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When beginning to work overseas, one of the biggest challenges for any small business owner is deciding how many foreign employees to hire for a seamless transition into the global market.
Once a company has established itself in a foreign country, finding at least one quality foreign employee is paramount and critical for a business to help traverse cultural barriers, says Verne Harnish, chief executive of Gazelles, a global executive education and coaching company based in Ashburn, Va.
Here are some tips for knowing when and how to hire employees in a foreign country.
— Verne Harnish, chief executive of Gazelles
Harnish recommends committing at least one person from the company - either the business owner, another employee or even a business coach - to spend some time in the country scouting the right employee.
He also recommends exploring social networking sites, such as LinkedIn, to start the search for a local employee or partner in the foreign country.
Once the business owner has identified a potential partner or employee, start by giving that person a minor project at first.
"Test drive the relationship through some project work," Harnish says. "You want to just see if they do things like return your phone calls in a timely fashion - that they do what they say they're going to do."
Once the business has a good solid partner on the ground, together they can determine how many more - if any - foreign employees may need to be hired.
"It just doesn't make sense to hire someone until you reach a critical mass of either employment or sales volume," says Kirk Heriot, professor of management and entrepreneurship at Columbus State University, in Columbus, Ga.
He says a company that has annual sales of less than $200,000 may consider simply paying a broker to take care of some logistics, such as marketing or channel development. "You can pay a broker for a lot less than hiring an employee," he says.
When hiring employees in foreign countries, employers should be aware of U.S. laws that apply to working overseas.
For example, companies working overseas need to be aware of the federal Foreign Corrupt Practices Act (FCPA), which among other things prohibits corrupt payments to foreign officials for the purpose of obtaining or keeping business. As a result, some companies may want to develop a formal policy that gives guidelines on how to avoid improper conduct.
It's also important to understand local work and labor laws. For example, many foreign countries require a certain amount of notice before an employer can terminate an employee, according to an article written by Kyle Sciuchetti, an employment attorney at Seattle lawfirm Bullivant Houser Bailey PC. Sciuchetti recommends hiring an attorney to help draft an employment offer letter or contract that would clearly address the employment parameters. "Even something as simple as an internal all-employee directory may be a violation of the law in a foreign country," Sciuchetti says.
Once businesses have determined the right number of foreign employees, they can use a trusted online foreign exchange service to send one-time or ongoing international compensation with online wire transfers. And helpful tools such as bids and email market-rate alerts can make it easier to take advantage of preferred exchange rates - thereby minimizing extra costs associated with international compensation payments.
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