Have you read our latest blog post which gives 4 good reasons to hire international workers? Are you convinced? Ready to get started? Not so fast! Before you get started, there are a few things to check to avoid falling into the pitfalls of international recruitment. Here’s everything you need to know if you’re going into international recruitment 👇
#1 – Know the market
Before posting your job offer, you should do a quick analysis of the job market situation where you want to recruit. Here are some questions to answer:
Is the market tight?
Depending on the country or region, the labor market can be tight. A labour market is said to be tight if there are more job vacancies than available workers. This happened in Japan, in May 2020, the ratio of job vacancies to applicants was 1.2 according to the figures from the Japanese Ministry of Health, Labor and Welfare. It is important to analyse the level of tension in the labour market to adapt your recruitment methods. In a tight market, you will have to work harder to convince candidates to join you. On the other hand, in a “loose” labour market, you will spend more time sorting through the applications.
What skills am I looking to prioritize?
Before taking the first step in your international recruiting process, ask yourself what skills are you looking for the most. This will make it easier for you to find countries where workers are known for the skills you are seeking. Once you have done this, you can research schools, companies, and innovation projects in each country to target your recruitment.
What are the most common recruitment practices?
Recruitment practices and methods vary from country to country. Once you’ve identified the country, you’re willing to recruit in, learn more about these practices. Is it better to recruit through a local agency? Which job boards are most commonly used? Are there any hiring regulations or non-discriminatory practices? This will help you to be compliant but also to stick to the market expectations.
Our advice: once you have defined the country where you want to recruit, ask a local expert to advise you on the best local recruitment methods.
#2 Do you have to establish an entity or not?
In some countries, it is mandatory to create a legal entity to conduct business and pay employees. This is an essential element to take into account. Creating an entity can be time consuming and more complex than you think. You will also need to choose a business structure that fits your business in the specific country.
In those countries where it is not necessary to set up an entity to do business, however, it is best to work with a local representative. This expert can help you open a bank account or liaise with the authorities.
#3 Ensure compliance
Compliance is your number one priority if you do business internationally. Each country has its own laws regarding employment, taxation, pensions and benefits.
Before recruiting, make sure you know all of the legal and mandatory benefits to be provided in the country as well as those that are usually granted to employees to remain competitive. These benefits include annual leave, national holidays, sick leave and parental leave. In some countries, it is mandatory or common to pay for transportation, health insurance or meals. Some collective agreements may require even more benefits for employees.
Here are some examples:
In France, since 2016, all private sector employers are required to provide a group health insurance plan for their employees. They must also participate in at least 50% of the costs of the contributions.
In the Netherlands, in addition to the minimum 20 days of paid vacation, every employee is entitled to a vacation bonus or “vakantiegeld”.
You should also be aware of local laws regulating employment and hiring. There may be certain anti-discrimination practices that must be followed, for example. You may also have to structure the work week differently for the employee based on the legal work week or time difference. In Egypt, for example, the work week runs from Sunday to Friday.
In terms of hiring practices, you must also consider everything related to contracts, trial periods, social protections or dismissals. In Europe, employees are more protected than in the United States where employees are considered “at-will”. At-will means that both the employee and the employer can terminate the employment relationship at any time. In many European countries, a certain number of documents must be provided to the employee when they leave the company.
Our advice: consult with legal professionals in the country to ensure that you comply with all employment laws. Breaking the law can expose you to fines or legal action.
#4 Be aware of all payroll rules
Compliance also means ensuring payroll accuracy. From one country to another, rules, contributions, tax rates… can be much different.
As a first step, make sure you know the minimum wage and the salary scales for the position you are offering. The scale varies according to the experience and qualifications you are expecting. You also need to know the regulations under potential collective agreements or overtime pay requirements.
You also need to know from the beginning in what currency you want to pay your employees in order to take into account the exchange rate.
Beyond salary, you need to understand the rules regarding compensation. Some countries require a 13th month bonus or profit sharing. Other countries do not impose this but it is customary.
Finally, it is necessary to have local payroll expertise. You will need to know the income tax scales, the specificities according to the employee’s plan, the social security contribution rates, and the pension plan…
Our advice: if you do not have the local expertise in-house, outsource your payroll to an external service provider. A global payroll service provider will have the local expertise and knowledge of payroll, thus ensuring full compliance.
#5 Embrace cultural differences
When recruiting internationally, it is important not to rely on the cultural considerations of your country. On the contrary, you should take the time to learn about the culture of your target country. Some cultural factors can have an impact on recruitment practices. In Anglo-Saxon countries, the resume can be up to 5 pages long, for example.
Cultural factors will also have an impact on company cultures. From one country to another, the professional world can be very different. The Netherlands and China, for example, have two completely different corporate cultures. The Chinese corporate culture is rather authoritarian and collective, while the Dutch corporate culture is rather participative and individualistic. China has a long-term approach whereas the Netherlands has a rather short-term approach.
Recruiting internationally means that you are ready to manage a multicultural team. We will come back to this very soon in an article dedicated to multicultural management.
#6 Anticipate remote recruitment & onboarding
In most cases, if you are recruiting abroad, you are doing so remotely. This is another challenge to overcome.
The trick to recruiting remotely is to have the right tools that will make it easier to collect applications, follow up and conduct interviews. We advise you to opt for a smart HR software that will allow you to sort applications according to specific criteria. Also invest in a collaborative work platform and/or a video conferencing tool such as Teams or Zoom.
For onboarding, set up a specific program for your new recruits. You will have to be even more available and listen carefully to ensure a good understanding of your company’s missions and values. Do not hesitate to create documents that can be consulted at any time by new employees. Onboarding a new remote employee requires a different perspective than traditional onboarding. Even the best recruits can get lost if they are not properly onboarded. Need some help? Here is our checklist for a successful virtual onboarding!
Did you check all the boxes? Then you’re ready for international recruitment. Follow our upcoming blog posts. You’ll find tips and strategies for international recruitment, multicultural management and many other tips and tricks!
This post was written by Novative. They are an exhibitor on the HRTech247 Payroll, Time & Attendance floor in the Technology Hall here.