Recruiting in Europe? How Talent Acquisition Differs Overseas

When we talk about regional differences in employment regulations, the uniqueness of the American at-will employment contract often comes up. In most other countries, to avoid risks of wrongful termination, a more significant set of regulations usually come into play before a due process in terminating an employee can be considered complete. What doesn’t come up as often, however, is that similar regulatory differences apply when it comes to recruiting talent abroad versus in the U.S. In some European countries, for example, companies are required to post and recruit for a new job opportunity internally first, before seeking to attract external talent.

As any company selling a cloud-based product will tell you, global customer demand can occur overnight and closely behind it comes the need to hire talent in satellite offices across the globe. I’ve run into different types of international challenges both from supporting our customers in growing their presence across domestic borders, and also as a leader tasked with building the same stellar teams around the world as the ones we’ve curated in Philadelphia.

Every interaction a company has with potential new employees is an opportunity to make an impression, establish a connection, and ultimately inspire them to join the team. Understanding the best way to personalize the talent experience, let alone ensuring you’re finding and attracting the right talent, can be a tricky process. And it doesn’t get any easier when you add differing recruiting regulations and cultural expectations to the mix. There are a few key considerations U.S. companies need to keep in mind as they look to attract and retain talent overseas.

Finding Talent in Industry Hotspots

We sometimes tend to think about Europe as a homogenous entity with similar values, economies, and industries. While one of the core pillars in the European Union is to do away with some of those regional differences for the benefit of free movement of goods, capital, services and labor, there are still big differences between countries and regions that U.S. companies need to consider when searching for the right overseas talent. Europe is chock-full of startup hotspots, and where they develop depends on factors such as proximity to talent and metropolitan areas, differing salary standards, or even the prevalence of government subsidies that support and guide entrepreneurial efforts. Old Street in London, for example, is a longstanding tech hub, whereas Berlin has become a cloud startup’s mecca. Another popular German city is Hamburg, which acts as home to Facebook, Google, Microsoft, and Twitter.

Increasingly, a lot of emerging companies in the tech sector are targeting talent in Ukraine and Eastern Europe for access to talent from universities that are making significant and rapid advancements in future and critical technologies such as nanotechnology.

When spearheading our own European expansion for talent, we opted to locate in the Netherlands, in Rotterdam. For us, language capabilities were a critical factor, and with a third of the country speaking at least three languages, the access to multilingual talent is an important one. Similar to our existing global offices in places like Tel Aviv, Rotterdam is a thriving technology hub with strategic access to talent as well as cutting-edge research and innovation.

Attracting Talent With Different Expectations on Salary and Work-life Balance

Though Silicon Valley tech salaries will have all other countries beat, there are significant differences in salary rates across European hotspots and countries. On average, software developers in London, Berlin, and Rotterdam enjoy what is considered high compensation at an average of around $56,500 per year (€50,100). But that doesn’t even consider purchasing power, as the cost of living in Berlin for example is cheaper compared to other major capitals such as Paris and London.

Employee expectations about work conditions such as salary tend to differ country by country, region by region. Typically, Northern Europe is characterized as a much more individualistic society, focused on individual achievement, as compared to Southern Europe where collectivism is strong and young people on average live at home with their parents a decade longer than their Northern peers. Perhaps not surprising then, the number of single-person households in Northern and Western Europe are more prevalent as compared to Southern EU countries. These same cultural values shine through regarding the notion of what’s considered work-life balance.

When it comes to work-life balance among tech professionals, Copenhagen leads the way based on average earnings, cost of living, number of paid leave days, and hours worked annually. For U.S. companies recruiting talent in Europe, one of the biggest cultural differences will be the one regarding expectations of work-life balance. There is no such thing as at-will employment, and European employees are accustomed to 3-5 week vacations, parental leave that can last up to a year, and subsidized pensions. When leaving an employer, it’s not uncommon that employees by contract are required to give notice 1–3 months in advance of leaving, which can come as a surprise for any American employer used to faster hiring practices. When competing for European talent, understand these differences to plan recruiting practices and develop compelling employment packages that are competitive while aligned with overall company policies.

Retaining Talent in Different European Economies

The EU employment rate for people aged 20–64 is at an all-time high at 73 percent. The highest-ranking EU country is Sweden, with 83 percent of its eligible workforce enjoying employment. Though they’re not EU members (rather EFTA countries), Iceland and Switzerland have achieved equally high employment rates at 87 percent and 83 percent, respectively. It’s possible that a contributing factor to the high employment rates stems from Europe’s different employment laws, which compared to the U.S. make it much harder to terminate an employee. For a U.S. employer who might be used to quickly increasing and decreasing staff numbers, operating in Europe will require a new set of legal procedures to terminate an employee. Any mistake in the process can prove itself very costly.

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Differing labor laws and industry hotspots aside, fighting for talent in countries with high employment rates can prove challenging. If the European Council can see to it, employment rates will only go up. As part of its effort to strengthen the EU economy and prepare for challenges in the new decade, the European Council has set a target of achieving a minimum employment rate of 75 percent across all member countries by the year 2020. Last year, however, only 14 member countries had achieved those levels. At the other end of the spectrum, EU countries including Croatia, Italy, Romania, Spain, and Belgium ranked below 70 percent. Perhaps not surprising given its economic situation, Greece is at the bottom of the list with only 60 percent of its workforce in employment.

Though millennials and baby boomers have very different views on how long a company deserves their loyalty, regional differences in Europe still exist. Culture plays a big part in it. In Northern Europe for example, employees tend to stay with a company for several years, while in Britain, average employee tenure is the lowest one in all the OECD countries. These cultural differences should be accounted for when considering European talent acquisition — but it goes both ways.

A common mistake is not level-setting at the onset of the recruitment process. U.S. employers need to be crystal clear with the policies they live by. To avoid misalignment with talent who might be expecting established career paths, emerging-growth tech companies in particular need to be transparent early on in the hiring process about the fast-paced environments they typically practice and what the opportunities for growth in such a company might look like.

Managing Talent Data in the Age of GDPR

With the introduction of the EU General Data Protection Regulation in May last year, European companies weren’t the only ones impacted by the new privacy law. Developed to give EU residents more control over their personal data, any U.S. company that collects information provided by job seekers in Europe will need to adopt processes that ensure compliance with GDPR. This includes data shared via email, stored in your ATS, or even when processing talent data via third-party vendors.

There are plenty of checklists to help you build compliant processes but the bottom line is, it’s all about managing your talent data, knowing the touchpoints where you interact with job seekers, where that data resides, and how you ultimately process it or share it with other parties. Today’s talent-acquisition strategies are increasingly defined by technology solutions that support these types of data management requirements while also using advances in AI to take some of the grunt work out of the hiring process, creating the foundation for a more personalized and pleasant experience for all parties.

So while it may feel easier to recruit talent in-country, U.S. companies should seize the opportunity to tap into overseas talent and innovation to build solutions and services that can scale and become the next success story. Your business is defined by your talent, and you need to tailor and treat them right from the very get-go. No matter where you’re from, the principles of finding the right talent, attracting them, and providing the experiences to retain your employees are shared between all of us.

Mahe Bayireddi is CEO & co-founder of Phenom People, a Talent Experience Management (TXM) platform. Bayireddi is a passionate entrepreneur leading Phenom People in the mission to help a billion people find the right job opportunity. He previously co-founded several successful technology companies, including SnipSnap, BijaHealth, and BHSP Nexus Software. Known for his expertise in predictive intelligence and machine learning, Bayireddi holds both a B.E. and M.S. in Computer Science and served extensively as a software consultant and web developer in the earlier years of his career.

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