It used to be that only huge corporations had employees working across the globe. But with heightened competition for top talent and collaboration technology that provides easy interaction to people in far-away markets, it has become more common for small and midsize businesses to employ workers internationally.
“It has become very easy to move work anywhere with little transactional cost,” said Ravin Jesuthasan, global head of talent management for human resources advisory Towers Watson & Co.
From finding freelance workers on websites like eLance and TopCoder to building regional offices in new markets, recruiting global talent is now a realistic business model for companies of all sizes.
That is giving smaller organizations a competitive advantage, said Ian Siegel, CEO of ZipRecruiter Inc., a recruitment platform where companies can post openings to more than 100 job boards at once. ZipRecruiter recruits engineers from across the world, allowing them to work from home rather than relocate to the company’s headquarters in Santa Monica, California.
Such a strategy can bring smaller firms financial and strategic benefits. Along with tapping a much broader talent pool, it can help these companies lower compensation costs and gain a level of flexibility in staffing by using freelancers to support growth.
Still, while tapping international talent is a viable strategy for smaller firms, it requires more than just hiring. Without the right oversight, hiring staff or contractors for remote work can be expensive if not actively managed, according to Josh Bersin, principal and founder of Bersin by Deloitte.
“You need to have more interaction with these workers than your local staff, because they aren’t physically close,” Bersin said.
That extra communication isn’t just important in the early days of recruiting and onboarding. It has to be a fundamental aspect of how companies work together.
That’s the area where a lot of organizations fail their international staff, said Bruce Sevy, talent management expert with Chally Group, a performance management firm based in Dayton, Ohio.
“Once you get over the excitement of the new hire, it’s easy to undercommunicate with them,” Sevy said. But when it comes to foreign workers, “it’s impossible to over-communicate.”
Sevy said he advises companies to pull these employees into company meetings. “You want to talk to them about your strategy, goals and metrics, so they feel plugged into the business,” he said.
Managers also need to figure out how to translate corporate culture abroad. “Without that cultural engagement, your ties to your foreign workforce will be tenuous at best,” Towers Watson’s Jesuthasan said. That can leave global employees feeling isolated and more like contractors than valued employees.
This disconnect can lead to low productivity, poor quality of work and ineffective collaboration. Bersin said he knows from experience, as his team has hired remote global workers in the past that didn’t work out.
“They weren’t doing the work,” Bersin said, “and because they were so far away, we didn’t find out until much later than we would have if they had been local.”
The lesson: Remote employees need just as much, if not more, guidance, face time and management to be successful.
When companies invest the time and management effort to make these employees feel engaged, they can reap the benefits of a low-cost highly motivated employee, while gaining the added value of having someone on the team who brings a unique geographic perspective to the business.
“If you are going to hire people overseas, you need to be in the mindset that they aren’t just there to sell your product or execute your projects,” Jesuthasan said. “They are there to build your global presence.”
Using far-away employees as a smaller business isn’t easy. These three companies can offer lessons for small business executives.
Putting a Face on ZipRecruiter
ZipRecruiter has many of its 250 employees in several countries. It is also currently expanding its talent scope by building a satellite office in Israel, where the company has four engineers with plans to expand to 12 in the coming year.
Siegel said he wants the Israel office to be a key contributor to the company’s long-term strategy. “The first hire is the most important when you’re building an office overseas,” Siegel said. “You’ve got to thoroughly vet that candidate to be sure that not only can they do the job, but that they also have the skills to run an international office.”
That means finding someone with leadership skills and the ability to attract and vet new hires in that local market. Leadership skills are vital because once a satellite office grows beyond a few staff members, it becomes too difficult to manage from afar. “You need the local leader to be a conduit between the home office and the remote team,” Siegel said.
That local leader for ZipRecruiter is named Avi (Editor’s note: Siegel declined to provide Avi’s last name). He said his team searched two months to find Avi, who was considering an offer from Google at the time. Siegel said Avi took the job with ZipRecruiter because it allowed him to stay in Israel, whereas Google would have required him to relocate.
To ensure Avi sticks around, Siegel said he makes an effort to treat him like a business partner by involving him in strategy discussions and brainstorming sessions, as well as seeking out his feedback on projects.
Siegel said Avi is now expanding the company’s office in Israel and managing its recruiting efforts. Siegel said he has to make an extra effort to engage the rest of ZipRecruiter’s remote team to ensure they remain connected to the rest of the company.
To do that, ZipRecruiter employs a suite of communication tools, including Trello for project management and Fogbugz for bug tracking and project planning, as well as Google Chat. The company also holds frequent video meetings that allow everyone to see everyone.
