Expanding your recruitment agency overseas can be a great strategy for growing your business, increasing its value and getting ahead of the competition. However when setting up your new business abroad there is a lot to consider, particularly when it comes to making sure that your business is compliant with local regulations. It is important that you set yourself clear goals to ensure that you cover everything that needs to be done. Here is a simple step by step process for what you need to consider when setting up your new temp agency.
Step 1
Before considering expanding your recruitment company abroad, one of the most important things is knowing your market and finding out the reasons for entering the market. Perform a Due Diligence report to understand the full impact of your business. Is there a need for your services? What is the competition? You need to be able to find a reason why people will chose your agency over the competition. You also want to know how to pitch yourself. What are your unique selling points and what rates are you going to charge?
When deciding what country you’re looking to establish in it’s important to look at the macro and micro economic factors. Rank nations based upon macro-economic factors such as currency stability, exchange rates and so on. Now you have the basis to start calculating the nature of market entry costs. Some countries such as China require that some fraction of the company entering the market is owned domestically.
It is also a good idea to build up business in the country you are planning to expand to before opening an office there. This way you can access whether you are likely to be successful there before spending huge amounts of money opening an office. Budget is also a key factor in your early stages of planning. Evaluate the costs involved in expanding your business abroad. The initial costs to think about are staff, corporate insurance, marketing and other business expenses. If you are uncertain about opening a new office in another country but would still like to expand your business you can look at other options of expanding into another country such as: licensing, franchising, partnering, joint ventures, buying a company etc.
Step 2
The next step is looking into the legal framework. It is important to make sure you are operating in a compliant way and abiding by the local laws in that country. It is a good idea to work with a lawyer in the country you will be operating in. They will have a thorough understanding of the employment laws in that country. You will also have to be aware of any restrictions involved when hiring temporary workers. Restrictions can vary from country to country. In certain countries you need a special license to lend out labour. For example in Germany you’ll need an AUG license and in Switzerland a SECO license.
Step 3
Once you have established the legal framework, the next step would be to look at the practicalities of opening your new office. Where will your office location be? This can be particularly important in places like Germany and Switzerland. For instance Switzerland is divided up in cantons and each has different rulings regarding labour laws. Because of this you are better settle in the Canton with the most favourite rulings for your services. Location of your office can be important to your reputation so this is something that you may need to look in to.
Step 4
You will need to look in to the labour laws in the country you are operating in as your recruitment agency will need to be regulated and you will need to be aware of license issues. This can be complex as every country has its own set of protections and regulations. These regulations can also differ between regions and cities within a country too. Language and culture can also be a challenge. You need expert knowledge in the country you are operating which is why it is a good idea to use local lawyers and accountants.
Rules for temp workers in each country can vary. For example to employ temp workers in France is very difficult. Where as in The Netherlands they are much more welcoming of temp workers. You will also be dealing with different rules depending on the skills of the migrants and the visa requirements. Another thing you will have to think about is hiring staff. How many people will be working in your office? You will most likely want to employ a local director. In certain countries, such as France and Spain, you will have to provide a large cash deposit to prove you are valuable in the market. You want to know the costs up front otherwise you will lose money if things go wrong.
There is a lot to consider when expanding your recruitment company internationally. By following these steps you can ensure that you are fully prepared.
