By Globalization PartnersMarch 2021
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Staffing decisions are a major aspect of any company expansion strategy. Whether you’re establishing a new office, retail store, research and development (R&D) center, manufacturing facility, distribution center, or any other type of business presence, you need the right personnel to grow successfully.
You may also want to hire international remote workers. In LinkedIn’s 2019 Global Talent Trends survey, 72 percent of talent professionals emphasized work flexibility as critical to the future of HR and recruiting. For some companies, this flexibility comes in the form of a remote-first work model. As remote work becomes increasingly popular, especially in the aftermath of the global pandemic, hiring managers will naturally wonder why they’re limiting themselves to their local talent pool. Why not expand into other markets to find top talent in your field?
We’re going to discuss some crucial aspects of global staffing and which positions you should consider filling with international professionals.
How to hire international managers
Leadership positions are especially critical to ensuring a successful international expansion. You need the right international overseas management to help your new employees come together, especially if you’re assembling a team for your new branch or subsidiary. Companies should carefully consider whether it makes more sense to transfer managers from headquarters to their new location, hire new managers in the country, or a combination of both.
Some companies choose to relocate leaders from their headquarters because they are already immersed in the company culture and can help create that same culture in the new location. Having a shared culture across locations can help to unite your international teams. As the Harvard Business Review notes, a company’s culture and leadership are inextricably linked. Leaders set the tone and shape the culture, both consciously and unconsciously through their actions.
Company culture is critical to employee satisfaction and your success overall. In a 2019 survey from Glassdoor, 56 percent of the 5,000 participants from the U.S., UK, France, and Germany said company culture was a more significant factor in determining their job satisfaction than salary. More than three-quarters of participants said they considered a company’s culture before they would apply to work for the company.
There are also some reasons to consider hiring industry professionals in the country rather than transferring managers from your headquarters. Local leaders might relate better to employees hired within the country and may better understand the local market conditions.
A study of European subsidiaries found that subsidiaries led by home country nationals are more deeply embedded in the external environment. These subsidiaries also tend to function more autonomously, with managers making strategic decisions based on local market issues. The study concluded that subsidiaries led by home country nationals perform better, on average, than those led by parent company nationals when it comes to sales growth by value, productivity, and innovation. However, the researchers noted that some other studies have produced conflicting results.
Since there are apparent benefits to both transferring managers from your headquarters and hiring new managers from the country where you’re establishing operations, some companies choose to combine these options. For example, you may want to start with managers from your headquarters to help get a new location off the ground and establish the company culture. Once the office has become fully functional, you may want to hand off management responsibilities to a local team member who is prepared to assume these responsibilities.
Staffing decisions in an international branch vs. a subsidiary
When you start hiring, you’ll need to consider your staffing needs, which are likely to differ depending on whether you have a branch or a subsidiary in the country. If you’re still deciding between these two options, learn about the differences between these two types of entities.
Since branch offices are tied more closely to the parent company, you may not need to replicate all the same positions in your headquarters in the branch office. For example, big-picture oversight roles, like a chief financial officer (CFO), can consider the operations across your company headquarters and international branches. On the other hand, roles that require a greater focus on daily operations should be filled separately.
Subsidiaries function more independently from the parent company, so if you’ve established a subsidiary, you can staff it similarly to how you would staff a new startup, depending on how much autonomy you want the subsidiary to have. Just be sure you adapt existing managers’ roles or add new positions if needed to help strategically connect your headquarters and subsidiary.
Key positions needed when expanding into a new market
Determining who to hire during your global expansion will depend in large part on your company and industry. However, there are some key positions that most companies include in their staff. Especially if you’re forming a subsidiary as opposed to a branch, you may need to hire the following professionals to help make your expansion successful:
- Financial expert: Some companies choose to outsource financial services for their international locations since every country has its own economic and legal factors that influence financial operations. Some companies may prefer to hire their own financial experts who are highly familiar with the local business and tax laws and can handle financial matters in-house.
- Technology professional: You may also need tech professionals to help with R&D, information technology (IT), or other technology needs. Technology professionals are especially critical within tech and software companies, but in today’s marketplace, nearly every company has technology needs in some form.
- Marketing specialist: When you enter a new market, you need a marketing expert or marketing team that can help you break into this new market. A local marketing specialist may have a better grasp on the market you’re trying to appeal to. Whether you need to raise brand awareness or convert interested consumers, the right marketing specialist could be the difference between failure and success.
- Sales representatives: A strong sales department is vital for many companies. A lead salesperson or sales manager concentrates on lead generation so you can reach new customers. Hiring a salesperson from the country can be helpful, especially for B2B companies, since this sales rep can leverage personal connections in the country to make in-roads for your company.
- Product manager: Product managers are responsible for strategy and vision related to your product. They work in tandem with R&D and marketing teams to develop a product and sell it. You may not need a product manager if you are handling all aspects of product development at your headquarters.
- Customer service representatives: A crucial department for any company is customer support. Hire at least one customer service representative to ensure customers in the country have a helpful and enthusiastic brand ambassador to correspond within their native language. A customer service rep can also work with the product manager to develop products based on customer feedback.
