How to hire remote employees for your startup

The world of work has changed. Ushered in by the start of the 2020 COVID-19 global pandemic, remote work has gone from a rare working arrangement to a common operating structure. In a 2020 survey conducted by Growmotely, 74% of professionals and 76% of entrepreneurs felt remote work would be the new normal. Since then, companies—both large and small—have embraced becoming distributed teams. Furthermore, some startups are establishing themselves as fully-remote teams from day one. As a result, businesses are now looking beyond their cities, states, and even countries to hire talent.

With this phenomenon comes the opportunity to attract global talent to your startup and build an innovative remote-first company culture. But it also comes with challenges like setting up legal hiring entities and coordinating a remote hiring process. For entrepreneurs and founding teams considering a remote structure for their startups, we’re providing advice on how to hire remote employees—with tips on everything from creating a remote-friendly job posting to welcoming new team members with cybersecurity in mind.

The benefits of a remote startup structure

Given the growing popularity of remote work, splurging on an office and hiring local employees is no longer the assumed default.

Employees, now having experienced working from home, are less willing to put up with long commutes that bookend each workday and give up newfound flexibility. Employers, observing steady productivity from employees working from home, are more hesitant to pay for physical space when they can work from the digital cloud… Both employees and employers are opting out of the office and embracing the benefits of remote work.

Attract a wealth of talent

Increasingly, remote work is the preferred employment structure for employees—a 2021 survey found that only 36% of people believe the office is best suited for individual work

while the same survey uncovered that 33% of employees would be willing to take a 5% pay cut to work remotely at least part of the time. From technical talent to creative hires, many are looking to remote environments that allow them greater flexibility, increased work-life balance, and the focus and productivity that comes with cultivating your own working environment. In a 2021 survey conducted by Owl Labs, surveying 2,050 full-time workers in the U.S., 83% reported they are at the same productivity level, or higher, working from home compared to the office.

Businesses that operate as a distributed team have a competitive edge when it comes to attracting talent, even if your company isn’t a household name. Running as a remote company—and building a strong remote culture—can be a strong perk that gets potential hires to strongly consider your business as their next professional home.

Expand your talent hiring pool

Being an office-bound business means hiring from within a particular city, limited by the residents who live within a few kilometers or those willing to relocate. For companies with specialized technical or creative needs, this can be limiting. Remote work, and the ability to hire beyond your municipality, unlocks a wealth of talent your business wouldn’t otherwise have access to.

Opening up your hiring process to candidates in different cities, states, and countries could mean finding the perfect product designer in Seoul, South Korea or the ideal infrastructure engineer in Lisbon, Portugal.

Reduce your business costs

One of the biggest expenses for a business can be the cost of leasing or buying office space for your company headquarters. Remote work is changing this. A 2021 survey found that since the start of the pandemic, 22% of companies have reduced their office space—an expense eliminated from the balance sheet.

However, remote businesses have their own unique expenses. For instance, your business may want to introduce employee offsites and retreats for team members to occasionally meet in person or remote work stipends to help employees set up a home office that allows them to do their best work.

Increase the diversity of your team

Hiring more broadly—including from other countries—will likely increase the cultural diversity of your team, creating a workforce with a blend of unique backgrounds that will inform your company’s product or service offerings.

The flexibility of remote work also allows frequently underemployed groups—parents, primary caregivers, military spouses, people with disabilities—to consider your company. A 2022 study from the Economic Innovation Group found that rates of employment for workers with disabilities was 3.5% higher in Q2 2022 than pre-pandemic.

Improve your employee retention rate

Employees who work remotely generally report higher levels of happiness compared to their office-bound counterparts. A 2022 study from Pew Research found that of employees who work from home at least some of the time, 64% reported it was easier to balance their work and personal life. This can lead to higher levels of retention at remote companies.

As a business, low retention can be costly. Hiring a new employee to fill a previous role requires both time and money. Perhaps more importantly, a departing worker also leaves with the knowledge and expertise they hold and the relationships they’ve built over time… A remote culture can be the difference between a company that has a revolving door of employees to one where people stay to build an enduring business.

