Hiring Your First Overseas Employee

Being able to scale a business internationally is an exciting prospect that can create many new job opportunities. However, to get the best from expanding overseas, it is important to know the rules when hiring talent for international locations.

Despite the new premises operating under the same umbrella, the business will need to conform to the laws regarding employment as well the processes that need to be followed in the host country when searching for new talent abroad.

Although the hiring of perspectives internationally is not as straightforward as it would be in conventional circumstances, there are some steps that can be followed that ensures a business is making the right decisions regarding overseas employees.

The following is an overview of some of the factors that must be considered when planning to hire new employees for premises abroad, which can help streamline the hiring process and avoid the common pitfalls.

Carry Out Research to Understand the Culture of the Host Country

There can be several reasons why a business decides to hire international talent. Although there are instances where the business can operate more seamlessly from a financial viewpoint, many businesses choose to go global due to the vast talent pool available.

However, to get the best from prospective employees, it is important to be fully aware of the culture, from both a social and professional vantage point.

Although there are many checks that need be carried out regarding expansions, understanding the culture of the host country can be the most important.

The importance of research regarding the culture is important as it allows a business to understand how a work force operates. As such, the business can ensure the requirements of the company align with the culture of the proposed country the business wants to expand to.

Make Sure There is Clarity Regarding Expectations of the Job Role

An oversight during a conventional job interview may not seem detrimental but could be costly and time-consuming when sourcing talent internationally. Although a job role may be clear in its native country or internally, those applying to the company for the first time may need some elaboration on the role.

As such, it is important that the business is aware of the expectations potential employees should meet, and that this is clearly conveyed to prospective members of the workforce.

Businesses can collate a list of qualities that prospective employees should possess, while information being sent to prospective employees should be reviewed to ensure that people know what is expected of them should they decide to make an application for the role.

A job role that is unclear could mean that people with the wrong skillset apply for the role, which not only draws out the employment process, but could also make it more expensive.

Review Payroll and Compensation Compliance in the Host Country

It is not only the taxation laws of the host country that need to be adhered to, but also the payroll and compensation. For example, those expanding their operations to countries like Australia need to be aware of the mandatory employer contribution that needs to be made regarding employer’s pensions.

Similarly, those with a focus on Europe should factor in that countries such as France can ask for as much as 50% of a salary for social security contributions.

Simply maintaining the same payroll system used in the native country of the business could mean that the company is not meeting its liabilities, nor those of the employees. This could lead to even more expense, as the business could be subjected to a series of fines and penalties.

Businesses Need to Plan Salaries Around Local Market Conditions

When expanding abroad, some may be tempted to offer the same salary as those based in the home country, but this could mean that the business is spending more than it needs to. This is not to say that employees overseas should be underpaid but based on local market conditions and benefits regulation.

It is also important to ensure that any job roles being advertised provide the salary in the currency of the country the business is entering. If the salary is high after considering all the taxation and commitment factors, then this too needs to adhere to local market conditions.

Although it may seem tempting to offer the same salary as those based at home, there are several other factors that need to be considered which mean the cost of maintaining this salary could be complicated in the long term.

Employee Rights and Legislation

Another important factor that needs significant attention is how employee rights and legislation. In some instances, little could change, whereas other instances could require dramatic changes.

When a business expands its operations abroad, it should not assume the same rights and legislation apply to those in the host country as those at home.

Ascertain a Clear Probation Period and Termination Policy

Although the aim of international hiring is to find the best talent available, there could be times when the employee selected is not the ideal fit. Having a clear probation period in place ensures that the business can alter its hiring process rather than spending money on a salary where the role is not being fulfilled.

However, it is important to ensure that the terms and conditions listed in the probation period meet the legal requirements of the host country.

The requirements that need to be met will vary depending on which country the company is expanding into. The same is true for those wanting to terminate the position of an employee.

Countries expanding into Australia will need to be aware of the one month’s notice and severance pay if the employee has been part of the business for one year or more. France has a focus on worker protection and will enforce a notice period of three months along with severance pay.

Although no business wants the worse-case scenario to arise, having steps in place that conform to legislation ensures that there is less impact for the business financially moving forward, which helps when looking to hire others to fill these vacant positions.

Offer a Clear Holiday Entitlement Description That Conforms to Current Market Conditions

Although taking leave is a common part of many roles, the way is which leave is accrued and taken can vary vasty depending on the country.

For example, China has become the base for many successful businesses and has found a wealth of talent within the tech industry. However, the way holidays are reviewed is much different to the Western world and is calculated on the years of service.

It is small differences like these that reinforce the importance of solid research when putting together a recruitment drive abroad.

Prepare a Positive Onboarding Experience

Given the complications associated with hiring international employees, it would be easy to assume that the onboarding process is unimportant, but nothing could be further from the truth.

Having a robust onboarding system in place not only ensures that employees feel confident in their role, but also ensures they are meeting the relevant milestones to ensure off value is provided to the business.

The onboarding process is also the ideal time to go through the paperwork which explains holiday allowance, sickness leave and employee benefits. This ensures any questions regarding the terms and conditions can be answered sooner rather than later, instilling confidence into the workforce.

It is worth noting statistics show as much as 70% of employees will stay with a business following a positive onboarding experience, so it is important that focus is put on this aspect of the hiring process.

When a business expands internationally, it is not only the hiring of international talent that is important but being able to retain them.

Understanding the culture of the host country and ensuring that the business puts procedures in place ensure that the complicated process of hiring international employees can be streamlined.