24 May The 8 Biggest Mistakes To Avoid When Recruiting Abroad
One of the biggest concerns you will face when going abroad is hiring a team to operate locally. Here are a few tips on how to make your way.
In order to create a European innovation powerhouse, one of the most crucial necessities is to move, hire and recruit talents freely. In a pan-European ecosystem, this should not pose any difficulties. However, the national realities differ from the European narrative, thus often making it hard for young entrepreneurs to expand inside of Europe.
Luckily, we asked some labor law experts all across Europe as well as HR experts and summarized their best practice advice and mistakes to avoid!
1. How to start: the search for the best model
There are many ways you can settle in a country, from creating a sister branch up to building a whole new company.
Entrepreneurs, who are willing to expand internationally for the first time, often bump into this question: where to start? Well, with hiring your first employee! There are several ways to do it: whether you will simply have a single employee from home or have a huge flagship office. It will really depend on your original business and your development strategy in the country.
So, what should be your first steps? Our advice is to hire a country manager! He or she should have a strong network in the target country and speak the language fluently. The country manager acts as your local contact person and representative of your company. Basically, it is his or her job to research and answer all the arising questions with respect to the target country’s specifies. Good to know: One of the biggest myths when hiring employees abroad is the necessity of creating a legal entity in the target country. Tax-wise it might make sense to do so, but in terms of labor law, all you need is a contract between two parties (employer and employee).
2. “Do you speak English?”
Language is a very important factor in Europe. English might be the communication language between all countries, however, doing everything in English is an absolute No-Go!
Hiring native staff is definitely key to the success of your company. Even though you have a colleague that perfectly speaks the local language, he might not be aware of the cultural differences, the traditions or simply how to handle local administrations!
English will of course be necessary, as your internal communication language. So your team needs to master it.
3. Legal Aspects:
In an ideal system, all the European laws would be aligned, when it comes to labor law. However, this is not the case at the moment.
Even if you have a perfectly working recruitment process in your home jurisdiction, that doesn’t mean that this process will be successful or even applicable in another. Get familiar with the local specifications.
Thus, you need to at least read up on the following legal aspects of your target country:
Work permits: European citizens do not need a work permit in order to work in the EU, as stated in Article 45 TFEU. Moreover, citizens of the European Union have the right to look for a job in another EU country, reside there for that purpose and even stay there after the employment has finished, as well as enjoy equal treatment with nationals in access to employment, working conditions and all other social and tax advantage
Work contract: In most European countries, there is no compulsory form for a work contract, meaning that a work contract can also only be verbal. However, in the UK and – to nobody’s surprise – in Germany, a work contract needs to be in proper writing (an e-mail does not suffice). Nevertheless, it is highly recommended to have a written down employment contract. Have in mind that in Spain, Belgium and France the contract language must be the native language!
Trial and Termination Period: Trial and Termination Periods across Europe may differ greatly. Some countries, such as Germany, offer a lot of protection to employees, resulting in strict and regulated termination laws. Other countries are more liberal resulting in longer trial periods or easier ways to end a working contract, such as is the practice in Switzerland.
Those are the main points, however, be careful with all the remaining legal aspects of your work contract since it depends a lot on the country you are in.
4. Do your homework!
A job market analysis is an absolute must! There are many important aspects to consider, here is a non-exhaustive list:
- employment rate in your industry and per type job types
- salary levels per position (you might be surprised! Salaries in Munich are much higher than in Paris for instance),
- educational system: identify the leading schools and universities to better understand the candidates’ background
- cultural differences in work and management
- job titles: get familiar with job titles and positions in your target country as the local terminology might differ
- local recruiting platforms
- salary packages: do you advertise on gross or net salary; how many holidays are usually included?…
5. Communication and branding are key!
Communication should always occur in the country’s language. Not only is this polite but also shows commitment and interest in the target country.
Even if you are well known and established in your home country, it might be the case that in your target country nobody has heard of you. Successful companies usually make the mistake to think that they will be attractive abroad, where actually nobody has heard of them. So, make sure to get a reputation and be attractive.
To do so, you can for instance be present at fairs and events in your industry to make your company as visible as possible.
Also have a strong brand image and values and make sure they adapt to the local market.
6. Network
It can be tedious, but you have to network. You never know what kind of opportunities or contacts might arise out of it. Contact the local chambers of commerce and business clubs. Join clubs in your industry and make yourself known. It is also a way to communicate about your company.
Of course, feel free to tap into the European Champions Alliance network! We are always happy to put people in contact and share resources.
Also, you do not have to reinvent the wheel. Try to get in touch with your home country entrepreneurs who settled in your target country and ask them for their best practice and advice.
7. Remote work
Ever since the Covid-19 Epidemy, remote work has become a standard everywhere in Europe. However, it does not fit all kinds of positions. Jobs in the tech industry are, for example, more suited to it than sales or management positions.
Also, country-wise there are differences to be respected as an employer. You should check if the employee is entitled to remote work or if he has the right of having an office.
In some countries, the employer has to compensate the employee for the costs that emerge from working from home (i.e., electricity, internet, utilities). In Germany, these costs amount to ca. 50€ per month.
8. Getting external help will actually SAVE you money
Do not try to do everything on your own. It will take time, energy, and money for probably little results. Instead, lawyers, recruiters, and specialized consultants are here to help you, at a cost of course. But you will soon realize that they will make you save money by working much more efficiently than you and getting better results, or providing you their expert tips.
Written by: Evelin Katharina Pana / katharina.pana@european-champions.org