“Face time is the most important aspect of managing a remote team and engendering loyalty,” Siegel said. “It doesn’t matter what a person is saying, if you can see their face when they are talking, you will know how they feel.”
Part of the Thumbtack Team
From the start, Thumbtack Inc.’s business model involved taking advantage of contract labor to write and edit content as well as conduct data entry and research for the company’s website that features hundreds of thousands of profiles of local service professionals, which consumers can use to book them for jobs and rate their work.
The company started working with contractors in the Philippines because the level of education and English fluency is high, costs are relatively low and there is a large population of people interested in this type of contract work.
But even though all its employees are technically freelancers, Thumbtack treats every one like they’re a part of the team, said Mohammed Malik, the company’s head of operations in the Philippines. “We recognize that the contributions they make to the company are very important, and we treat them like team members and let them know that we care about them,” Malik said.
In return, Malik said Thumbtack’s contractors are fiercely loyal to the company and often recruit friends and family to join the team. That has allowed Thumbtack to scale quickly and efficiently, with high-performing workers who have stuck around for years. Though Malik said that once they hit about 150 regular contractors, it became a little chaotic. At one point, Malik said, the company had 10 local recruiters hiring other contractors, with no common goals or process.
That’s where Malik came in. He was hired a year ago to run operations and to create a recruiting and talent management process in the Philippines that would create a sense of order and ensure the quality of work remained consistent. Now Malik is directly involved in interviewing every candidate who will fill a new role, and he provides strict criteria and hiring goals to contract recruiters who do the rest of the hiring.
Malik has also implemented a more formal onboarding process, which includes face-to-face training about the company vision, strategic goals and how that contractor will contribute to the company’s ongoing success.
“Giving them that context makes them feel like they are part of something bigger,” he said.
Once they start working, each contractor’s project history is tracked in the company’s human resource information system, so Malik knows who’s done what, where their skills are and what future projects they will be a good fit for.
This ensures the company picks the best contractors for new projects; it also shows contractors that the company recognizes their expertise, Malik said.
On a personal level, Thumbtack also makes the effort to acknowledge contractors’ birthdays, newly born children and local holidays. It also holds frequent video huddles where contractors from across the country meet online to discuss
projects, mentor each other and build relationships.
“A lot of these people work in isolation, so it’s nice for them to be able to develop a sense of comradery,” Malik said.
All of these efforts help extend the Thumbtack culture to all of the roughly 800 contractors. Malik said this has reduced turnover, driven loyalty and ensured that the quality of the work is high.
And while such team-building and engagement initiatives require more time and financial investment than most companies would consider for contract staff, Malik said when he compares it with the cost of hiring full-time employees in Thumbtack’s San Francisco headquarters, it’s a drop in the bucket.
“When you are a small company, it pays dividends to treat contractors like valuable full-time resources,” Malik said.
Medigo’s Culture-Friendly Face
At medical tourism firm Medigo, connecting with foreign workers is a key part of the company’s success.
Medigo is a medical travel booking company that supports tourists traveling to foreign countries for health care. The company is headquartered in Berlin, Germany, but having staff on the ground in countries where travelers originate and travel to is vital to its customer service strategy.
“We need people representing us who understand the culture and geography of these destinations,” said Katharina Gröber, Medigo’s head of talent management.
Fortunately, Medigo’s local team is just as international as its remote workers. Of the 25 people working in the Berlin office, only two are German. The rest hail from every continent in the world, Gröber said. That has been helpful both to foster an international corporate culture in the company and for recruiting. The company often taps its own social networks to find international contractors to lead local Medigo efforts.
Though Gröber said finding a local with a decent résumé is only half the battle. “Before we choose anyone, we have to be sure they fit our culture,” Gröber said. That can be challenging to figure out if you aren’t face-to-face.”
Gröber said her team doesn’t have the time or resources to travel around the world to vet new recruits, so she and several members of her staff meet with them via Skype to get a sense of their work style and personality.
“Our interview technique is quite friendly,” Gröber said. Through a conversational tone, they help candidates feel comfortable enough to reveal who they really are. “Once you get someone to warm up, they start talking, it works really well.”
Once these international candidates are on board, Gröber said the company makes sure they have a dedicated supervisor who works closely with them to meet project goals and feel connected to the company. This ensures their work stays on track, Gröber said, and that they have someone they can turn to with questions or concerns. “These close relationships ensures both sides get their expectations met,” she said.
Employees’ connection to the company isn’t limited to just that supervisor. Gröber said she also hosts weekly all-staff feedback meetings and monthly strategic meetings via Skype where local and international staff gets to know each other as they discuss current projects and business goals.
And when they are not working, they socialize, sending pictures back and forth highlighting life in each country.
“It is important to respect everyone’s culture and traditions,” Gröber said.