Manage the logistics of remote hiring

There are barriers and complex considerations to figure out how to hire remote employees. Adding an employee from a different country to payroll isn’t straightforward. Fairly compensating employees across the world can be opaque. Ensuring the security of your company’s data against breaches with remote devices requires robust processes. Luckily, with more companies embracing remote work, there are practices that you can adopt and adapt for your own business.

While we provide common advice below on how to hire remote employees, this should not be considered legal or financial advice. Always consult with your company’s legal counsel, accounting experts, and tax specialists for advice on expanding your hiring footprint while staying in compliance with local, state and federal laws.

Setting up a legal hiring entity

Remote work is a spectrum. Some companies might simply allow local employees to work from home while others hire across continents. While it can be worthwhile to hire far and wide, the further away you hire from, the more complex your employment processes will necessarily be.

With different employment laws, tax regulations, and payroll requirements in different states and countries, you’ll need to remain compliant of these guidelines with everywhere you hire from.

Here are a few options for hiring remotely:

1. Set up established business entities. If you want to hire beyond your state or country, you can set up a legal entity in a country you want to hire from. This will allow you to register your business, set up payroll with the government, pursue proper processes like taxes and payroll deductions, and follow specific employment standards.
2. Hire through an employer of record. With more companies pursuing remote work, global employment platforms like Deel, Remote, and Oyster have sprung up to simplify the remote hiring process. For a price, these services can act as an “employer of record” for your company, allowing you to indirectly hire and set up payroll for employees across various countries—all while remaining compliant with local hiring laws without setting up a business entity yourself.

Creating a remote compensation hiring scheme

When it comes to remote compensation, there are several options for how much to compensate employees around the world.

1. Pay employees based on local market rates. It’s common for remote companies to compensate employees based on the market in which they are based. For instance, two employees in the same role with the same experience would be paid differently based on whether they lived in San Francisco or Berlin. This hiring scheme can be streamlined by assigning location multipliers to particular geographies—for instance GitLab, an open source end-to-end software development platform, has location factors.
2. Pay all employees based on a set rate. As remote work becomes more common, conversations about global salaries and the equity of doing the same work for different pay have arisen. Some companies have opted to pay employees at a certain percentile, regardless of their location. For example, 37Signals, the company behind the project management tool Basecamp, compensates all employees at the San Francisco pay rate regardless of where they reside, and Buffer plans to eventually have location-independent salaries

Optimizing for remote security

Having 100 remote employees is similar to having 100 mini headquarters around the world. Your company will need to ensure the security of each working hub to protect your company’s data to prevent breaches.

Here’s a non-exhaustive checklist for helping to ensure the cybersecurity of your company:

1. Request that employees sign-off on a background check as a condition of hiring
2. Provide remote employees with work devices and prohibit the use of personal devices
3. Require employees to use a global VPN on their work devices
4. Require employees to use two-factor authentication for work-related applications
5. Provide new employees with security training on security best practices and phishing
6. Require the use of a password manager (e.g. 1Password) for company logins
7. Provide employees to access to sensitive data and information on an as-needed basis
8. Have contingency plans in place for lost devices (e.g. remote wiping data)

Attract remote candidates to your company

Remote companies are often more competitive to applicants. But with so many teams embracing remote work, it’s vital to stand out from the crowd and attract applicants to your company by sharing your job postings far and wide.

Cultivate your company’s remote story on your website

As a small business or startup, your website may not be the first place an applicant finds your job postings. However, they will likely visit it before they apply for a role they find elsewhere. Your website—specifically your Careers and About pages—should serve as a spotlight for your company culture and convey to prospective applicants that you’re a business worth taking a career chance on.

Go beyond simply listing your open roles with these website tips::

• Include your company’s mission statement and a list of your core values
• Highlight company perks and benefits
• Include photos and videos of your employees
• Center quotes and testimonials from current employees
• Add snapshots from company events and outings
• Call out unique aspects of your remote company culture
• Include details about your company’s hiring process

Get inspiration from the career pages of remote companies like DigitalOcean, Shopify, GitLab, Buffer, Doist, Help Scout, and Automattic.

