If you’re a startup founder looking to fill C-suite positions, don’t limit yourself to the narrow confines of geographical borders. Instead, widen your focus to encompass international talent.
The times demand that employers globalize their recruiting methods. HR professionals should be playing a lead role in developing that process by collaborating with global consultants, industry experts, and government authorities.
However, recruiting from a global talent pool can be fraught with challenges. You're going to need to know how to figure out foreign laws and tax codes. You're also going to need to learn how to tailor your recruitment strategy for different geographic regions to sell your brand. With so many possibilities to choose from, things can get a little tricky.
This article is for companies moving into a foreign market and those who are hiring remote international workers. It will cover these three primary points:
- International hiring practice differences
- Five tips for hiring anywhere in the world
- The challenges of hiring an international workforce
Why you should hire international talent
By hiring from anywhere in the world, you increase the possibility of finding the best talent. This makes even more sense when there’s a shortage of skilled talent in your industry.
International recruitment also has other advantages. For example, hiring on a global level brings diversity to your workforce, which helps your company think in new and unexpected ways. The language skills and market knowledge a candidate from another country possesses provides a startup with ways to enter new markets. If you’re considering a new export market, there's much to be gained by having an employee with local knowledge.
The challenges of hiring international talent
Many US companies are taking a more strategic approach to find overseas talent because job seekers are no longer flocking to them. The days when US companies are automatically considered the most desirable employers are probably gone forever.
Even US companies with promising career opportunities and competitive salaries might find themselves struggling to compete for talent against home-grown businesses with which local talent is more familiar.
A Harvard Business Review survey of 300,000 employees in China found that Western companies' advantage as the most desired employers fell by approximately 50% for a recent three-year period. There's evidence to suggest that the edge has further eroded since then.
As local companies evolve, they offer opportunities that match and often exceed those of foreign enterprises. IBM and Infosys are two companies that have experienced the adverse effects of this changing job market.
5 tips for hiring anywhere in the world
Here are five tips for hiring talent anywhere in the world:
Look in the right markets
You might be tempted to look for candidates in big countries with lots of local talent—for example, India. If you do this, you’re going to be competing with multinational conglomerates for job seekers.
Tech behemoths such as Facebook, Google, and Microsoft do a lot of recruiting in countries such as China and India. If you want to find the right people for your startup and spare yourself massive headaches, it's best to seek candidates in less popular locations.
For example, think about trying Eastern Europe or South America. By traveling the less traveled hiring route, you might be able to secure extraordinary talent at a fraction of the cost.
Don’t assume you’ll save boatloads of cash by parachuting into a new market to grab talent. The shortage of skilled labor worldwide has pushed up wages to levels that sometimes exceed those in the US. For example, compensation for top managerial positions in São Paulo is higher than in New York City and London. Engineers in this city earn more than their Silicon Valley counterparts.
Finding experienced executives in Asia and Europe can come with a massive price because candidates in this region are usually well compensated in their home countries. Because of rising hiring expenses, US organizations should have a backup plan to target specific areas. Vietnam is particularly popular because labor costs are lower.Establish a referral program
According to LinkedIn, almost half of all US organizations hire their best workers by using employee referrals. If you have remote workers on your payroll, ask if they know of any eligible candidates that would be thrilled to work with a company like yours. Incentivize the process with monetary benefits, and before you know it, you’ll have a plan to discover high-caliber talent from anywhere in the world.
Beef up your employer brand
An exceptional employer brand utilizes a “pull” instead of a “push” appeal. This means you’re magnetically drawing job seekers to you rather than going out of your way to finding them.
To beef up your brand, establish your business as a highly desirable workplace that people all over the planet are dying to work for. You’ll also need to position yourself as an employee-centric company that offers an array of robust benefits to team members.Harness the power of social media
A 2017 report showed that over 95% of all companies successfully recruited from LinkedIn. This is proof positive that if you’re looking to recruit from a global workforce, social media should be an integral part of your strategy.
However, keep in mind that not every geographical area uses the same platforms that the United States does.
Attend international conferences
The further you expand your circle of connections, the more likely you'll come across remarkable talent. Conferences in international locations make for terrific networking events, giving you access to a larger talent pool and allowing you to connect with more possibilities at a lower cost.
Geographical differences in hiring practices
Many US companies fail to fully understand how different recruitment can be in other parts of the world. Here are some significant differences between domestic and European talent markets:
- EMPLOYMENT AT WILL: This concept, which means an employee can be dismissed from a company for any reason and without warning, is nonexistent in European employment law. Unless just cause can be established, it’s difficult to fire anyone without incurring substantial liability.
- PERSONAL QUESTIONS: European companies are accustomed to asking applicants personal questions that managers in the US wouldn’t even dream of bringing up. These are things like if the candidate has kids or if they hold certain religious or political beliefs.
- PERSONALITY TESTS: Any assessments such as personality tests must be thoroughly vetted in the US because of concerns about bias. In Europe, these tests are freely allowed.
- EMAIL: In some countries, emailing teams outside of office hours is considered harassment. Volkswagen stopped this practice years ago. Daimler uses software that automatically deletes all emails sent to employees who are out of the office. Keep in mind that an email sent during one employee's office hours might be another's online hours.
