Hiring in the USA: What You Need to Know About Recruiting
For foreign entrepreneurs building a business in the USA, recruiting in a new country is often a real challenge. Here you will learn what to watch out for and which cultural differences come into play.
If you set up a business in the USA as a European entrepreneur, you need to get to grips with the cultural differences of the American labor market, and that includes recruiting. German companies alone employ more than 750,000 people in the USA. Yet hiring in the land of opportunity works quite differently from what you are used to at home. From the education system to a far faster-moving labor market, there is plenty to keep in mind.
How US recruiting differs from Europe
The biggest difference by far comes down to the American education system . The tiered secondary school tracks common in many European countries do not exist in the USA, and there is no real equivalent to the European apprenticeship and vocational training systems. As a European entrepreneur looking to build your business in the USA, you should be prepared for the search for staff to look complicated at first. In the USA, people far more often gain their experience while doing the work itself, on the job, rather than through formal training. That makes choosing the right candidates harder. So plan plenty of time for recruiting in the USA, especially since the market for skilled workers is highly competitive. Inexperienced foreign entrepreneurs in the USA usually struggle at first to judge whether a candidate is right for a given role. American résumés typically describe previous jobs in detail but say less about formal training. To narrow down a pool of applicants, US employers therefore usually test knowledge and psychological fit. Depending on the field, candidates first take a series of standardized tests to check their general qualifications, and only those who pass are invited to an interview.
Time: the underestimated factor in US hiring
As these differences suggest, time is an often underestimated factor that causes problems for new businesses in the USA. The best way to navigate the fast-moving market and unfamiliar structures is with a good local recruiter. This pays off far more than running your search from your home country. You can of course advertise on the usual job portals, but you will most likely be swamped by the sheer number of replies. Combined with differently structured résumés, this often makes it extremely hard for European entrepreneurs to spot the right candidates. Carefully chosen recruiters are a huge help amid the chaos. They can approach suitable professionals directly for you and check them for the skills you need. They also spare you the problems of the time difference between Europe and the USA when communicating with candidates. But be careful here: competition among recruiters for skilled workers is fierce. Be wary of any recruiter who makes big promises too quickly and claims to pull the perfect candidates out of a hat. Everyone is tied to the same labor market, and filling roles with special requirements usually takes at least a few weeks. It is better to work with a trustworthy recruiter and agree precisely on the qualities you want in your future employee. By the way, benefits such as health insurance are a big plus when attracting good candidates.
Anti-discrimination laws and quotas
The USA has a range of rules designed to prevent discrimination against certain groups in the labor market, and you must follow them strictly when hiring. The specific rules vary from state to state. In general, the laws mainly protect minorities and groups that have often faced discrimination in US history. Such rules also protect women, especially pregnant women. As a rule, no one may be excluded on the basis of origin, skin color, sex, religion or age. Note that there is no right to paid parental leave in the USA. Employees at companies with more than 50 staff are only entitled to twelve weeks of unpaid leave. Exceptions include states such as California and New York, which have their own parental leave rules, in some cases with financial support. So there are location-specific differences you need to factor into hiring. The Office of Federal Contract Compliance Programs (OFCCP) monitors compliance with these rules very closely. Naturally, all this can drag out filling certain roles when every condition has to be met.
The catch with psychological assessments and the 80% rule
Psychological assessments are often standardized tests that can unintentionally skew the selection process. The so-called 80% rule serves as the benchmark here. It was introduced to counter what is known as adverse impact, meaning the disadvantages such tests often contain unintentionally. The rule states that the selection rate of a protected group of applicants should be at least 80% of the selection rate of the most frequently selected group; if it falls below that, this is taken as evidence of adverse impact. So care is needed here too, because breaching this rule usually leads to hefty fines. And if the recruiter's conduct or the selection process causes adverse impact, the business owner is always liable.
The background check
In the USA, unsuitable applicants are screened out from the start with a background check, a look into their past. That may sound unusual to European ears used to strict data protection, but in the USA it is completely normal and a basic requirement in certain fields. The main point is for the company to know about any criminal record, and also about possible financial problems of the applicant. Employers can request this information from authorities or specialized agencies.
In short, hiring in the USA is a real challenge for foreign entrepreneurs who have just set up there. If you want to be sure not to breach the quotas and rules, do your homework before you set up. For more information and support with recruiting, the best step is to book a consultation with us.
Consultation & implementation
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