As your business expands, the need to hire talent overseas grows. The recruiting and hiring process in other countries is very different from the U.S., and can cause issues for companies trying to expand. Here are the top 3 challenges companies face when hiring overseas:
Hiring Local Talent vs. Utilizing Expats
It’s a common question: do you send US employees overseas to start a new office or hire local talent? The US employee will bring product and company expertise, and can quickly introduce the company culture to the new office, but a local hire will speak the language, provide understanding of the local business culture and can help with local contacts and referrals. Sometimes it can be helpful to start with both an expat and a local hire – they can each utilize their unique skill sets to get the office up and running smoothly.
Navigating Labor Laws
Many companies are surprised to learn that labor laws in other countries are more favorable to the employees than the employer. Most countries have specific guidelines for employment agreements and employee handbooks, and very strict policies for terminating employees. Labor compliance is always evolving, and most countries strictly punish companies for breaching labor laws. In some countries, they “name and shame” companies publicly for not adhering to certain policies! It is best to talk to a global HR compliance expert before hiring in other countries to make sure you have policies in place to maintain compliance.
Planning for Expenses
Hiring talent overseas is not cheap! Most countries outside the US have more generous vacation and leave policies, pension requirements, and large severance packages. Determining if an employee is an independent contractor versus employee also has ramifications for payroll, and non-compliance or misrepresenting employees as contractors can carry severe penalties.
To get started, it is recommended that you consult with a global HR compliance expert before hiring employees in other countries. Using global consultants, local recruiters and resources can ease your transition into new territories. There are compliance tools and technology to help ensure you don’t make compliance mistakes along the way. To learn more about global HR compliance and how we can help, click here