How to Solve 13th-Month Pay and Other Global Hiring Mysteries

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Globalization and digital technology have made it easier than ever to hire employees across borders. For companies seeking fresh talent, international recruitment opens access to vast and diverse talent pools. It’s no surprise that even small businesses are expanding their hiring efforts globally.

Yet venturing abroad brings its own set of challenges, from navigating local employment laws to respecting cultural workplace norms. A single misstep can quickly damage your company’s reputation and legal standing.

To build a successful global team, start by setting aside assumptions and dive deep into the employment practices and cultural expectations of each target country. Beyond well-known concepts like 13th-month pay, you may encounter verbal contracts or nuanced local customs around feedback and candidate evaluation.

Mastering these details can position your company for strong growth on the international stage. Here are several practical steps to guide you.

Seek a Partner With Experience

You don’t have to navigate global hiring alone. Partnering with an experienced human resources provider that already operates in your target market can save significant time and reduce risk.

In many countries, establishing a legal entity is required before you can hire locally. If that’s not part of your strategy, an employer of record (EOR) offers a practical alternative. EORs maintain the necessary legal entities and can employ workers on your behalf while handling payroll, benefits, and compliance.

These partners bring deep knowledge of local employment regulations, helping you avoid costly mistakes. They understand nuances such as whether 13th-month pay is legally mandated or simply customary, ensuring your company meets all obligations and maintains positive employee relations.

Choose partners carefully by checking references from similar businesses. With the right support, you can establish operations smoothly and confidently.

Listen to the Locals

Just as you would research a new market before launching a product, take time to understand the local employment landscape before recruiting. Speak directly with professionals in the target country about their experiences with hiring processes, compensation, benefits, and work-life balance expectations.

Consider consulting a local employment attorney to clarify key legal frameworks, especially if you are not using an EOR. For instance, familiarize yourself with any applicable workers’ compensation requirements.

Use these insights to create tailored candidate profiles and job descriptions that reflect local realities. While this research requires an investment of time and resources, it greatly reduces uncertainty and helps you attract the right talent more effectively.

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Educate Yourself

Other companies are already hiring successfully in your target market. Learning from both their achievements and setbacks can inform stronger decisions for your own global expansion.

Check whether your destination country hosts one of the more than 100 American Chamber of Commerce (AmCham) organizations. These groups, recognized by both the U.S. Chamber of Commerce and local authorities, exist to support U.S. business interests abroad and can provide valuable connections and guidance.

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