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Talent Acquisition
TAPPING T A L E N T S
AROUNDTHE
GLOBE Your map to landing the best candidates abroad.
By Stephenie Overm an
Larry Harding has seen what can happen when companies wade into unfamiliar territory when recruiting overseas, f In one case, administrators at a large U.S. university hired local employees as independent contractors to manage study abroad programs in a Euro pean Union country. Unfortunately, the university didn’t consider the implications of employment regulations there that define what constitutes an employee vs. an indepen dent contractor. The institution was sued and forced to pay a settlement of $500,000 in back taxes and damages for improper worker classification, 'll As executive
director at global consultancy Radius, Harding has heard plenty of similar horror stories—and he will likely encounter many more as U.S. companies
continue to expand their reach across the globe. Unfortunately, wing ing it just won’t work when hiring overseas. A U.S.-centric organi
zation needs to know not only how to decipher foreign laws and tax codes but also how to tailor its recruitment
strategy for different geographies and sell its brand to local talent. >
February 2016 HR Magazine 47
Talent Acquisition
The Rising Cost of Global Talent D on't assume you'll save money by swooping into a new market to
scoop up talent. In fact, the shortage o f skilled labor in various regions
of the w orld has pushed w ages up to levels that som etim es exceed those in the U.S., says Lilac Nachum, an international business pro fessor at Baruch College at the City University of N ew York.
"The pay levels fo r top managerial positions in Sao Paulo are
higher than in N ew York and London," she says. "Engineers in Russia
earn more than their counterparts in Silicon Valley."
Moreover, finding experienced executives in Europe and Asia can
also come w ith a big price tag, says Alex Khatuntsev, w h o w orks for
Actelion Pharmaceuticals Ltd., a Swiss company. Such individuals are
accustomed to being very well-com pensated in their home markets.
W ith labor costs rising steeply, U.S. companies should have a backup plan to target specific regions, says Kevin O'Marah, chief con
te n t officer at SCM World. "Vietnam is very popular— the costs are low. Indonesia and Malaysia are also im portant markets."
M an y U.S. org an izatio n s are ta k in g a more strategic approach to finding overseas talent because they are seeing th a t job seekers no lon ger flock to them. Gone are the days when U.S. companies were considered the m ost desirable employers in the world and thus had their pick of the best available talent anywhere.
T h a t’s w hy it’s im perative for em ployers to globalize their talen t acquisition strategies along w ith other aspects of the business.
Lilac N achum , an in tern atio n al business professor a t Baruch College at the City Univer sity of N ew York, says she frequently hears from U.S. executives th a t hiring people in another location has become a m ajor challenge. “M any refer to it as their biggest challenge,” she says.
The time to start planning is long before the first global recruitm ent efforts tak e place. A company should begin thinking about a global talent acquisition strategy as soon as it knows it w ants to move into a foreign m arket, advises A lexandra Levit, au th o r of Success for Hire: Simple Strategies to Find and Keep Outstanding Employees (ASTD Press, 2008). H R professionals can play a lead role in developing th a t strategy, perhaps in collabo ration w ith global consultants, academics, industry experts, and government and local authorities.
To get a sense of the unique recruiting challenges a company may face in different places, follow H R Magazine on a quick trip around the world.
Expanding To Europe M a n y U .S .- b a s e d c o m p a n ie s fa il to fu lly g ra sp how d ifferen t rec ru itm en t can be in other p arts of the w orld, says Alex K h a tu n t sev, an H R d irecto r a t bio- p h a rm a c e u tic a l co m p an y A ctelion P h arm ac eu tica ls Ltd. in Z u rich an d a c e rti fied professional coach. He cites several key differences b e t w e e n d o m e s t i c a n d E u ro p e an ta le n t m a rk e ts, including the following: • The concept of “employ m e n t a t w ill,” a co m m o n U .S. te rm t h a t m e a n s an employee can be dismissed fro m a c o m p a n y fo r an y
reason and w ithout w arning, does not exist in European employ m ent law. Unless “just cause” can be established, it is difficult to discharge employees in Europe w ithout incurring substantial liability. • E uropean com panies are accustom ed to asking— an d can d i dates generally are com fortable answ ering— personal questions th a t w ould be ill-advised in the U.S., such as w hether the c andi date has children or holds certain political or religious beliefs. • Any assessm ent in stru m en ts such as p erso n ality tests m ust be thoroughly validated in the U.S. due to concerns ab o u t p o s
sible bias, w hile such tests are n o t subject to the same requirem ents in Europe.
A n o th e r ch allen g e in E u ro p e a n d else w h e re : A co m p an y th a t is well- k n o w n in th e U n ite d S tates m ay n o t have th e same brand recognition in an o th er country, says O li ver Schiltz, a Zurich-based p rin c ip a l w ith executive se arch firm H e id ric k & Struggles.
