All efficient processes run smoothly, reducing burdens on business leaders by leaving them with clear minds to focus on strategy. Managing the complexities of HR compliance can put a kink in these processes if your team lacks international experience. Companies strive for standardization across borders. You want your headquarter’s operations to align with your international operations. A superb global HR pro understands that flexibility is a key to success.
To succeed in a new market, your team needs to understand the HR compliance requirements established by each country. We’ve put together HR compliance tips for international employers to help their business prepare for expansion.
Mandatory Withholdings for International Employees
Foreign countries require employers to provide employees with a number of entitlements including pensions, paid time off, sick days, maternity leave, and 13th-month pay. Many of our clients state that the number one burden they face in an overseas expansion is managing HR compliance. It’s smart for small to midsize firms to consider teaming up with a service to help manage these complicated responsibilities.
For example, Foreign Subsidiary as a Service (FSaaS) takes the guesswork out of international HR compliance by getting companies fully operational in target countries. Third-party EOR services prevent constraints associated with setting up a subsidiary, which saves your company time and money. Plus, your international employee regulations are managed by an experienced team giving you the freedom and flexibility to focus on your business’ strategy and continued growth.
To understand the complexities of HR compliance overseas, let’s take a moment to look at Singapore’s labor laws. Employers are required to provide paid time off for a list of national holidays, occasional bonuses, and pension withholdings. Plus, company’s must abide by weekly work restrictions, breaks, and termination restrictions. In most foreign countries, “at will” employment doesn’t exist. As a result, you need a just cause, which varies in each country, to terminate an employee. Consult your attorney or an in-country expert to learn more about these restrictions.
HR Compliance Requires Flexibility
For a company to perform at its highest level, its HR team, whether internal or external, needs to align with the business. It’s particularly the case as technology becomes more innovative and priorities change. According to Forbes, 85% of global companies believe that HR must undergo a transformation in order to adequately address emerging business priorities.
By letting go of transactional processes and staying flexible, global HR teams can improve results and address real problems that face company’s overseas.
One of the most effective ways to tap into HR resources during an international expansion is analyzing people analytics. These teams have access to real data that can transform the way businesses attract talent. Your company can use this information to guide organizational decisions and growth strategies.
Learn & Adapt to Culture Differences
When entering a new country, you will need to adapt to the culture naturally. This includes, but is not limited to, language barriers, dress codes, greetings, and traditions. These cultural differences become especially difficult for international HR management.
For example, many countries require employers to provide an employment agreement in both English and the local language. Also, in Brazil, it’s customary to make appointments at least two weeks in advance. Impromptu calls to business or government offices is considered bad practice and should be avoided. Learn about customs and best practices from an in-country partner whom you trust to give you proper guidance throughout your company’s international expansion.
Automating HR Compliance
If you’re like many business leaders, you will choose to outsource your HR compliance responsibilities to a third-party service. Options like International Professional Employer Organization (PEO) manages all of the admin tasks associated with hiring, paying, and firing international employees.
A PEO can accomplish these tasks by hiring your company’s employees, thus becoming the team member’s employer of record for tax and insurance purposes. Essentially, it removes the risks from your team and still allows you to manage daily activities.
We recently co-produced a webinar highlighting the top 4 things every global HR professional should do in 2017, check out the recording here.
If you would like to discuss your international operations with one of our consultants, give us a call anytime! +1 (303) 309-2894.