Leverage social media channels

As a startup, often your first employees will be individuals paying attention to your company or customers who have already tried your service. Many of those people may already follow you on social media. Leverage your company’s social media channels—from Twitter to Instagram—to share your job postings with your audience.

Additionally, ask hiring managers and teammates if they’re willing to share job postings to their personal social media platforms. Often, early hires can come from the existing networks of your current employees.

Seek out online job boards

With many people looking for remote jobs, there’s a bevy of work-from-home specific job boards and services that are worth posting your roles to. Note that many job boards charge a fee to list your role.

Fully remote job boards:

• Remotive
• Remote.co
• Remote OK
• We Work Remotely
• Flex Jobs
• No Desk

Remote-friendly job boards:

• LinkedIn
• Glassdoor
• Blind
• AngelList
• Indeed

Conduct outbound reachout

As with any role, don’t be afraid to reach out to prospective hires directly. Use LinkedIn to filter for prospective candidates, messaging them on the platform or sending an email that tells them about your company and the posted role.

Set up a remote hiring process

Your hiring process is your first introduction to a prospective employee—it’s worth setting up a sequence that allows you to learn as much as possible about candidates, helps you assess prospective employees fairly, and puts your company’s best foot forward.

Assemble your distributed hiring committee

Find the balance between keeping your hiring committee large enough to get a 360° view of the candidate, but small enough that team panelists can reach a decision within a reasonable time frame while respecting a candidate’s time. The size and scope of your hiring committee will vary depending on the role and team size, but a panel should include a prospective employee’s immediate manager and at least one teammate they’ll be working with.

Here’s a potential hiring committee and their potential roles on the panel:

• Recruiter. Reviewing job postings, posting job listings, reaching out to talent, screening candidates, coordinating and setting up interviews, adding and removing candidates from the pipeline, having salary conversations (note: at a smaller company, these responsibilities might be performed by the hiring manager).
• Hiring manager. Writing job descriptions and postings, interviewing candidates, assessing candidates
• Prospective teammate. reviewing job postings, interviewing candidates, assessing candidates

For transparency, and to allow candidates to prepare adequately, outline your team’s hiring process in your job posting.

Create a remote-friendly job posting

A job posting for a remote-friendly job won’t be entirely different from a non-remote job, with these exceptions:

• Location. Specify the role is remote and where employees can work from. If you only hire remotely in a specific country or particular time zones, specify this explicitly.
• Remote culture. Briefly discuss how your company does remote work, including if there are specific working hours. Also note if the job has any travel requirements.
• Salary. Pay transparency—including a hiring range in your job postings—can be useful to allow candidates to make an informed decision. This is an increasingly common practice and is recently mandated by law in states like Colorado and New York. If you don’t publicly share salary bands, at least note whether your pay is based on a candidate’s local market.
• Benefits. Benefits can vary based on where you hire someone from. Note any benefit discrepancies across your hiring entities.

Set up remote interviews

When hiring remote employees, your entire process will be conducted remotely—including your interviews. For a smooth process, opt for a video platform like Google Meet or Zoom, sending candidates calendar invites with the time of their interview and a link to the meeting room.

While remote work is increasingly common, not everyone has worked remotely. You may encounter candidates who are new to remote work.

Here’s a few tips for helping candidates proceed smoothly through the interview process:

1. Provide them instructions on how to use Google Meet, Zoom, or your preferred video conferencing platform. Encourage them to download any necessary software prior to the interview and to test their video and sound beforehand.
2. Send instructions on how to set up an ideal interviewing environment (e.g. camera on, light filled room, low noise, etc).
3. Be mindful of a candidate’s timezone to avoid early morning or late evening interviews.
4. Prior to the beginning of the interview process, let candidates know precisely who they’ll be interviewing with to allow them to do their own research.
5. For recruitment processes with multiple interviews, be mindful of scheduling to allow candidates to appropriately prepare for each round but avoid having the process proceed for weeks.

As a startup, coordinating processes over email may be adequate. But as you scale, consider using a recruitment platform like Bamboo HR or Workday that allows you to do everything from create and share job postings to sending candidates automated emails to streamline your hiring process.

