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Managing HR Compliance in International Markets

By June 7, 2017 May 4th, 2019 No Comments
Managing HR Compliance in International Markets

When taking your business into the global marketplace and hiring diverse employees, you’ll need to be aware of labor laws and tax liabilities in new countries. Adapting to HR compliance is an integral part of an international expansion. For example, when you move into a new country and take team members with you, you’ll need to acquire the proper work visas to continue operations.

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International HR compliance is complex and sometimes difficult to implement, especially when trying to tackle it in-house. To empower you to overcome complications, we’ve pulled together best practices for managing compliance for your international business to get you one step further to being fully prepared for overseas expansion.

 Aligning Business Goals with HR Compliance

To start, a company’s HR team needs to align with the business goals. Alignment becomes even more important as technology becomes more innovative and priorities change. According to Forbes, 85% of global companies believe that HR departments must undergo a transformation in order to adequately address emerging business priorities. For this reason, your team must stay flexible during global expansion. Prepare your team with the proper resources such as expert support and business buy-in, but also be willing to make changes on the fly if necessary. And it all starts with making sure you’re prepared.

Researching Your Target Market

Before entering a new country, you and your team should perform ample research to ensure it’s the best fit for your organization. We recommend visiting the country in-person to get a feel for the culture. Your executive team can also begin building relationships with key partners that can contribute to your company’s overall success.

To perform at a high level, your organization needs to adapt to the culture naturally, which is only achievable with a genuine investment of time in-country. You should understand language barriers, dress codes, greetings, and traditions. These cultural differences become especially important for managing international HR compliance.

By researching the market and working with international experts that have experience with the culture, your company can build a global strategy prior to executing expansion.

Typical HR Compliance Challenges for International Employers

Your new local regulatory environment will be a key focus during expansion. HR compliance requirements are complex and ever-changing. While each country has different rules and requirements for employment, you’ll typically run into:

  • Language Barriers
  • Tax Complications
  • Unreliable Banking Systems
  • Unfamiliar Cultural Nuances
  • Time Consuming & Expensive Foreign Subsidiary Formation

It’s important to understand the changes occurring in your new country and assess the implications for your business. Keep in mind your options regarding outsourcing employment, how to keep up with changes to local labor laws, and how to maintain effective communication with employees in the country.

Work with a Partner to Help Manage HR Compliance

All of these HR compliance requirements can be easily managed with the help of a partner. Options, like an International PEO (Professional Employer Organization), manage all of the admin tasks associated with hiring, paying, and firing international employees. By hiring your employees under the Velocity Global International PEO umbrella, the PEO becomes the team member’s Employer of Record. This option allows your team to focus on day-to-day business and success, while Velocity Global focuses on managing compliance for employees.

Partner with experts in compliance and international expansion! Reach out to Velocity Global today to learn more about our International PEO solution. We can help your HR department manage compliance in new international markets for a successful global expansion.