Since the result of the Brexit vote, pre-IPO software companies looking to scale in Europe have been cautious about putting all their eggs in the UK basket.
London has traditionally been a great place for US Tech start-ups to launch due to the common language, similarities in hiring culture/employment contracts, and the tech savvy Financial Services Sector.
However, London is one of the most competitive recruitment markets in the world, making it hard to attract the best passive talent; and the major financial institutions have become more risk averse, so it is now the ‘born in the cloud’ customers that have become the quickest on the uptake of new tech.
An increasingly popular alternative is to hire in countries where your target customers have their global HQs and the key stakeholders may reside (e.g. Booking.com in Amsterdam, Spotify in Stockholm).
So, thinking of hiring in Europe?
Other than during the Ryder Cup, it’s bad form to refer to Europe as just one place in the same way you would refer to the collective power of the USA! As it has come as a surprise to some people in our network that Benelux isn’t actually a country, it may also surprise you that there are actually 44 countries in Europe… that’s a lot of ground to cover.
Here are five things to remember:
1, From country to country there are a range of cultural differences, especially when it comes to hiring and how you engage passive talent. You need to be aware of the nuances and tailor your style. E.g. Norway and Sweden remarkably similar; Belgium and the Netherlands surprisingly not!
2, Your pool of talent will also vary significantly from country to country. There are 330m people in the USA, 66m in the UK, but only 5.5m people in Finland, and 11.5m in Belgium. So you can’t apply the same approach/stringent skill requirements, and expect to get the same results.
3, Companies that are big in the US/UK can actually be quite small still in other regions. So even though you might be used to Salesforce or ServiceNow employees being used to matrixed environments in the US, you might be pleasantly surprised that the same employees in other regions will have the new business hunting skillset that you are looking for.
4, Word of mouth and referrals are valued highly. It is really important to network well and keep an impeccable reputation, take the time to build relationships and provide ALL candidates with a positive experience, regardless of whether or not they get the job.
5, Benefits that you might take for granted, or that might seem unnecessary to you are must-haves in other regions e.g. a car allowance in Germany is essential! Whilst you might think candidates are being pedantic or overly qualifying by asking about things like car allowance (Germany) or holiday allowance (Finland), remember that it is a reflection of culture rather than the candidate specifically.
How do I hire in Europe?
When you do find the right person, are you going to hire them on a fixed contract? Outsource? Setting up a legal entity can be a lengthy AND costly process so it is worth thinking about the longevity – permanent operations are, of course, more attractive to candidates but could make it hard to terminate employment if things don’t work out.
Similarly, tax incentives in places like Ireland might be attractive initially, but if your customers are enterprise level then your field sales team won’t be in the right place. It sounds obvious, but plan for where your customers are/will be.
We’ve helped enterprise software vendors scale across 12 countries in the last 12 months so have combined our knowledge here to help you get started. If you are looking for your next international hub and want advice on devising the best strategy for your needs, give us a call to get more specific advice on your market.