Create the right assessments

Without a manager over an employee’s shoulders in the office, working remotely can mean more autonomy and less micromanagement. Hiring assessments can help your recruitment committee understand if a candidate can produce high-quality work under a deadline with minimal guidance.

Use these guidelines to create an appropriate hiring assessment:

• Keep it relevant. Create an assessment that mimics the work that a candidate might complete in the course of their day-to-day role. For a customer support specialist, it might be answering a series of tickets. For an engineer, it could be coding the patch to a software bug.
• Ensure it’s time-bound. Provide a suggested time limit, keeping a test project to under four hours.
• Compensate for their time. If your budget allows, compensate candidates for their time in completing a test project.
• Repeat the same project. Provide every candidate you test with the same assessment project to make grading and assessment easier.
• Leave it to later. Avoid giving every candidate you interview a test project—instead, extend a hiring assessment to your final candidates.

Add a personal touch to your process

Hiring remotely can mean back-and-forth asynchronous communication and a process that feels cold to your candidates. Give prospective hires an elevated interviewing experience by staying in close communication and forging a genuine connection—both with applicants who are eliminated and those who proceed.

Chung Yu, a Senior Recruiter at DigitalOcean, is a remote hiring expert who has set up recruitment processes for our own fully-remote team. “I often see candidate feedback on forums where a recruiter might ‘ghost’ on candidates. I believe that follow-up is key and keeping a candidate updated means a lot,” says Yu. “Picking up the phone and calling the candidate adds a very enjoyable experience. Just because we are in a remote environment does not mean we can’t do the simplest of things such as using the phone. Don’t hide behind the email.”

Ask the right interview questions

Alongside role-specific questions that determine a candidate’s expertise and experience, try to get a holistic view of applicants. Yu recommends that companies ask questions that aim to understand how a person operates in a remote environment. These questions should assess whether an employee is capable of working independently, can work with a broad range of people, and is self-motivated.

“I look for whether a candidate had worked in such an environment prior. I also ask how they would prioritize their days and projects,” says Yu. “This gives me a sense of how a person would thrive in a virtual environment like ours.”

One of the dangers of remote work is overworking and Yu also recommends asking candidates questions that get a sense of how they approach work-life balance and avoid burnout. “We truly care about our Sharks. So, I also ask how candidates unplug and what they might enjoy doing on their time off,” says Yu. “This gives me an indication on how a candidate recharges.”

Questions to assess independence

• Could you tell me about a time where you executed a professional project from start to finish?
• How do you approach a new project when you don’t have all the information you need?
• What parts of your work do you find the most engaging or interesting?

Questions to assess interpersonal skills

• What qualities do you appreciate in your team members?
• What strategy do you use for teammates that you don’t quite see eye to eye with?
• Could you tell me about a time you experienced a miscommunication at work and how you were able to resolve it?

Questions to assess motivation

• Could you tell me about a time that you saw a problem at work and fixed it?
• What is something you have achieved professionally or personally that you’re proud of?
• What are your career goals over the next five years?

Questions to assess healthy work strategies

• Do you use any specific strategies or tools to prioritize work in your day-to-day work?
• Could you tell me about a time when you were overloaded at work? How did you approach that?
• Do you have any hobbies or interests outside of work?

Of course, interviewing is a two-way conversation. Leave room during each interview for the candidate to ask questions about the role and the company. Be prepared to answer questions about team culture, role responsibilities and expectations, travel requirements, and company perks.

Build a remote-first company for the long-haul

Creating an ideal hiring process and recruiting team members from around the world is only the first step in building a world-class remote company. To keep them for the long-haul, you need to build a remote-first culture where everyone—regardless of country or timezone—is included and feels well-equipped to do their best work.

Navigating how to hire remote employees is just one of many new areas that startup founders need to learn about on their journey. Check out all of DigitalOcean’s resources for startups and SMBs in The Wave, our startup resource hub, and sign up for a DigitalOcean account to start building your product on DigitalOcean’s virtual servers, databases, and more.