Firms Hiring Foreign Employees: Process, Compliance Essentials and Long-Term Value Management

Company Employing Foreign Employees: Process, Compliance Key Points and Long-term Value Management

With the acceleration of globalization, it has become a common strategy for enterprises to gain international vision, technical expertise or language advantage by bringing in foreign employees. However, hiring foreign employees involves legal, cultural, management and other multi-dimensional challenges. Enterprises need to systematically plan processes, strictly abide by the bottom line of compliance, and build a sustainable integration mechanism to maximize the value of talents.

Analysis of the complete process of 1. hiring foreign employees

1. Job evaluation and demand confirmation
Enterprises need to clarify the necessity of recruiting foreign employees, usually focusing on three types of positions:

• technology scarcity type : such as artificial intelligence algorithm engineers, chip research and development experts, and insufficient supply of domestic talents;
• language and culture type : employees who need to be familiar with the target market language (such as Arabic and Spanish) and business practices for transnational business development;
• international management type : overseas branch managers need to have cross-cultural leadership and local resource integration ability.
  In order to develop the European market, a new energy enterprise has given priority to recruiting German employees who are familiar with the EU carbon trading policy, thus accelerating the process of product compliance certification.

2. Qualification review and recruitment channel selection

• qualification requirements : candidates are required to provide academic certification, no criminal record certificate, at least 2 years of relevant working experience certificate and health examination report.
• channel optimization :
• industry vertical platform : such as GitHub (technical post) and LinkedIn (management post) can accurately reach the target population;
• overseas alumni association : cooperate with top universities in the target country to establish a talent pool;
• professional headhunters : for high-end positions, entrust headhunters familiar with the international talent market to carry out back adjustment and negotiation.
  A biopharmaceutical enterprise recruited core R & D personnel through the Alumni Association of the German Mapp Research Institute, which shortened the technical research cycle by 6 months.

3. Work permit and residence permit processing

• application materials : including labor contract, business license of enterprise, application form for employment permit for foreigners, etc.
• approval process : subject to three levels of examination and approval by the local science and technology bureau (talent identification), the human resources and social security bureau (employment permit) and the exit and entry administration (residence permit);
• time limit management : the validity period of the work permit is usually the same as the labor contract, and the maximum period is not more than 5 years. An extension must be applied for 30 days before the expiration.
  a manufacturing enterprise failed to extend the residence permit for foreign employees in time, which prevented it from participating in international exhibitions normally and missed tens of millions of orders.

Key points of 2. compliance risk prevention and control

1. The legal red line cannot be touched

• illegal employment : the enterprise will be fined 10000 yuan for each person illegally employed without a work permit or working beyond the scope of the permit (such as technical guidance with a business visa);
• salary discrimination : the salary of foreign employees shall not be lower than the local minimum wage standard for the same position and shall be equal to that of domestic employees for equal work.
• social security payment : except for citizens of countries that have signed bilateral social security agreements with China, enterprises are required to pay five social insurances, including old-age insurance and medical insurance.
  An Internet company was ordered to make up and pay late fees for failing to pay provident funds to foreign employees, affecting the company's credit rating.

2. Refined design of contract terms

• probation period limit : if the labor contract period is more than 3 months but less than 1 year, the probation period shall not exceed 1 month; If it is more than 1 year but less than 3 years, it shall not exceed 2 months.
• Termination Clause : Clarify the economic compensation standard and advance notice period (such as 30 days written notice before the expiration of the contract) to avoid labor disputes;
• Confidentiality and Competition Restriction : for core technical positions, it is agreed that they shall not work in competing enterprises within 2 years after leaving office, and compensation shall be paid.
  a financial institution lost more than 20% of its customers because the contract did not stipulate competition restrictions and core traders joined competitors after leaving office.

3. cross-cultural integration and long-term value release

1. Acculturation support system

• Induction training : covers Chinese labor law, corporate rules and regulations, cross-cultural communication skills, etc.;
• Mentor system : provide each foreign employee with a domestic senior employee as a cultural mentor to help solve life and work problems;
• regular feedback : learn about their adaptation through quarterly interviews and dynamically adjust management strategies.
  an automobile enterprise equipped Japanese engineers with Chinese tutors, and its team communication efficiency increased by 40% within 3 months.

2. Career development dual-channel design

• technical promotion path : establish the rank of chief scientist, technical expert, etc, participate in the evaluation and employment equally with domestic employees;
• management training plan : select potential foreign employees to participate in transnational project management and accumulate global vision;
• rotation mechanism : arrange for them to rotate in different departments in China to deepen their understanding of the whole chain of the enterprise.
  a household electrical appliance enterprise has increased the proportion of foreign employees promoted to director of Asia Pacific region to 35% within 3 years through "technology + management" dual-channel training.

3. Long-term retention incentive mechanism

• equity incentive : provide restricted stock or options for core talents, binding it to the long-term interests of the enterprise;
• family care : to help solve the problems of spouse employment, children's schooling and so on, and to eliminate worries;
• cultural identity shaping : to enhance the sense of belonging by organizing traditional festival activities, enterprise value seminars, etc.
  a science and technology enterprise provides foreign executives with places in Beijing international school, and its family retention rate has increased from 60% to 90%.

4. Case: Leap from Compliance to Value

Case 1: the Chinese localization practice of a multinational pharmaceutical company
In order to accelerate the research and development of new drugs, the company introduced 3 biostatistics experts from the United States to maximize its value through the following measures:

• Handling work permits and residence permits in accordance with the law to ensure compliance;
• Establishing a bilingual laboratory in Chinese and English to eliminate language barriers;
• formulate a "3-year technology transfer plan" and gradually authorize the core algorithm to the domestic team;
• 3 years later, foreign experts led the completion of 2 patent authorizations and trained 10 local technical backbones.

case 2: global talent trap of a cross-border e-commerce company
in order to expand the Southeast Asian market, an enterprise hastily recruited 5 foreign employees who did not apply for work permits, resulting in:

• 3 people were repatriated due to illegal employment, and the project was stalled for 2 months;
• the remaining 2 people left their jobs due to cultural conflicts, and the customer complaint rate increased by 15%;
• enterprises were included in the labor inspection priority list, and the financing progress was hindered.

Conclusion

The employment of foreign employees is an important fulcrum of the enterprise's globalization strategy, but it needs to be based on compliance, integration as the path, and value-oriented. Enterprises should establish a trinity management system of "law-management-culture": avoid risks through standardized processes, improve efficiency through refined operations, and enhance stickiness through humanized care. In today's increasingly fierce competition for talents, a team of compliant, efficient and loyal foreign employees will become the core engine for enterprises to break through geographical restrictions and achieve sustained growth.