SMB Hiring Guide: How to Build a Global Team the Smart Way

Maybe you’re exploring a development hub in Macedonia, or hiring professional services talent in the Philippines or South Africa. For European SMBs, global hiring is a genuine opportunity to find specialist skills and test new markets.

But here’s the reality: 75% of employers across 21 European countries are struggling to find candidates with the right skills (Euronews). And for stretched people teams already juggling endless priorities, adding compliance, payroll, and onboarding across borders can feel like one weight too many.

If you’re wearing multiple hats and wondering how to make this work, let’s walk through what actually matters.

Choosing the right framework for hiring internationally

The right framework depends on your timeline, budget, and commitment level to a market. For most European SMBs testing new regions or needing to move quickly, an Employer of Record (EOR) offers the fastest path with the least risk—while establishing a local entity makes sense only when you’re certain a market is a long-term play.

Here are the three common pathways you’ll likely consider:

1. Establishing a local entity
2. Partnering with recruitment agencies
3. Collaborating with an Employer of Record (EOR)

Each approach comes with its own benefits and challenges, and the right choice often depends on your long-term goals, budget, and operational needs.

1. Establishing a local entity

Setting up a legal entity gives you full control over local operations—making it logical if you’re certain about a market. But this route is rarely simple, and the hidden weight can catch stretched teams off guard.

• Compliance complexity: You’ll navigate tax laws, employment obligations, and regulations that shift from country to country.
• Financial commitment: Costs range from thousands to hundreds of thousands of euros depending on the region.
• Timeline pressure: The process often takes several months—sometimes over a year—which can mean missed opportunities when you need to move fast.

For SMBs testing a new market or needing to hire quickly, this delay can result in missed opportunities.

Tip: Before setting up an entity, ask yourself: is this market a long-term focus for your business, or are you testing its potential? If the latter, consider a more flexible solution.

2. Partnering with recruitment agencies

Recruitment agencies can be a valuable resource for sourcing talent and understanding local hiring practices. Their expertise in identifying and attracting candidates can save your HR team time and effort.

However, their scope is often limited to recruitment. Employment contracts, compliance, payroll, and benefits typically remain your responsibility, adding to the workload of already stretched HR teams. For businesses seeking end-to-end solutions, this approach may fall short.

Tip: Recruitment agencies are a good fit if you have in-house HR capacity to manage contracts and compliance. If not, consider a partner that provides full employment support.

3. Collaborating with an Employer of Record (EOR)

An Employer of Record (EOR) simplifies international hiring by taking on the legal and administrative weight so you don't have to carry it.

• End-to-end employment support: The EOR handles contracts, compliance, payroll, and benefits.
• Flexibility in sourcing: You can find talent yourself or tap into vetted recruitment partners in your target markets.
• Speed to hire: You can onboard within weeks rather than waiting months for an entity to be established.

This approach is particularly useful for businesses looking to test a market or hire in multiple regions without committing to setting up legal entities or navigating the complexities of local compliance on their own.

"City Relay expanded their global workforce by 80% with Teamed and can now onboard global hires even within 24 hours —all without requiring additional in-house HR or compliance expertise."CityRelay

Tip: Use an EOR to scale quickly and test markets without the financial and legal commitment of a local entity. This is ideal for fast-growing businesses.

Considerations for market testing

For many SMBs, the decision to expand into a new market is a test of viability. Setting up a local entity might seem like the ultimate solution, but it’s not always the best move if the market doesn’t deliver the results you expect.

In such cases, partnering with an EOR offers a flexible and faster solution that allows you to dip your toes into a market without the long-term financial and operational commitment of establishing a legal entity.

"Teamed has definitely helped us transform our hiring process. It allows us to cast the net so much further and target talent we know will be beneficial to our business, regardless of where they're based!"Luganodes

Expert insight

"Launching your own entity can be a complex process with numerous pitfalls," says Tom Hird, Co-founder of Teamed. "Costs range from thousands to hundreds of thousands of euros, and timelines can stretch from several months to over a year. For stretched teams testing new markets, alternatives like EORs often provide a smarter path—without adding more pressure to your people."

The actual cost of global hiring

Hiring international talent isn't just about finding the right skills. It's about managing the hidden complexities that come with compliance, administration, and employee experience. For already stretched HR and finance teams, these challenges can lead to costly mistakes, inefficiencies, and disengaged employees.

