While the number of foreign-born laborers in the United States has increased steadily, 16.5 percent in 2014 versus 14.8 percent in 2005, the opportunity to hire outside the United States has also increased. What are some important considerations for employers when they hire outside of the United States?
Hiring overseas has its own set of legal implications for American employers that involve federal law and those specific to European countries. One consideration for U.S. employers is to be mindful of following Federal Law. With laws including the Foreign Corrupt Practices Act of 1977, companies should look into developing policies for global employees that prohibit them from giving foreign government officials unauthorized financial compensation in exchange for new or continued business contracts.
Another consideration focuses on how employment agreements are viewed by foreign countries. Unlike the United States, where many employment relationships are often at-will, some European countries require employers to provide employees with a termination notice and/or a notice period depending on their length of employment.
Understanding Cultural Differences
Beyond legal implications when hiring overseas, understanding cultural differences is another important consideration, even when contemplating firing. When it comes to performance reviews, one example is the difference in how American and European supervisors carry out employee assessments.
European, specifically French business owners and their supervisors, normally provide employees with feedback that is straight-forward, emphasizing areas needing improvement but not talking about job aspects that are done well. However, American supervisors give subtler feedback. Managers in the United States are more inclined to highlight an employee’s positive job performance and provide them with constructive feedback to encourage growth in areas where they have weak performance.
Another example to be cognizant of when hiring overseas is the different approach to time, specifically punctuality. Generally speaking, northern European countries, especially Germany, the United Kingdom and the Nordic counties, have cultural norms that subscribe to what experts call linear time. This cultural expectation, which is often present in economies with more industrialization, assumes more punctuality and promptness for appointments and work schedules. It’s naturally necessitated because factories must run in a more sequential manner.
In other areas of the world, such as Latin America, the Middle East and many parts of Asia, employers and employees are accustomed to flexible time. Schedules and appointments are generally understood to be more flexible and do not always occur when they were originally intended.
There are other legal and cultural considerations employers should be mindful of that can have a collective impact on international expansion. For example, when selecting international employees for time-sensitive projects, consider country-specific holidays and time-zone differences. Moreover, European and Australian employees are accustomed to receiving more time off for vacations, sickness and family planning reasons. You also need to consider ancillary legal factors such as approval requirements by labor unions for changes to work policies or conditions. While non-compete agreements are prevalent in the United States, many international companies look less favorably on these, and may not permit them at all.
As the world’s economy is becoming more interconnected, businesses that understand different cultures will face fewer hurdles when hiring new talent from outside the United States.