4 Obstacles to Avoid When Hiring Abroad
The road to business success is fraught with obstacles. In the United States, it can seem as if talent pools are shrinking faster than the Great Salt Lake. And the employees you can find are demanding far more than just a steady paycheck.
The world of work is changing, but so is the world itself. Technology is making it smaller, and that resizing puts global hiring within reach of companies of all sizes. Of course, making such a move presents a whole new set of obstacles.
The good news is that tons of businesses have already crossed borders. That means barriers have been exposed and best practices have emerged in the process.
If you are considering hiring abroad, there’s no reason to not go in with your eyes wide open. Here are four obstacles you’re likely to confront and ways you can overcome them.
1. Establishing a Legal Entity
Even in a global economy, you can’t simply hire employees in another country whenever and however you want. That talent is subject to the laws, rules, and regulations of their resident country. Companies that hire them are as well.
To put someone elsewhere on your payroll requires establishing a formal legal entity in that country. Doing so on your own means learning all the relevant laws and establishing a legal presence there. Cultural differences and language barriers can make this obstacle even larger than it already is.
If you are looking to open a foreign branch of your company, going to all this trouble makes sense. But if you simply want to hire employees to work in their home countries, use an employer of record instead. An EOR serves as the employer-on-paper for employees in each country, handling all the legal compliance and more.
You still control who gets hired and what they do for your company. But the EOR can recruit and onboard employees and administer payroll and benefits for you. Even better, if a compliance issue arises, it’s on the EOR, not you.
2. Language and Culture
Depending on where your foreign hires live, the language barrier can be substantial. Not only will you need to figure out how to communicate with them, but you’ll also need to mind your own words. Linguistic and cultural norms may vary widely.
Language is shaped by the values, beliefs, and traditions of a culture. Where someone lives dictates the idioms, slang, and colloquial expressions they use. They are so completely part and parcel of their speech that few people even realize they’re using them.
Being cognizant of language barriers and changing speech to overcome them will take some practice. However, it’s probably the best way to ensure that those involved in a discussion actually understand one another. Moreover, because most people will resist admitting they don’t understand, you risk communication failures if you don’t try harder.
Start with something as easy as saying “yes” instead of “sure.” Then, stop beating a dead horse, beating around the bush, or beating the clock — all of which are potentially lost on non-native speakers. Idioms make language fun, but they also make it confusing. Use less figurative language, speak slowly, and enunciate clearly to help ensure the message you want to send is, indeed, received.
3. Background Checks
You have an obligation to protect your company, employees, customers, and other stakeholders from harm. If you currently conduct background checks on domestic applicants under the Fair Credit Reporting Act, you know the score. Full disclosure to and permission from the candidate are requisite.
Other countries have specific laws regarding disclosure and privacy, so make no blanket assumptions. You don’t want to violate them when you’re recruiting global hires. So how do you begin to break down this barrier?
If you partner with an EOR, your problem is solved. This service provider will already know how to conduct thorough, legally compliant background checks in the countries they operate in. If you aren’t working with an EOR, you can hire a local agency to conduct them so you’ll know they’re done by the book.
The importance of background checks can’t be denied. Just because you’re hiring employees in another country doesn’t mean they’re automatically any more honest than stateside ones are. Make sure you vet them fully so you’re hiring the right people for the job.
Politics can be divisive in every country in the world. Certainly, power changes hands from time to time, which can cause a sea change in how a country is run. But you’ll need to consider the political as well as the business environment before you make a global hire.
Political stability is vital. It’s wise to avoid hiring employees in countries where the power shifts are frequent or violent. You’ll probably also want to stick with countries that place importance on the solidity of both physical and digital infrastructure.
Countries that pay more than lip service to democracy will be your best bet. Although their specific laws will be different, most of the underlying principles will be shared ones.
When you hire internationally, you’re opening a door between your company and the country your employees live in. Make sure you want to open that door before you make a hire. It might be difficult to close it without someone’s fingers getting smashed.
Own the Obstacle Course
International hiring offers exciting opportunities for companies willing to try it. Of course, making the foray into another country isn’t without challenges. Knowing what they are and how to overcome them before you make the leap is a smart move.
Do your homework, partner with those who can help, and start small. Just don’t let a few obstacles keep your company from running a successful race.