New markets mean a whole range of different legal and employment regulations to think about, not to mention cultural differences and language barriers — all of which could slow down the recruitment process.
When launching in a new territory, many companies make the mistake of doing so without hiring any local team members. But local talent will often have the cultural knowledge, valuable customer insights and language skills needed to drive business growth in this unexplored market. Hiring locally also means you’re not restricted to the talent in your current workforce, who may not be so willing to move abroad.
Without the right team in place, the risk of failure can be even higher when expanding internationally. However, with the right team, you’ll avoid many of the growing pains associated with global expansion.
So, what do you need to do when hiring local talent in new markets?
Familiarise yourself with local employment laws
The worst way to introduce your business to a new market is to do so without full awareness of its laws, regulations and customs. Employment laws can vary significantly from one continent to the next — even from country to country.
Did you know that workers in Greece are entitled to five paid days off for marriage leave? Or that employers in Australia are required to pay superannuation contributions and a Fringe Benefit Tax (FBT) if they provide certain benefits to their staff?
Whether it’s corporate tax regulations or the rules surrounding mandatory working hours and holiday allowance, not being aware of a country’s local laws can have detrimental consequences when you’re trying to expand internationally.
Protect employee data
When the GDPR was introduced in 2018, there was a big focus on customer data. But the GDPR and other data protection laws also extend to the people you hire.
So, before moving into a new market, you’ll need to have adequate processes in place to ensure employees can access their data as and when they need it — and that you’re processing, storing and destroying this information compliantly.
Look at regional salaries
It’s essential to look at regional salaries, local market conditions and socially expected norms when deciding the salaries of international employees. For example, it’s important to be aware that some countries, such as Spain and Austria, cite month 13 and even month 14 salary payments.
By law, employers in countries like the UK must pay workers a national minimum wage. However, no such rule exists in Singapore. Instead, it’s common practice for employees to receive an annual bonus equivalent to at least one month’s salary. It’s not unusual to see employees in Singapore receiving annual bonuses of two to three times their monthly salary during good economic times!
All these regulations and customs are vital to keep in mind to ensure your business is in line with expectations in that country. All salaries should also be offered in the local currency of the country you’re looking to expand into.
Create a tailored benefits package
Although some systems and processes can be exported easily, this is not the case for employee benefits. In Europe and the US, benefits tend to centre around team performance and are intended to encourage collaboration — which is why bonuses will often be calculated and allocated collectively. However, in many Asian countries, the emphasis is placed on individual achievements which is reflected in benefits packages.
As such, a catch-all benefits package designed for staff in your domestic country is unlikely to please international hires. Instead, you need to take a bespoke approach and create a package tailored to preferences in each country.
Don’t neglect the onboarding process
When you’re entering a new market for the first time, don’t rush the process. You can’t expect to just transfer your existing employee onboarding system directly to a new market.
It takes around six months for an international employee to settle in a foreign business fully, so management of those first six months will make all the difference in ensuring they stay on long after the probation period is over.
Creating guides in each country’s language is a good place to start. A mentoring scheme between workers in the new country and the original office will also help ensure your company feels connected. Exchanging international workers between locations, either for training or work opportunities, can then help to strengthen links even further and improve global staff engagement.
Enlist a local expert!
Putting together the right team takes time and a significant amount of planning. But get it right, and you’ll increase your chances of success abroad.
If you need additional guidance, enlist a local expert who can help you navigate the international hiring process. A Professional Employer Organisation (PEO) in your chosen country can guide you through all the complexities of local employment laws and customs to ensure you stay on the right side of compliance and attract the best talent.
If you’re looking to hire overseas, we can provide the local knowledge and support you need during the recruitment process. Get in touch today to find out more about our international employment services.