment faster than other hiring methods.
Hiring a full-time employee for a highly skilled position can take six months or more, whereas hiring a top freelancer can be possible in a few days.
As an on-demand workforce, opting for freelancers is a flexible hiring option for companies looking for specific deliverables. This means that you can access freelancers whenever you need them, and after delivering the job, they are off the payroll.
Easy to find
Another advantage of the Freelance model is that it makes finding top talents easy.
These days, many top performers are going into freelancing. This is because of the appeal of self-employment and flexible work arrangements allowing good work-life balance. Thus, millions of highly-skilled people in different specializations are in the freelance market, and you can easily find them using freelance marketplace websites like Upwork and Guru.
Many employers get access to freelancers via network referrals. You’ll also find freelancers building their personal brands and advertising themselves on social media.
Cost-effective compensation
The most cited advantage of the Freelance model is that it is relatively cheap. Using freelancers is generally more affordable than using an office team. In fact, working at the office may cost twice as much as working remotely.
Freelancers generally use two pricing models—fixed or time-based. In the fixed model, the freelancer quotes you a set price for their service, irrespective of how long the job takes. In the time-based model, the freelancer charges you by the hour.
However, irrespective of the pricing model, you can get highly-skilled freelancers from foreign countries who charge just a fraction of the regular rates in the US.
Moreover, freelancers are generally cheaper because you won’t cover most of the expenses you would with traditional onsite workers. These include office equipment, employee perks and benefits, training and upskilling, employee taxes, social contribution, and more.
Disadvantages of the freelance model
- Freelancers can be unreliable
- Resource control issue
- Freelancers may pose security risks
Unreliable
Using the Freelance model is not a silver bullet because freelancers can be unreliable in meeting deadlines and delivering quality work.
Freelancers take on many jobs, often juggling multiple deadlines to meet. They sometimes err when calculating the scope of a task and the time they’ll invest in it. This results in missed deadlines or shoddy rush jobs that lack care.
A freelancer could also leave you or stop responding to requests without an explanation. This would make you scramble at the last minute to find another person to complete your job.
Resource control issue
When using freelancers, it’s essential to know that supervising them is near impossible, requiring high trust and constant communication. One reason for this is that they are independent contractors that do not have fixed working hours.
Thus, manually controlling the quality of work may add further oversight and challenges.
Security risks
Security is another issue to consider when using the freelance model. Freelancers may need access to company systems, process documents, and data repositories.
As a result, they may be privy to sensitive information. To protect themselves, businesses must set security guidelines to ensure the safety of systems and data.
2. Global Team Model (Global Delivery Model)
The Global Team Model (also known as Global Delivery Model) means using a globally dispersed workforce of employees to execute your business.
Advantages of the global team model
- The GTM gives you a global knowledge pool
- Opportunity to build adverse company culture
- Helps maximize productivity as your team works round the clock
Full-time employees based all around the world
The Global Team Model (GTM) is a team that consists of full-time company employees. While the team works on a single business, most members are located in different countries and will work remotely from those countries.
One of the most significant advantages of the GTM is being able to draw talents from across the globe. The bigger the circle you can source talent from, the more likely you will find the top international workforce. Using the GTM and increasing your talent pool to the world ensures you get top remote talent.
Forming a team of top performers from different parts of the world gives you a diverse company culture. With a global team, your company will have a wide range of experiences that it can draw from to create better solutions.
A global team can also increase your overall team performance and productivity as the business operates around the clock. Being in different locations across the world puts your international team across time zones, meaning projects can be completed faster. This is particularly advantageous for businesses that work with clients and partners all over the world.
The global team model is most prevalent in IT industries
The Global Team model is popular amongst tech companies in the IT industry. It’s extremely common to hire software development teams.
Team members with different skill sets worldwide can tag-team on various phases of a single project.
For example, a team member finishes a task and submits the work to a coordinator or supervisor, who then assigns the work to another team member for the next development phase.
Companies also commonly use the Global Team model to provide 24/7 customer support. For example, nighttime in the US is working hours on the other side of the world, so troubleshooting customer requests don’t need to be delayed. This way, round-the-clock customer service can be provided to your client base without anybody having to work night shifts.
Disadvantages of the global team model
- Requires significant investment in collaboration and remote technology
- Default to asynchronous working
The global team model needs significant investment
This model defaults to asynchronous work arrangements due to the time difference between the countries/continents in which the team members are located.