- Human resources staff: Human resources (HR) staff are necessary in ensuring a successful hiring and onboarding process. They manage payroll and employee benefits and carry out other vital tasks related to your employees. Generally, your headquarters’ HR team should refrain from trying to manage your subsidiary’s HR responsibilities remotely, as there will be major differences from country to country.
Recruiting international remote workers to join your team
The interconnectedness we enjoy in many parts of the world today has opened up new possibilities for working arrangements. As of 2017, 54.3 percent of employees globally worked remotely at least 2.5 days per week. In many countries, the global pandemic has increased the emphasis on remote work. Health concerns aside, remote work has some real advantages. For employers, hiring fully remote workers means you are no longer limited by location. You can hire top talent in other countries and have those individuals work independently to support your company.
Here are some top roles that companies look for when they can’t find the talent in their home market:
- Writers and translators: Communications professionals, such as technical writers, content writers, and translators, can often work independently to create and edit content for companies. An international writer or translator can be a real asset, especially if you’re looking to create content for an audience in another country or a different group of language speakers.
- Marketers: Global companies can hire marketing professionals, including content specialists, advertising managers, and social media strategists from various countries. Marketers from other countries can serve as an extension of your existing marketing team and provide insight on how to effectively reach consumer bases in other markets.
- Customer support staff: Customer support staff who answer phone calls and emails or chat online with customers don’t need to be in a call center in most cases to do their job. In fact, working remotely can be preferable since home offices may afford a quieter environment for communicating with customers. Hiring international employees from various countries for customer support allows companies to maintain a 24/7 customer support line to accommodate different time zones.
- Data specialists: Data is a vital part of nearly any business. Data entry operators and analysts can help businesses track inventory, assess sales analytics, and handle other critical tasks. Since this type of work is primarily done independently, it’s a good fit for remote work. Broadening your search to other countries will help you find data specialists with the credentials you’re looking for, especially if you’re struggling to find qualified candidates in your own country.
- Web developers: Web developers’ daily responsibilities are inherently tied to the internet, so many of these professionals can do their jobs from laptops in their homes or remote offices. You can hire remote web developers to fulfill a long-term role with your company or as a means of outsourcing certain tasks and projects temporarily.
- Administrative and executive assistants: For administrative or executive assistants who do not also serve as receptionists, remote work is an excellent option. An executive or administrative assistant can use their own remote workstation to schedule appointments, make travel arrangements, compose memos, and more.
How to hire international employees
International recruitment methods differ depending on the country where you’re recruiting. In many countries, workers are used to looking for job ads online, so employers should find the best sites to publish their ads. International job aggregators and the global networking platform LinkedIn are popular in many countries but not all. Search the Globalization Partners blog to find a hiring guide for the country you’re interested in hiring in, or find other resources that explain how to find international employees in particular countries.
Some companies choose to partner with hiring agencies in the country to simplify the recruitment process, while others prefer to exercise more control over the process. Regardless of your recruitment method, when you find the right candidates, you have three main options for hiring international employees:
1. Establish an entity in the country
If you establish a branch or subsidiary of your business in the country, you can legally hire employees there. The process of incorporating and registering your business in a new country can be complicated, expensive, and time-consuming, so this is only the right choice when you want to establish a physical business location and employ people there indefinitely. Setting up an entity is usually not a strategic choice if you merely want to hire remote workers or conduct temporary business operations internationally.
2. Hire workers as independent contractors
Some companies choose to avoid an employer-employee relationship altogether by hiring international workers as independent contractors. Before deciding on this option, companies must understand what truly makes someone a contractor as opposed to an employee. Each country has its own legal definition, but generally, contractors are hired for temporary projects, and they can work for other clients in addition to your company. Since contractors are not employees, you do not need to have them on your payroll, offer them benefits, or fulfill other legal labor requirements that you would have to fulfill for full-time employees.
It’s essential you’re taking steps to ensure you aren’t misclassifying an employee as a contractor. This is especially easy to do in countries like China that have broader definitions of what constitutes an employee and narrower definitions for what constitutes a contractor. If authorities determine your contractor should really be an employee, you could find yourself owing taxes, benefits, and additional backpay.
3. Use an Employer of Record solution
A third option that is best for many companies is to partner with an Employer of Record (EOR). An EOR takes on the legal role of the employer for your employees, including responsibilities related to legal compliance and HR tasks like managing time-off policies and payroll.
Hiring global employees is made much simpler when you partner with an EOR. Because the EOR has an entity in the country, you can start hiring top talent quickly and easily. You choose the employees you want to hire, the EOR legally employs them, and they perform day-to-day responsibilities for your company.
Start hiring in countries all over the world with Globalization Partners
Globalization Partners is a trusted EOR in 187 countries across the world. When you work with Globalization Partners, you can rest assured that your international employees are receiving all the benefits they are entitled to under local laws. You can also stop worrying about the risk of legal noncompliance or employment classification. Learn more about our EOR solution to determine whether this is the right fit for your expansion strategy.