- SUCCESSION PLANNING: In the Middle East and Russia, it's challenging for US organizations to recruit executives with exceptional leadership skills and formal training. C-suite level candidates in those geographical areas might be promoted based on close relationships with top managers instead of actual competence. Because of this, succession planning works a lot different than it does in Western companies.
Country specific differences
In China, the secret to attracting top-tier talent is by establishing robust personal connections. That’s because senior leaders in this country look to their networks when hiring someone. So, if you want to set up an office in China, it pays to have a relationship with someone local.
US tech companies will find that it's relatively easy to recruit entry- and mid-level employees in China and India. However, filling higher-level positions is becoming increasingly difficult. It's best to seek out candidates who've been working in the United States and now want to return to their home country. You'll get someone intimately familiar with the local culture, knows the language, and has US knowledge.
African markets are less costly staffing alternatives compared to other parts of the globe. In these markets, US businesses continue to enjoy an advantage over local companies. US businesses expanding to African markets will discover that there are similar recruitment practices in Western countries.
Nigeria has emerged as a hotbed for global talent. The problem is conducting business there can be challenging because of rampant corruption and continual attacks by Boko Haram, a terrorist group.
Canada is similar to the US in its recruitment practices but with a slightly more European flavor. Mexico is already a huge source of workers for lots of US companies, and the country will become even more essential in the next several years because of rising labor costs in China. US companies seeking to recruit technical talent in Mexico should set up operations with already well-developed infrastructure. They should also partner with companies that have strong ties with local markets.
An excellent strategy to overcome foreign recruitment problems is to draw on the expertise of US businesses in the area. This way, you can identify candidates who are knowledgeable about US practices and local culture and customs.
As you develop your global talent acquisition strategy, you should reach out to the chamber of commerce in countries you plan to do business. You can also hire an experienced executive search firm to do the recruiting for you. The Association of Executive Search and Leadership Consultants can help you find one.
Another excellent way to establish a worldwide talent acquisition network is by connecting with universities and business schools that stay in touch with their alumni worldwide. It's a good idea to retain a business consultant or attorney who's an expert in the country's laws where you're going to run your operation.
Although it might seem to make sense for a US biotech enterprise to expand into Switzerland because of its abundant talent, this doesn't mean that potential employees will be clamoring to work for you.
To attract workers, you're going to need an intimate understanding of the market's laws, customs, and cultural nuances. A good consultant can help you with this.
For example, say you post a job in the Netherlands. When you do, you might be shocked when you don’t get too many people applying. Many Dutch applicants expect to be hired through agencies. Picking a consultant’s brains before you post a job can help you avoid such embarrassing pitfalls.
Without an expert’s advice, you might never know why a job offer got turned down. German salespeople expect to either get an automobile allowance or be provided with a vehicle. If prospective employees don’t get what they want, you might never know why they turned up their nose at your job opportunity.
Hiring remote international talent
So many companies struggle with how to hire remote international talent. If what you want to do is to hire a full-time employee in a country other than your organization's place of incorporation, you'll need to first set up a legal entity in that locale. Your operations will then be regulated by the local government.
If you don't want to do that, your options will be limited to hiring independent contractors or recruiting through an Employer of Record (EOR).
What are the differences between an independent contractor and an employee?
When you hire someone to perform a task, that person can either be an employee or an independent contractor. An employee is someone who provides services to your company in exchange for a salary. An independent contractor is a worker who does a task for a predetermined fee.
A company hiring an independent contractor doesn’t need to withhold income tax or pay social security, unemployment tax, or healthcare.
Using independent contractors
Hiring an independent contractor is the quickest and cheapest way to hire remote international talent and involves the least red tape. It gives you access to a global talent pool with minimal commitment.
You sign an agreement with the person you want to hire and then send them money when the job is completed. It’s the contractor’s responsibility to adhere to local regulations.
The most significant advantage of hiring independent contractors is the lessening of regulatory burden—particularly when you’re a young startup that’s just getting off the ground.
Considering that each country has its own employment laws that can be pretty complicated, hiring an independent contractor is a much easier route than bringing an employee on board.
Legally, hiring contractors might be the easiest option. However, it's not without its disadvantages. While you might have broader access to the global talent pool, you also need to decide how much commitment you’ll be expecting from your independent contractors.
Not including them in employee stock options, healthcare, and other such packages might be considered less desirable from a job seeker’s perspective.
Employer of Record (EOR) is a third-party provider that helps enterprises employ legal, full-time workers in another country, state, or province. The primary function of an EOR is to serve as a legal entity in places you don’t have one.
Some EORs cover payroll and HR functions. By law, your employee will be working for the EOR. However, in any meaningful sense, they're working for you.
The new age of talent acquisition
If you look beyond the usual talent sources when it comes to hiring globally, utilize social media platforms, leverage team members' connections with a robust referral program, and position your startup as a company of choice, you should find your organization chock full of international talent.
However, if you choose not to do any of this, there’s still a way to fill your pipeline with the high-caliber talent you need to accelerate your startup’s growth. That’s by enlisting Hunt Club.
We’ve honed our recruiting expertise to a razor-sharp point and can take over every aspect of the recruiting process for you.
Give us a call today!