F o r e x a m p le , it m ay m ake business sense for a U.S. b io tech co rp o ra tio n to expand to Switzerland, w hich is a hotbed for b io tech em ployers, b u t th a t d o esn ’t m ean job seekers
Top Sources of Quality Hires j Search and staffing firm s
Social professional netw orks
4 6 % 4 9 %
51% 5 2 %
3 6 %
2 7 % 2 5 %
14% 16% 20%
+1 o United States Canada Brazil Spain Mexico
Source: 2015 G lo ba l R e cru itin g Trends, Linkedln.
4 8 HR Magazine F e b ru ary 2016
there will be interested in applying for work. Even American com panies th a t have a great product, career development o p p o rtu n i ties and com petitive salaries may struggle to com pete for talent against m any sim ilar organizations th a t locals are more fam iliar w ith. “T he good people have options,” Schiltz says.
C onsultants such as Schiltz can help employers to both build their brand abroad as well as search for m ultinational employees. “We can be the door-opener for U.S. com panies” moving into a new area, he says.
Before a search takes place, he w orks w ith the client com pany to weigh the hiring implications of its location decisions. Typical questions th a t often arise: W h a t does it mean to move into Swit zerland? W h a t is the health system like? H ow are the schools? “ I can answ er these questions,” Schiltz says. “ Someone from Bos ton o r San Francisco can ’t.”
For example, he advised an American business against locat ing a regional hub in the Swiss m o u n tain s. “It may be a b etter ta x deal, b u t nob o d y w ill com e w ork for you,” he told the client. “You need to be close to cities.”
Frank Sprague learned about global ta len t acquisition challenges th e h ard way. W hile w orking in the N etherlands as senior technical recruiter for educa- tional-tech com pany B lackboard Inc., he co u ld n ’t u n d erstan d why he w asn’t gettin g any response to a job posting. Eventually, he learned th a t D utch can d id a te s e x p e c t to be h ire d th r o u g h agencies, so he fo u n d an experienced staffing com pany to p artn e r with.
In the Czech Republic, on the other h and, recruiting relies heavily on refer rals because hiring decisions are more relationship-based, Sprague says.
W h a t a ttr a c ts to p c a n d id a te s in E urope is a co m b in atio n o f generous benefits, flexibility in term s o f w ork time and location, signing bonuses, and solid long-term incentives, according to Khatuntsev. Offering a high level of vis ibility and a sense th a t a position will have a strong im pact w ith in the co m pany also matters.
W ithout the proper guidance, a U.S. employer operating abroad may never know why a job offer alienated a poten tial hire. Salespeople in G erm any, for exam ple, expect to receive a car allow ance o r to be provided w ith a vehicle, Sprague says. If th a t isn’t offered, “the
What attracts top candidates in Europe is a combination of generous benefits, flexibility in terms of work time and location, signing bonuses, and solid long-term incentives.
p erson is n o t going to provide you w ith feedback. T h ey ’re just going to scratch their head and w alk away.”
Going Abroad to Asia A Harvard Business Review survey o f ab o u t 3 0 0 ,0 0 0 employ ees in C h in a found th a t, from 2 0 0 7 to 2010, the perception of Western companies as being the m ost desired employers to work for fell by half. “Anecdotal evidence suggests th a t the advantage
has fu rth e r dim inished since th e n ,” N ac h u m says. “ Sim ilar challenges were also reported in India.”
A striking exam ple has been the loss of employees a t tech g ian t IBM to leading local softw are businesses, notably Infosys in In d ia. “As local com panies develop, they offer career o p p o rtu n ities th a t m atch an d may even exceed those o f foreign com pa nies,” N achum says.
In C h in a , th e key to a ttra c tin g to p talent lies in establishing strong personal connections. “ Senior lead ers look to their personal n etw orks,” Sprague says. “We were able to sta rt o u r office in S hanghai because of a rela tio n sh ip w ith som eone w ho is local. T h a t person has b ro u g h t in a lot of new hires.”
W hile U.S. tech com panies gen erally find it easy to re c ru it entry- and midlevel employees in India and C h in a, filling higher-level positions is m ore difficult, says V inay Singh, executive vice p resid en t o f h u m an resources a t V ulcan M anagem ent.
H e re c o m m e n d s se e k in g c a n d id ates w ho have been w o rk in g in th e U n ite d S tate s a n d w h o w a n t to r e tu r n to th e ir h o m e c o u n try . “ Y ou’ll have th e c o m b in a tio n o f som eone w ho is a local leader, w ho k n o w s th e la n g u a g e a n d , a t th e
Getting Help Going Global As you get started on developing a global talent acquisition strategy, experts recommend that you: ■ Reach out to chambers of com
merce in the target country to ask for resources.