For team members across the globe to work toward a single goal, you must carefully select and invest in the appropriate technology to enable effective collaboration. A comprehensive tech stack for successful teamwork includes video conferencing tools and project management software (like Slack and Monday.com).
Default to asynchronous working
Having the majority of employees across the world leads to asynchronous teams. Many members of the global team will be in different time zones and have working hours that need to be aligned.
The difference in working times may delay communication and make coordinating meetings challenging with a limited schedule.
3. Virtual Team Model
The Virtual Team remote working model means using a team of multiple full-time freelancers to execute your business.
Advantages of the virtual team model
- Freelance workers are relatively cheap, easy to find, and quick to hire
- Can be sourced across the world, meaning access to the best remote talent and a diverse company culture
Team of multiple full-time freelancers
Virtual Team members are global contractors who work for you full-time. Drawn from a pool of freelance workers, they can be located anywhere in the world but are not company employees. Together, they make up your virtual department or company.
Since the team members in a Virtual Team model are all freelance workers, the model gives you many of the advantages of the freelance model. For example, finding the needed talent is relatively easy and fast. The freelancers come relatively cheap, as you do not cover employee benefits, taxes, office equipment, etc.
Coordinated chain of expertise
In the Virtual Team model, each hire would have specific strengths. You coordinate the chain of expertise such that when a team member completes their task, they pass the deliverable to the next person to work on the next phase.
For example, a designer designs an interface and passes it to the developer. The developer writes the code for the software and passes it to QA. The QA person tests the software, fixes any bugs, then passes the finalized software product to you or a marketing team to share with prospects.
Disadvantages of the virtual team model
- Requires a higher level of management
- Many of the issues with using freelancers
Requires a higher level of management
Managing any on-site team is difficult enough. Having an entire team made up of freelancers from different parts of the world makes managing them even more demanding.
For the Virtual Team model to work, an additional layer of management is needed to coordinate the chain of expertise so that work flows seamlessly from one team member to the other.
Issues with managing freelancers
Though the individual members of a Virtual Team model are with you full-time, they remain freelancers.
Thus, they are difficult to supervise, they may have multiple jobs that affect the delivery of your work, and you should be wary of them getting sensitive information.
4. Dedicated Team Model (Remote Outsourcing Team)
The Dedicated Team Model (also known as Remote Outsourcing Team) involves getting remote workers from a third-party company to work on your project full-time.
Advantages of the dedicated team model
- Exclusive and focused dedication to the project at hand
- More productive and offers easier management
- Budget-friendly resource
Hire specialized remote teams
Using the Dedicated Team Model means hiring a remote team via an outsourcing company.
You meet an outsourcing company and outline your project requirements. Based on those requirements, the company puts together a remote team with the right skills. The team then works on your project exclusively under your company’s supervision.
Since a dedicated team works exclusively on a project through to completion, tasks are usually completed promptly. Unlike freelancers with side gigs or in-house team members who may have other responsibilities within the company, this model generally creates more productive results and offers guaranteed quality control.
The DTM is not for remote-first companies because it entails having an in-house team. The remote work model is commonly used when an in-house team needs to gain the key skills to execute a particular project.
The dedicated team model offers easy management
Using the Dedicated Team model makes life easy as there is less burden on backend HR operations such as recruiting, hiring, and onboarding the team.
Payroll management is also easy. You’ll not be burdened with complicated computations. You will not process payment for each of the dedicated remote team members. Instead, you pay one sum to the outsourcing company, which covers their commission and each team member’s remuneration.
The Dedicated Team model is relatively budget-friendly as you offer one sum to the outsourcing company to cover all compensation, including commission and bonuses.
Because the dedicated team is remote, members can be sourced from countries where the required service is cheaper compared to the US. Also, you dodge most of the costs associated with expanding your in-house staff (including equipment, training, benefits, and taxes).
Most popular for large-scale projects
The Dedicated Team Model is most suitable for long-term, large-scale projects requiring deep expertise and complex project management.
Small projects with clearly defined and unchanging requirements won’t need a specialized team (except if there was a problem with the initial team formation).
Disadvantages of the dedicated team model
- Unsuitable for short-term projects
- Communication delays due to different time zones
5. Nearshore Outsourcing
The Nearshore Outsourcing remote model means using a remote team in a neighboring country to execute your business.
