How to Hire Locally

Recruiting for a startup overseas is getting easier as some familiar providers expand their services.

July 1, 1998
Recruiting that first group of local employees for your overseas operation is no small task. Lance Richards knows. “In the startup phase you’re creating a culture,” he says. “You’re building the business. And in some cases like mine, you literally walk into an empty hotel room, turn the lights on and say, ‘Hmmm. Where do you go buy stuff?’”

Richards, now based in Irving, Texas, helped GTE staff 1,400 positions in new locations in 16 cities of China. Whether your recruiting responsibilities are similar or on a smaller scale, the process can be daunting. Fortunately, there are a growing number of resources out there. International search firms, online job boards and contingent staffing companies offer a wide range of services that will help you build a competitive international workforce.

Executive recruiters span the globe.
Several recruiting firms have formed strategic alliances with local search firms around the world. Others have been undergoing the global expansion process just like your business: acquiring local companies or starting up operations in foreign markets. In either case you benefit by tapping into the networks they have been working to build.

MRI is one example. Vince Webb, vice president of international marketing in Cleveland, Ohio, says, “IBM knows how to hire people in France. Many small software companies, however, have never done this before. They were working with us to find talented people here in the U.S., and it was just a natural evolution for us to say, ‘Well, gee, instead of referring them to competitors, can we help them ourselves?’” So MRI formed partnerships with like organizations in Europe and Asia. Now its clients can work with the U.S.-based recruiting firm they’re familiar with and count on it to coordinate searches with overseas companies.

This indirect connection to an established search firm in the location gives you the advantage of having a partner that understands the local customs. Karen Bloomfield, manager of field office marketing for MRI, says, “Many countries have very different employment laws than we have. And there’s a lot of cultural differences that affect your ability to hire in those countries.” She adds, “In China, for example, where there’s a great candidate shortage, that’s extremely important. You can lose viable candidates easily by not knowing the right way to approach them.”

Running into legal difficulties might be the worst case scenario, but obviously another costly problem is hiring the wrong person. And when you have zero experience with a particular culture, a service provider that has been working in the environment for several years can help you guard against this mistake.

Kerry Moynihan, Tysons Corner, Virginia-based vice president of Korn/Ferry International’s advanced technology practice, says this is especially important when hiring local nationals in emerging markets where the talent pool isn’t as well developed as here in the States. “A common error Americans make -- we’ve seen it in our own hiring as we’ve opened offices -- is we think that just because people speak five or six languages and have a doctorate in a technical discipline such as engineering, then they’re brilliant. But that doesn’t mean they really get it when it comes to business because they just don’t have the training. They don’t have the background.” Coming from a different culture, they aren’t automatically going to understand the ins and outs of Western business practices.

Something else to keep in mind: Looks can be deceiving, because perception is based on cultural biases. Moynihan explains, “Americans want to get things done quickly. They parachute somebody in and get him or her set up. Then if that person is choosing a local [executive], they choose somebody who has nice manners, speaks English well and with whom he or she is immediately comfortable. That usually isn’t the best person for the local marketplace. It may be the guy in the corner who doesn’t look as good and only speaks Arabic or Russian or Czech.” After one or two false starts, the hiring manager learns the lesson. But with a local partner you may have a better chance of making the right choice in the beginning.

Sometimes a service provider or other local contact can warn you that a local hire may not be the way to go. In some parts of Latin America, for example, the labor shortage has driven the cost of local managers as high as the compensation packages of executives two levels above them in the hiring organization. You might learn it’s actually cheaper to send in an expat. It’s valuable advice such as this that you should be seeking from your local contacts.

Resources for recruiting online.
I know what you’re thinking: There must be an online solution. The Web, after all, is a global medium. You’re absolutely right. Other than language barriers, which can be overcome, the Internet has no boundaries.

