As global business expansion becomes more common, hiring talent from around the world offers unique advantages. However, navigating the complex landscape of international employment is challenging. People Ops leaders seeking to expand their global workforce must be aware of the potential obstacles they might encounter, especially if they are trying to hire and employ talent directly.
In this blog post, we’ll explore the four most difficult countries for global employment based on our experience, sharing valuable insights to help you navigate these challenges successfully. Of course, it goes without saying that difficulty hiring in a particular country depends on where you’re hiring from, and can vary greatly from country to country. In short, we’re hitting the highlights. As such, these considerations should only be used to help inform the hiring strategy that’s unique to your company and its workforce needs. There’s always more, and your unique circumstances will unquestionably impact the analysis.
4 of the most difficult countries to hire in
1. Germany: Navigating strict employment regulations
Germany’s extensive labor laws and regulations can pose challenges for employers located abroad, making it one of the most difficult countries to hire in. Compliance with intricate legal requirements, especially for employing EU and non-EU nationals, can be time-consuming and complex.
Furthermore, navigating dismissals in Germany is intricate and it becomes even more challenging when the Protection Act against Unfair Dismissal comes into play. This legislation, applicable to companies with over 10 employees, enforces robust protection standards after an uninterrupted six-month employment period, requiring meticulous assessment and preparation of dismissal documentation and procedures to ensure strict compliance.
Additionally, addressing the challenge of equal treatment on benefits when hiring globally requires employers to be vigilant about mandatory requirements, compelling businesses to align their global hiring practices with the country’s specific legal framework. This task is further intensified in Germany, where the Equal Treatment Act imposes stringent anti-discrimination rules for businesses hiring in Germany.
Hiring in Germany also presents challenges from a payroll perspective. While income tax rates are structured based on a progressive framework, calculating exact tax withholding rates can be difficult as there are six unique categories based on the employee’s marital and family status. The country’s intricate welfare system can also make social security contributions difficult for employers to calculate.
2. Japan: Overcoming language and cultural barriers
Known for a highly skilled technical workforce and a strong economy, Japan represents an area of opportunity for many firms based in other countries. Yet, hiring in Japan presents unique challenges due to language barriers, cultural nuances, and a strong emphasis on traditional business practices. While most global tech companies use English as their main language, English speakers in Japan are less abundant than they are in some other tech hubs in Asia. It’s estimated that only about a fifth of the population speaks English.
While Japan is generally open to foreign investment, navigating local customs, communication styles, and intricate hierarchical structures can be difficult for foreign companies seeking to establish a presence in this market—particularly those from the West. And, since many companies in Japan currently face labor shortages, companies located abroad that are looking to hire here will also be competing with local employers.
3. India: Balancing talent scarcity and competition
While India boasts a vast talent pool, especially in technical fields, competition for skilled professionals is fierce. Tech and IT roles are in high demand, often leading to talent scarcity and increased salary expectations. Navigating India’s competitive hiring landscape while also managing cultural differences and remote work dynamics can be challenging.
India has also recently instituted a new tax regime eliminating many tax exemptions but lowering the overall tax responsibility. Employees have the option to choose which taxation method they prefer. There are also social security requirements and retirement contributions to consider, as well as required severance pay. All these variables can make for unique payroll challenges.
4. Brazil: Negotiating complex labor regulations
Brazil's intricate labor laws and tax regulations can pose substantial challenges for international employers. Companies must contend with complex hiring and termination procedures, mandatory benefits, and navigating the country's social security system.
For instance, employers looking to hire in Brazil must observe the notice period—usually 30 days—before employees can be terminated. There’s also a region-based paid holiday structure to be aware of, including a 13th month salary bonus paid out in two halves. Workweeks must follow specific limits, which are typically eight hours per day or 44 hours per week. A maximum of 2 overtime hours may be granted in a single day, as long as the total hours worked remain within the 10-hour limit. Hours worked in excess are considered overtime and must be compensated at a rate of 150% of the regular pay.
How companies can streamline global hiring
While expanding a global workforce offers tremendous benefits, it’s crucial for People Ops leaders to approach it with careful consideration, and only after researching the intricacies in each country where you seek to engage talent. The four countries above—Germany, Japan, India, and Brazil—highlight the diverse range of challenges that can arise when hiring internationally.
By proactively addressing these difficulties, seeking expert guidance, and adopting a strategic approach, you can position your organization for success in these challenging markets and ensure a smooth hiring process that complies with local regulations and cultural norms.
To simplify hiring anywhere in the world, turn to Oyster’s global employment platform. Our solution offers compliant hiring and payroll for more than 180 countries, eliminating many of the barriers that come with hiring abroad. Find out more about how we can help your company expand its global workforce.
Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.