Expanding to the U.S.? Here’s Why Hiring is Crucial
One of the biggest challenges for UK companies expanding to the U.S. is hiring and managing American employees.
The U.S. job market is vastly different from the UK—higher salaries, fewer employment protections, and a different approach to recruitment.
📌 Key Differences Between UK and U.S. Hiring:
✅ At-Will Employment – U.S. employees can be hired and fired more easily.
✅ Higher Salaries – U.S. compensation is often 30-50% higher than in the UK.
✅ Healthcare Benefits are Expected – Unlike the UK’s NHS, most U.S. employees expect company-provided healthcare.
✅ State-Specific Laws – Hiring rules vary by state, unlike the UK’s nationwide system.
So how do you hire your first U.S. employee while avoiding costly mistakes? In this guide, we’ll walk through the process step by step.
Step 1: Do You Need a U.S. Entity to Hire?
You have three main options when hiring in the U.S.:
🔹 Option 1: Set Up a U.S. Entity (W-2 Employees)
• Best if you’re scaling long-term and want full control.
• Requires a U.S. business structure (LLC or C-Corp), tax setup, and payroll system.
• Employees are classified as W-2 workers, meaning you handle payroll taxes & benefits.
🔹 Option 2: Use an Employer of Record (EOR)
• A quick way to hire full-time U.S. employees without setting up an entity.
• The EOR acts as the employer on paper while you manage the employee.
• Providers: Deel, Rippling, Papaya Global, Remote.com.
• Best for businesses testing the U.S. market before committing to an entity.
🔹 Option 3: Hire Independent Contractors (1099 Workers)
• Contractors are easier to onboard but come with legal risks if misclassified.
• They don’t receive benefits and handle their own taxes.
• Best for short-term or flexible roles.
💡 Pro Tip: If you’re not ready to open a U.S. entity yet, start with an EOR or contractor, then transition to direct hiring later.
Step 2: Understanding U.S. Salaries & Compensation
📌 U.S. salaries are higher than UK salaries—sometimes significantly.
💰 Average U.S. Salaries for Key Roles (Compared to UK)
| Role | UK Salary (£) | U.S. Salary ($) |
|---|---|---|
| Software Engineer | £60K – £80K | $120K – $180K |
| Sales Executive | £50K – £90K | $80K – $150K + commission |
| Marketing Manager | £50K – £70K | $90K – $140K |
| Customer Success Manager | £45K – £65K | $70K – $120K |
👉 Expect to pay at least 30-50% more in base salaries compared to the UK.
Step 3: Offering the Right Employee Benefits
Unlike in the UK, U.S. employees expect benefits, especially for full-time roles.
📌 Common U.S. Employee Benefits:
✔ Health Insurance – Most sought-after benefit (usually costs $500–$1,000 per employee per month).
✔ 401(k) Retirement Plan – The U.S. version of a pension scheme.
✔ Paid Time Off (PTO) – U.S. employees typically get 10–20 days per year (less than UK holiday allowances).
💡 Pro Tip: Offering strong benefits makes your company more competitive, especially as a foreign employer.
Step 4: Where to Find Top U.S. Talent
The U.S. hiring landscape is fast-moving and competitive. Here’s where to find the best candidates:
🔹 LinkedIn Jobs – Best for professional & sales roles.
🔹 AngelList – Great for startup talent in tech & marketing.
🔹 Wellfound (formerly AngelList Talent) – A top platform for hiring startup employees.
🔹 Hired.com – Best for recruiting tech talent.
🔹 Recruiting Agencies – Use a U.S.-based recruiter for high-level roles.
💡 Pro Tip: The U.S. job market is aggressive—top candidates get multiple offers fast. Move quickly with interviews and offers.
Step 5: Setting Up Payroll & Compliance
If you hire full-time U.S. employees, you’ll need to handle payroll taxes and compliance.
📌 Payroll Costs to Expect:
✔ Federal Payroll Tax – ~7.65% (Social Security & Medicare).
✔ State Payroll Taxes – Varies by state (some states have no income tax).
✔ Unemployment Tax – 6% (federal) + state-specific rates.
🔹 Best U.S. Payroll Providers for UK Businesses:
✅ Rippling – All-in-one payroll & HR platform.
✅ Gusto – Best for small businesses hiring in the U.S.
💡 Pro Tip: Work with a U.S. accountant to avoid tax compliance issues.
Step 6: Navigating U.S. Work Culture Differences
The U.S. and UK have different work cultures, which can affect management and hiring.
📌 Key U.S. vs. UK Work Culture Differences:
✅ Americans Expect Direct Communication – Less subtle than UK business culture.
✅ Bonuses & Performance Pay Matter – U.S. workers often negotiate bonuses & commissions.
✅ Quicker Hiring & Firing – Unlike in the UK, hiring and layoffs happen faster.
💡 Pro Tip: Be prepared to negotiate salaries, offer clear career growth paths, and adapt to faster decision-making.
Final Thoughts: How to Hire Successfully in the U.S.
Expanding to the U.S. is an exciting step—but hiring mistakes can be costly.
📌 Key Takeaways:
✅ Decide how to hire – Entity, EOR, or contractors.
✅ Budget for higher salaries – U.S. compensation is higher than in the UK.
✅ Offer competitive benefits – Health insurance & retirement plans are key.
✅ Move fast with offers – Top candidates get multiple offers.
✅ Stay compliant – Work with a U.S. accountant to manage payroll & tax.
💡 Need help hiring your first U.S. employee? Canyonstone Partners provides expert guidance on U.S. hiring, payroll, and compliance so you can scale your team without the headaches.