When it comes to expanding into overseas markets, few challenges are as daunting as hiring new employees, especially in countries where the culture, regulations and language are vastly different than in the U.S. At the same time, hiring the right employees and ensuring that your company is compliant with all applicable regulations is essential to the success of your expansion.
It’s not a straightforward process, but there are considerations and resources that can help you get a better understanding of how to proceed and help you get it right, says international business expert Larry Harding, vice-chairman and executive director for corporate development for London-based Radius, a business-consulting firm.
Here are the four things you need to now to be effective at hiring overseas employees:
Resources. In recent years, the U.S. government has placed renewed emphasis on international business and has a number of resources to help you navigate foreign markets. A good place to start is the Department of Commerce’s U.S. Commercial Service, which offers assistance in helping U.S. companies succeed overseas. Your local Small Business Development Center can also help you find additional government resources. Harding also recommends using LinkedIn groups to find employment services and professionals in the markets to which you’re expanding.
Tax and employment regulations. When you’re conducting business overseas and hiring overseas workers, you need to be aware of the international tax complexities that come into play. Countries have different regulations about the benefits, vacation time, sick leave, and other employee accommodations necessary. Non-compete agreements may not be legal or you may find yourself dealing with unfamiliar union regulations, according to the Small Business Administration. You may even have restrictions on the amount of notice you must give before firing someone.
You may also have tax consequences in the U.S., Harding says. In some cases, it may be advantageous or even necessary to create a separate subsidiary in the country. This is where you need a guide who can help you be familiar with how to comply with local employment and other laws, Harding says.
“An accountant with international experience is useful, but it’s also a good idea to get help from someone who’s handled hiring in that area, such as a consultant,” he says. “Many consulting firms who work in particular regions have a network of resources they can tap to help you.”
Cultural insight. It also helps to understand the culture of the country and what the expectations of employers include. Work on understanding business norms. For example, employees in some countries may be open and direct, whereas in other countries, the approach to communicating with them may require a more measured approach. Again, this is where a consultant or government agency with experience working in that region can help, Harding says.
Time. It’s likely going to take you six months or more to find a location, learn about employee regulations, and hire your first employee. Harding says it’s critical to allow yourself enough time to complete this process properly and not rush it.