Expanding overseas is a beneficial strategy for companies of any size to stay competitive in today’s ever-evolving marketplace. New markets can mean new consumer bases that are eager to try out products or services that may not be available otherwise—until a company like yours enters the country.
However, with global expansion comes the need to hire internationally. This can bring potential risks that may not be present when hiring in your home country. Businesses must understand the challenges of global hiring to ensure they have a solid risk mitigation strategy in place.
In this post, we review five tips for risk assessment and mitigation during the global hiring process.
1. Have a Risk Mitigation Strategy in Place
It should go without saying that it’s better to have a plan before you encounter a problem. When issues arise, it’s often too late to create a long-term strategy as you’re working to solve it. When you have to make quick decisions without a lot of information, you risk making legal problems worse.
In their systems engineering guide, MITRE, suggests these four steps in developing your risk mitigation strategy:
- Risk identification
- Risk impact assessment
- Risk prioritization analysis
- Planning, implementation, and progress monitoring
The only way to understand your potential risks and mitigate against them is to have a plan before something goes wrong.
2. Audit Compliance Practices Regularly
Developing a risk mitigation strategy sometimes isn’t enough. Ensure that your human resources department follows compliance practices, as well as your risk mitigation strategy. The best plans only work if they are followed.
Conduct a regular human resources audit to inspect your compliance and HR practices. Generally, an audit will cover two areas:
- Your policies, processes, and practices
- Key HR indicators such as turnover, absenteeism rates, and time it takes to fill a position
A human resources audit can help to ensure that your well-crafted policies are implemented. It also gives your legal team permission to examine whether these policies are adequate protection for the company.
3. Protect Your Intellectual Property
Intellectual property may be the most important asset a company owns. Therefore, it’s vital for your risk mitigation process to encompass IP protections. The most important piece of IP protection is making sure that the appropriate papers have been filed with trademark and patent offices in the countries in which you do business. A patent or trademark in one country will not protect your property in another.
This risk can be especially difficult with independent contractors. Contractors may be tempting to hire, because they often come with lower cost and without the heavy labor protections many countries impose. Contractors do, however, retain intellectual property rights for the work they produce.
4. Specify Probationary Periods in Employment Contracts
Taking on new employees is always a risk. In countries where employment law offers heavy protections for employees, the risk is even higher.
Therefore, your employment contracts should include a probation period. Additionally, it is best practice to have the contract specify exactly how long the probationary period lasts. Many countries limit by statute how long a probation period lasts. For example, this overview of German labor law shows a maximum probation period of six months.
5. Use Local Experts To Help
There are many opportunities in a global marketplace. But managing complex legal environments in multiple countries can make it difficult to ensure compliance and mitigate legal risks in global hiring.
Working with an experienced partner can help guide you through each new country’s local regulations. A service like International PEO (Professional Employer Organization) can help you navigate the complexities that arise during global expansion and assist with compliance management. It also provides your team with the infrastructure to hire employees overseas quickly and easily without setting up a foreign entity. To learn more about the benefits of working with an expansion partner, contact our team today.