It is the middle ground between onshore outsourcing (contracting services to someone outside the organization but within the country) and offshore outsourcing (contracting services to someone outside the organization but in a faraway country).
It’s important to distinguish that nearshore outsourcing is hiring remote team members or hybrid teams from a neighboring country, not necessarily from your “nearest neighbors.”
As a US company, countries for nearshore outsourcing are not just Canada and Mexico. US companies will get the best of nearshore outsourcing by hiring from over two dozen Latin American countries (Cuba, Jamaica, The Bahamas, Granada, Brazil, Argentina, etc.).
By sourcing your team close to home, you avoid issues associated with sourcing right at home or too far from home.
There are many roles that US companies can easily outsource to nearshore locations, including Executive Assistant, Digital Marketer, and Business Development Manager. You may also outsource Sales Development Representative roles to supplement an existing sales team.
Near is a service that uses the Nearshore outsourcing model, providing a 360 degrees solution for US companies that want to hire Latin American (LatAm) talent.
Near makes hiring the best LatAm remote workers simple. All you need to do is fill out a short form, and they will write your job description. From its comprehensive database of pre-vetted LatAm talents, you’ll be matched with candidates who match your requirements. You can then interview these talents free of charge.
Advantages of nearshore outsourcing for hiring remote workers
- Gets you a team in a similar time zone
- Technical expertise for a lower price
- Little or no cultural barrier
Work in similar time zones
When you source talents far from home, the timezone difference is often significant, leading and communication delays.
However, with nearshore outsourcing, you source your remote team from a neighboring region, ensuring that you and your team are in the same or similar time zone. This helps you avoid communication delays associated with the asynchronous teams of offshore outsourcing.
Nearshore outsourcing also makes it easy for remote workers to visit your company location for in-person sessions. You’ll also spend less time and money to ship supplies to remote workers.
Quick and convenient hiring
With Near, sourcing LatAm talents is straightforward, as it is a seamless one-stop-shop process. By hiring from one nation, you’ll have fewer employment laws to worry about as opposed to having multiple contractors worldwide.
On top of this, Near offers zero-risk hiring, meaning that you don’t pay anything if you choose not to make a hire. You only pay when you’ve found someone you want to hire and move forward with.
More value for money
Nearshore outsourcing seeks to provide the benefits of remote work onshore outsourcing without its relatively high costs. Thus, nearshore recruitment offers cost savings and gives more value for money. In fact, hiring LatAm talent via Near can help you save as much as $500k per year.
The market expectations between the two countries regularly make sourcing remote workers from neighboring countries cheaper.
For example, standard salary rates in Latin America are 30 - 70% lower, with role expertise on par with North America. While the average base salary in the U.S. is USD59,428 per year, in Jamaica, the average base salary is JMD1,157,300 per year (approximately USD7439).
Improved retention
Another prominent advantage of nearshore outsourcing is an improved employee retention rate.
When your remote team is closer to home, they are more likely to assimilate and thrive in your company operations and culture.
Recruiting LatAm talents with Near improves retention as remote workers are more likely to feel part of the core team. Near provides competitive salary ranges for roles, which helps remote workers feel properly compensated and more committed.
Also, Near does not charge remote candidates anything— as such, the workers will not feel shortchanged in any way.
Disadvantages of the nearshore outsourcing model
- Neighboring countries may use different languages
- Recruiting from neighboring countries limits your talent pool
Final Thoughts
The plethora of remote hiring model options out there provide solutions to getting the best talent while saving big on payroll costs. The suitable remote hiring model ultimately depends on your business's stage and unique needs.
While the different remote work models have advantages and disadvantages, nearshore outsourcing is helping American companies create better business outcomes. More and more companies are leaning on nearshore outsourcing as it offers quick and convenient hiring, synchronous team, and more value for money.
If you are a US company looking to hire the best remote workforce at a fraction of the cost, Near was founded with your needs in mind.
At Near we help US companies hire pre-vetted, English-speaking highly-skilled remote workers from Latin America. We can help you get the best employees for your business with lower salaries (30 - 70% less than it’ll cost you to hire locally).
Get the best LatAm talent for your US business! Fill out this form to get a list of excellent pre-vetted LatAm talent and start interviewing for free.