"Thanks to Teamed's rapid response times and in-depth knowledge, we've been able to streamline our onboarding processes and eliminate a lot of the red tape we'd have previously struggled with. Now, we get to enjoy the advantages of a talented global workforce, without the administrative burden!"CT:

Compliance challenges are costly mistakes

Each country has its own labour laws, tax codes, and employment regulations. Missteps, such as misclassifying employees as independent contractors, can lead to significant financial penalties and damage your company's reputation.

For example:

• In Germany, businesses found guilty of misclassification face fines worth of thousands of Euros to cover backdated taxes, and legal disputes.
• In Italy, non-compliance with labour regulations can result in fines of up to tens of thousands per violation.

Partnering with an Employer of Record (EOR) ensures compliance with local laws from day one, reducing risks and protecting your business.

Tip: Before expanding, review the classification laws in your target market. A partner like an EOR can help you stay compliant and avoid costly errors.

Administrative overload when your team is stretched too thin

Managing multiple payrolls, tax filings, and employment contracts across borders requires significant time and expertise. For HR and finance teams already juggling multiple priorities, this workload can lead to burnout, inefficiencies, and costly errors. According to a survey by EY, 55% of HR professionals in global organisations feel burdened by the complexities of international hiring.

The weight of administrative overload shows up in familiar ways:

• Unfamiliar tax terrain: Handling reporting standards you’ve never encountered leads to delays and fines.
• Payroll corrections: Fixing errors can cost thousands in penalties—and hours your team doesn't have.
• Contract complexity: Navigating local employment law leaves little bandwidth for the strategic work that actually moves your business forward.

Tip: Streamline administrative tasks by working with an EOR. They handle compliance and payroll, reducing pressure on your internal teams.

Employee experience, the link to engagement and performance

Mistakes in payroll or benefits don't just create financial risks—they directly affect your employees. A missed salary payment or incorrect tax deduction can disrupt lives, leading to disengagement, dissatisfaction, and turnover.

When payroll runs smoothly and benefits arrive as promised, employees feel seen. That sense of being valued isn't soft—it shows up in the numbers:

• Higher performance: Highly engaged teams see 21% higher profitability and 17% higher productivity (Gallup).
• Lower turnover risk: Disengaged employees are 37% more likely to be absent—and far more likely to leave (Gallup).

An EOR helps ensure a seamless employee experience by managing compliance and payroll accurately. When employees feel valued and supported, they're more likely to stay engaged, perform better, and contribute to your organisation's success.

Tip: Prioritise employee experience with accurate, on-time payroll and benefits. Engaged employees are more productive and less likely to leave.

Expert insight

"One of the biggest hidden costs of global hiring is the impact on your team's bandwidth and focus," says Tom Hird, Co-founder of Teamed. "Managing compliance, payroll, and employee experience across multiple countries isn't just a drain on time — it can lead to an overwhelmed team, and costly, yet avoidable, mistakes. Partnering with an EOR simplifies the process and reduces these risks significantly."

Conclusion

Global hiring opens real doors for European SMBs—but it comes with weight that stretched teams shouldn't have to carry alone. The path forward isn't about doing more; it's about partnering with the right support so you can grow without burning out the people making it happen.

Ready to work with a partner that feels like an extension of your team? Let's help you simplify global hiring and support your growth.

Speak to us today to learn more. Let's chat!

Frequently asked questions

What is an SMB job?

An SMB job refers to employment within a small or medium-sized business, typically companies with fewer than 500 employees. These roles often require wearing multiple hats and juggling priorities across departments like HR, finance, and operations.

What's the best way to hire internationally?

The right framework depends on your timeline and market commitment—an Employer of Record (EOR) offers the fastest path for testing new regions, while establishing a local entity makes sense only when you're certain a market is a long-term play.

What are the hidden costs of global hiring?

Beyond salaries, global hiring carries compliance risks (fines for misclassification can reach tens of thousands of euros), administrative overload that burns out stretched teams, and employee experience issues that drive turnover when payroll or benefits go wrong.

How long does it take to set up a legal entity abroad?

Establishing a legal entity typically takes several months to over a year, depending on the country. Costs range from thousands to hundreds of thousands of euros, which is why many SMBs test markets first using an EOR before committing to a full entity setup.

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