■ Find an experienced executive search firm with the help of pro fessional associations such as the Association of Executive Search and Leadership Consultants and work with groups such as the Society for Human Resource Management to exchange knowledge and network with HR leaders.
■ Connect with leading universities and business schools that main tain contacts with alumni around the world.
■ Consider retaining a global busi ness consultant and/or employ ment attorney w ho specializes in your target market.
February 2016 HR Magazine 49
Talent Acquisition
Major Job Boards Around the Globe
Job Board URL Target M a rk e t
Big4 Careers w w w .b ig 4 ca re e rs.com Finance and consulting professionals in India, Russia and other countries
Jobba.net w w w .jo b b a .n e t Japan
Laborum w w w .la b o rum .cl Latin Am erica (Spanish-language)
CareerOne w w w .careerone.com .au Australia and N ew Zealand
Job Space w w w .jobspace.co.za South Africa
Bayt w w w .b a y t.c o m M iddle East
51Job.com w w w .5 1 jo b .co m China
Indeed w w w .in d e e d .c o m Global
M onster w w w .m o n s te r.c o m Global
same tim e, w ho has A m erican know ledge an d com petencies,” Singh says.
Reaching Out In Russia and the Middle East, it is often challenging for U.S. com panies to find local C-suite-level candidates w ho have well-devel oped leadership skills and formal training, says Ken Daubenspeck, founder and president of executive search firm Daubenspeck and Associates in Chicago.
Executives in those regions may be promoted based on personal relationships with top managers instead of functional competencies, he says, and, as a result, succession-planning techniques are incon sistent compared to Western practices.
The best strategy in those cases is to draw on the expertise of other U.S. companies and local businesses to identify executives who are knowledgeable about both U.S. practices and local culture and cus toms, according to Daubenspeck.
W hile high-level IT and cybersecurity skills are in short supply in both Russia and Middle Eastern countries, some employers have successfully hired expatriates who then teach local workers the nec essary skills and functions. Offering opportunities for continuing education, as well as informal and formal mentorships, can be part of an effective global recruitment strategy.
U.S. companies moving into Africa will find that recruiting and hiring practices there can be similar to those in Western countries. Kevin O ’M arah, chief content officer for SCM World, a supply chain talent development firm, says candidates are often attracted to train ing and development opportunities.
Nigeria has emerged as a magnet for global talent, but doing busi ness there can be difficult, O ’M arah says. Nigeria is Africa’s larg est oil exporter, but companies sometimes have concerns about cor ruption and attacks by the terrorist group Boko H aram . He says employers might consider seeking workers in neighboring Ghana,
w hich also has a sophisticated business environm ent w ithout the problems pres ent in Nigeria.
Emerging m arkets in A frica tend to offer less expensive staffing alternatives th a n m any other p arts of the world. In these markets, “U.S. companies continue to enjoy an advantage over local companies in most sectors,” N achum says.
Navigating North And South America U.S. companies looking to expand north and south of the border will find Canada to be m uch like the U nited States in its recru itm en t an d hirin g processes, w ith slightly more E uropean policies, accord ing to O ’M arah.
M exico is already a critical source of workers for many U.S. companies and will become even more impor tant in the next five years due to rising labor costs in China, O ’M arah says. He recommends that U.S. companies looking to tap technical talent in Mexico set up operations where there are already pockets of infrastructure and partner with companies th at have strong ties with local markets.
Brazil, another big player in the Americas, has cultivated a work force with a high level of technical expertise, O ’M arah says, but the country is also known to have lots of regulatory red tape.
One World, Many Strategies Given all of the geographic differences, U.S. companies have much to lose by applying a blanket approach to talent acquisition. Sprague notes th a t, even w ith in th e U.S., his com pany alters its h iring approach to accommodate different localities. “One size doesn’t fit all, even in one company in one country,” he says.
And don’t forget th at employers’ work doesn’t end once they’ve made the hires they want. Surveys repeatedly show that employees in U. S. overseas operations are dissatisfied with too much centraliza tion, according to Nachum.
“High levels of headquarters control are particularly daunting for local employees in industries requiring adaptation to local m ar kets, such as consumer goods and culturally sensitive goods such as food,” she says. “The distance in the organization hierarchy between headquarters and affiliates, compounded by the geographic and cul tural distances between them, often make local talent feel th at it is deprived of any meaningful voice in the decision-making process.”
The desire to be heard: perhaps th a t’s the one thing th at unites job seekers and employees around the world. D3
Stephenie Overman is a freelance writer based in the Washington, D.C., area.
February 2016 HR Magazine 51
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