By Kanupriya Chaudhary, Director of HR, People & Culture at Elements Global Services
Expanding into new international markets creates as many opportunities for businesses as it does challenges. There are new regulations, new employees, new economies, new cultures, new customers, new processes and ‘unwritten’ business norms to get your head around.
Nonetheless, our recent survey of 500 UK businesses revealed that 69% plan to expand internationally within the next three years. When asked what they consider to be their top three barriers to expansion, the most popular response was navigating political and economic uncertainty (cited by 36%), followed by difficulties in hiring and onboarding overseas employees, and overcoming language and cultural barriers (both cited by 29%).
Hiring, onboarding, managing and integrating new employees is definitely one of the most important elements for your growth strategy, particularly if you run a small business with little to no experience of operating overseas. And yes, expanding into international markets is indeed possible for even the smallest of businesses.
If you can’t manage your team members in different parts of the world, your international forays could very well fail. Planning for global expansion requires a comprehensive employment strategy, and this is nearly always more complicated than you anticipate it will be. In fact, our survey found that over half (58%) of UK businesses find hiring and onboarding overseas staff to be a challenge.
But there are ways to make it simpler. If your business in ambitious, these four tips for hiring your first international employees will go a long way to help you avoid many of the growing pains associated with expanding into a new market.
Comply with new laws and regulations
Laws, regulations and customs vary more than you might think: everything from the way you pay tax to the rules surrounding mandatory working hours are often completely different to what we’re used to in the UK. Big differences are at least easy to notice quickly, but it’s the little details that can carry potentially devastating consequences if compliance is not ensured.
According to our research, 82% of businesses consider Europe the most strategically important region for international expansion. Bearing that in mind, let’s consider a European example. In Germany, employers are expected to contribute towards a health insurance policy. This is a legal requirement and operational cost, and they must be accounted for when expanding into the German market. There is no equivalent requirement in the UK.
Unless you want to irritate the authorities, you can’t just pay your international employees or contractors from your UK office, according to UK law. If you’re confused or if you need additional guidance, seek out experts who are on the ground in your new market: they’ll have a much better handle on how you can achieve full regional compliance.
Be aware of how GDPR affects employment
The EU General Data Protection Regulation (GDPR) has rightfully seen many businesses act to ensure that that they can continue processing customer data, but there has been less emphasis on employee data. However, the GDPR and other data protection laws extend to the people you intend to hire, too, and they’re an essential consideration when moving into a new market.
Under the GDPR, candidates and employees have the right to access this data for their own purposes on request and the right to understand how you intend to use it – amongst many others. You will, therefore, need to set up processes to ensure that employees can access their data as and when they want, with undue delay from the employer. You will also need to make sure that you are processing, storing, and destroying this information in a fully compliant fashion.
You cannot do this effectively without buy-in from your staff. This will require training, a comprehensive review of data processing activities, and regular impact assessments. This, again, will be done most effectively if locally-sourced experts are used, as they understand the legal and working environment of their country.
Invest in the onboarding process
Just as you can’t just replicate your existing tax and compliance processes to your new region, your existing employee onboarding system will need to be adapted, too. New hires will need to be eased into the process of working with your business, and a straightforward onboarding system that is relevant to the working culture in the region is essential.
Many times, you will find yourself onboarding an employee in your ‘head office’ after which they are expected to carry the flag for your organisation in a new market with remote support. Considering most new hires fail because of a cultural misfit, the challenge multiplies manifold when the cultural integration slows down due to distance and time differences. International businesses must find ways to strengthen the connection between ‘head office’ and regional teams – and sometimes, that means creating it from scratch. A mentoring scheme between workers in your new country and your home headquarters is a good place to start, before moving on to more sophisticated HR solutions.
Personalise your benefits package
Benefits programmes are a crucial way to not only attract new talent, but also to retain it, stopping local competitors from poaching your staff. However, a one size fits all package for staff in your home country and your host country is unlikely to please your international hires.
This doesn’t mean you have to go out and buy beanbag chairs and pool tables just because other companies have: it’s about listening to your team, considering your business goals and the environment, and tailoring your approach accordingly. For example, in Europe and the USA, team-focused benefits and recognition schemes are commonplace. However, in South East Asia, individual achievement and recognition are rather more emphasised.
Small touches can be as simple, but highly effective such as providing materials in the right language. You would be surprised how many companies neglect to do this. How comfortable would you be if your benefits were only communicated to you in Mandarin or Spanish?
In summary, hiring internationally need only be difficult if you’re not sufficiently strategic about it. Of course, there are money and time-related risks involved, but they don’t have to be excessive. Working with international employment and HR experts can help to minimise them.