This is something U.S. businesses advertising domestic jobs have known for some time. Barb Ruess, marketing director for Indianapolis-based E-span says, “People have been posting jobs from all over the world pretty much as long as we’ve been around simply because we draw an audience from everywhere.” She adds, “It’s funny, we’ll even have companies that will post a job opening for here in the States and then will complain because they’re getting so many resumes from people who don’t live here.”

Some companies have started to take advantage of this fact to facilitate the recruiting process for their overseas operations. Ruess explains, “We do have a number of sites -- Lotus comes to mind as well as Intel -- that have divisions all over the world. And they place openings on their site for all of their positions.”

Of course there are limitations to this strategy -- which the Net will outgrow eventually. Bruce Skillings, executive vice president for Career Mosaic in Palo Alto, explains one drawback: “The fact still remains that the Internet is a very popular tool here in the States, but it’s in its very infancy in other parts of the world.” Highly educated technical individuals are the first to plug in, in any culture. Then eventually, as a market matures, the demographics shift to include postings for a wider variety of skill sets, including those of waiters and retail clerks. Rest assured, it won’t be long before things even out. Think how far we’ve already come when, as Skillings reminds us, “The Web is only four years old.”

Of course service providers are looking for ways to make your job easier, so you can expect significant advances in the near future. For example, Career Mosaic is launching country-specific sites all over the world. With sites for Canada, the United Kingdom, France, Singapore, Korea, Japan and Australia, and more to come in the next 12 months, this job board recognizes there are cultural differences between countries, and one site does not fit all.

“We manage a database that’s multilingual. So, if a company wishes to publish in native languages, we can do that,” Skillings explains. But he says many U.S. companies choose to run their ads in English, because they’re searching for fluent English speakers.

Help from contingent staffing service providers.
Another group you’ve worked with in the past on the domestic side and should try turning to for help globally is contingent staffing organizations. Many have had an international presence for years, and some of the U.S.-based firms actually do more business overseas than they do here in the States.

Gary Peck, president of the commercial staffing group of Interim Services Inc. based in Ft. Lauderdale, Florida, says, “If you go back even as recently as three or four years ago, it was relatively uncommon to have someone in the States say, ‘We know you take care of us in many locations here in America, but we also need some help overseas. Do you know anyone who can help us?’ That’s evolved to the client who says, ‘We need help overseas, and we’d like you to replicate your service model over there.’”

Peck explains companies in Western Europe actually use staffing services with a greater frequency than those in the States. “That’s been true for a while,” he says. “In almost every country -- whether it’s easy to hire or fire, or difficult to hire or fire -- it’s almost always more expensive to employ because of legislated benefits.”

So in some parts of the world avoiding these costs by contracting workers through a staffing organization is something to consider. This would require you to identify and define core and noncore jobs. Noncore jobs could be manufacturing positions or administrative functions that you would farm out to a service provider, leaving the provider to wrestle with the day-to-day issues including compensation and benefits. Peck says, “By allowing a company like Interim to manage those kinds of jobs, we think we can actually drive higher productivity and higher retention rates.”

In case you were wondering about temp-to-perm as a hiring strategy, Peck explains this isn’t yet a widely practiced service outside of North America. He says, “The European market in particular is three to five years behind the U.S. market in terms of development or sophistication.” Peck continues, “They all use a lot of staff, but how they buy, why they buy and what they’re looking for is reminiscent of the U.S. three or four years ago.” So temp-to-perm and onsite vendoring haven’t yet been embraced. But that may change as more U.S. companies request these services.

Peck adds, “We anticipate significant growth overseas. It’s still a relatively small portion of our revenue. But we continue to see the market there accelerating in its development and following very much of a curve like the U.S. has.”

In cases in which a U.S.-based provider does service the overseas location, you benefit from having a single point of contact and a consistent and familiar way to monitor progress with your recruiting efforts. And that’s something that’s going to be increasingly important to you as your business continues to expand globally.

Global Workforce, July 1998, Vol. 3, No. 4, pp. 19-23.