Part 3 of Growing Your Business Internationally: Staffing Your Overseas Business
Welcome to part three of our guide to growing your business internationally. In this edition, we’ll discuss the options you’ll face when staffing your overseas venture.
Once you’ve decided to grow your business internationally, but before you get too set on the distribution channel strategy you’ve selected, it’s time to consider your staffing requirements.
The Hiring and Distribution Connection
The distribution channel you choose is going to have an impact on the kind of hiring decisions you have to make. You should consider the employment implications when you are choosing your distribution channel strategy.
If you are responsible for locating, vetting, and hiring new employees then there are a variety of costs; recruitment and interviewing, legal obligations, wages, taxes, benefits – and the layers of assistance you may need to navigate these systems.
In fact, the costs involved may start to impact the economic viability of your chosen distribution strategy. (Sigh, just when you thought the hard decisions were done with!)
However, if you elect to use agents it’s not as simple as just partnering with existing people on the ground. Dependent on the terms of your Agent partnership or Joint Venture you may still need to be involved with the hiring of employees – certainly you will need to identify what skills are required to do the job.
One way to cover all your bases is to consider providing training for any intermediaries you are using; agencies, distributors, retailers and wholesalers may all benefit from any training or support you can give frontline staff closing sales and/or managing customer service.
Skilled vs. Unskilled
One of the biggest challenges when it comes to staffing your overseas venture is the skill requirement. This may be problematic because the definition of skilled vs. unskilled may vary from one country to the next.
The skills you expect unskilled labourers to have in Britain – often to high-school level and even high school diploma – are different than the skills you should expect from less developed nations. And unfortunately research shows that while the need for highly skilled labour is increasing globally, there is simply an increasing gap between the necessary jobs skills and the skills workers actually have.
For example the gap between jobs requiring workers with digital skills, and the available workers with digital skills, is widening. The digital skills gap is going to be even wider in a region where education levels and access to technology is lower.
You should never mistake figuring low-cost local labour into your business plans without understanding that sometimes this comes at a higher cost overall.
The best way to get to grips with this is:
– Work directly with the current UK employees who hold the positions you wish to fill in other countries: What is their skill level? Can their role be broken down into a checklist and anyone trained in that role? Even if they are not literate enough to read detailed process manuals? If not, what parts of the job could be automated or will require a specific skill set?
– Plan to provide detailed training for all new employees: This avoids the mistake of ‘presuming knowledge’ that new hires should have in an unfamiliar market.
– Hire skilled workers as consultants instead of regular employees: If you do require skilled workers consider this solution as a cost-effective bridge between hiring skilled workers full-time. It can also assist in raising the overall skill level of your local team.
– Consider short or long term staff transfers: One of the best ways to get your new staff up and running might be to provide someone from your UK operation locally. Many mid-level staff members, particularly those without family commitments, may be keen to develop their career in a new office and see it as an adventure to live and work overseas while maintaining the same job. Although expensive and time-consuming to get local work visas and pay relocation cost this could avoid a more costly staffing problem in the long term.
Complications in Labour Relations
Encountering cultural confusion with your customers isn’t your only worry when it comes to working overseas. You will also encounter cultural, legal, and etiquette differences in each of the different countries. As always, these differences have can a financial impact on your cost of doing business.
Even among countries where you don’t foresee differences – such as within Europe or in overseas countries where English is also spoken as a first language – some of the differences in the ways that people work can be subtle but impactful.
For example, in France most people say that it is against the law to eat lunch at your desk. Whether this is true or anecdotal [we couldn’t find anything official on this – does anyone know for sure?] staff certainly have an expectation at lunch that they will be allowed to leave for at least an hour (in some cases up to two hours) and the company should provide a place to eat lunch if they want to bring food from home or a takeaway.
A simple solution, if hiring staff, is to always work with a local agency to help you navigate cultural and legal pitfalls (remember even individual country laws on what sort of questions you can ask in interviews will vary).
Working hours, leave, and even lunch times are all dictated by law and can be navigated. But there is one cultural difference that may not exist officially but could make or break your business; corruption.
In some cultures ‘bribes’ are considered a normal cost of doing business. Even if you are working through third-parties, you are you are potentially liable for the corrupt actions they take on behalf of your business. (Under the Bribery Act, for example, you may be held legally liable for bribes paid by or through a third party).
So, you need to keep a careful watch in all your overseas business, but especially in cultures where bribes are considered a normal cost of doing business.
Overall, this emphasizes the importance of due diligence on your part, regardless of how you obtain workers for your venture. Remember, your business reputation is on the line even if you never meet your employees or your consultants, so take care to ensure the workers you hire to staff your overseas venture are people you can trust with your reputation.
You can read part two here.