How to Solve 13th-Month Pay and Other Global Hiring Mysteries

Globalization and digital technology are making it increasingly easy to hire employees in other countries. For companies searching for new talent, crossing borders provides access to deep pools of it. It’s no wonder even small companies are choosing to go international.

Doing so, however, is not without its challenges, such as complying with the laws and cultural customs of individual countries. One mistake, and you may find yourself designated “company non grata” as you’re ushered out.

If you want to fortify your workforce with global employees, the first step is to forget everything you know about hiring. Well, maybe not everything, but you should assume nothing and learn everything you can about foreign employment practices and workplace norms. In addition to mysterious phenomena like 13th-month pay, you may encounter verbal employment contracts or the cultural inability to criticize a job candidate.

If you are willing to solve those mysteries, you and your company may thrive on the global stage. Here are a few pointers you may want to consider along the way.

Seek a Partner With Experience

The first one is that you don’t have to hire globally on your own. You may be making your initial foray into another country, but there are those who have been there a long time. Find a reputable human resources company with experience working in that country and partner up.

To hire employees in most countries, your company must establish a legal presence there. If you don’t want to do that, though, don’t worry. You can work with an employer of record, a type of global payroll provider, instead. An EOR that has established the required entities in the relevant countries can hire workers on your behalf.

Those new employees are going to need pay and benefits, and — as you may have guessed — EORs can help there, too. These companies are well-versed in the employment laws of the countries where they operate. That’s good news, as legal compliance can be a tremendous and costly barrier to successfully expanding your workforce.

These companies know things, like whether 13th-month pay — a month’s worth of extra salary — is required by law or simply a matter of custom. Either way, they’ll ensure that your company does right by your international employees. And that will keep you out of trouble, legal or otherwise.

Choose your HR partners wisely. Check references to see whether other companies like yours are happy with their performance. If you pair up with an experienced partner, you can hit that foreign ground running.

Listen to the Locals

If you were going to market a product in another country, you would conduct some market research, right? You would question people who live there about your widget to gauge potential success or failure. There’s no reason why you shouldn’t do the same if you’re interested in hiring local talent to work for you.

Before you begin recruiting, ask prospects how they were recruited and hired for their current job. Ask about their pay and benefits and about local customs related to their employment and their work-life balance. Describe your corporate culture and see how they feel about it.

You might also consider talking to a local employment attorney about common legal issues — especially if you don’t go the EOR route. For example, if the country has a workers’ compensation program, it behooves you to learn something about how it works.

After you have gathered information, draft candidate profiles for the positions you want to fill. Chances are the profile for the same position will vary from country to country. Having the profiles will also help you write corresponding job descriptions, which will also vary.

Taking the time and making the effort to talk to those who live where you want to hire requires resources. But making this investment will go a long way toward demystifying global employment. Ask the right questions, and you’ll get all the answers you need to direct you down the right path.

Educate Yourself

Your company may be venturing into a new country, but odds are, other companies are already hiring employees there. The smart move is to learn from your successful and unsuccessful predecessors. It will help you make good decisions about your global workforce.

Check to see whether your target country is one of the more than 100 nations with an American Chamber of Commerce organization. “AmChams,” as they’re called, are sanctioned by the U.S. Chamber of Commerce as well as by the country in which they are located. No matter where they’re located, an AmCham’s mission is to support U.S. business interests there.

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