"I'm sending one of my employees to live and work in Spain for two years. How much should I offer by way of a living stipend on top of his salary?"
"Our Irish co-op student, who's about to graduate from our local university, has been working for us the last six months. He's been great. What steps can I take to legally keep him working with us?"
Do either of these questions - or topics like these- sound familiar? I recently spoke with two individuals who share their insights to these questions.
First, I spoke with Steven, an American sales manager, who was assigned to live in Singapore for nine months in 2009. Steven works for an Ohio-based manufacturer. He indicated this was his first time as an expat despite years of travel to Asia as a salesman. He shared with me what his experience was like being sent to live and work abroad.
Q: What was the hardest part of your expat assignment?
Steven: The hardest part of being abroad was a feeling of disconnectedness from the company. At times, I felt like a "man on an island" and worried that my work could be forgotten by people back at HQ.
Q: What were some gains from your expat assignment?
Steven: I got a huge boost in my confidence in my job and in my motivation. I was able to join the local Chamber of Commerce, and build a rapport with the local Department of Commerce offices. I felt more integrated with the local community and in the region.
Q: How were HR matters handled, such as insurance, leave time, and a living stipend?
Steven: I had to do a lot of the legwork to set things up, which was fine by me. I would set up meetings with foreign realtors in addition to my regular visits to the area. I actually found that the local realtors were the biggest help of all seeing that they regularly helped expats get set up. My company paid for my service apartment directly along with offering me a daily stipend. My salary and my benefits were not changed; however, my company did step in to offset some tax adjustments due to a difference in local vs. foreign income tax.
Q: Would you do it again if given the chance?
Steven: Yes. In fact, I'd prefer to do a five-year contract if possible just for the stability factor.
Q: What kind of person would be best suited to do an expat assignment?
Steven: Someone who already works independently within the corporation. Someone perhaps who has had extensive travel related duties. Someone who is decisive, culturally sensitive, and adaptable. You have to be able to build new relationships in the area where you’re stationed.
On the other side of this topic is that of an employer hiring foreign nationals. I recently spoke with Brad Ortman, who is an attorney at law with the firm Rosner, Ortman, and Moss based in Cleveland.
Q: What does your firm do to help a company looking to hire a foreign national?
Brad: Before a company creates the offer, they need to strategically determine the appropriate visa category. I also give them an expectation of cost, and the overall feasibility. There is a patchwork of immigration laws which can be hard for a company to decipher.
Q: What do you see as the biggest fears for the employer?
Brad: When companies are considering foreign nationals, they’ve first looked to the US workforce to determine if there are qualified people who can fill those requirements. When they find that the skill set is in short supply, they tend to look at foreign national applicants. In our American universities, there are a lot of talented foreign nationals, mostly in STEM fields. They’ve established themselves in many cases as the most attractive in their fields. Companies want to hire the best and the brightest. Usually, these students want to stay. There is a synergy in the perfect world. The reason why companies may hesitate even where there are shortages is that they may have a fear of red tape. In my experience, the process has its challenge but it also has its rewards.
Q: Just how difficult is it to hire a recent US college grad who happens to be a foreign national?
Brad: Foreign nationals who graduate from a US college receive one year of Optional Practical Training (OPT), where he or she is permitted to work for one year in the USA. In STEM fields, the duration is extended an additional 24 months. In this scenario, the appropriate visa category is H1-B, but there is a quota, which is the biggest hurdle. The overall quota is 85,000 - 65,000 for Bachelor degrees, and 20,000 for Masters and higher. This year there were 230,000 petitions. It is a lottery based system, and preference is given to higher degreed applicants.
Q: How much more does it cost to hire an international?
Brad: It depends on the nationality of the individual. Some nationalities are not subject to quota and cost less. Those subject to getting an H1-B visa are a little tricky. There is a $2,300 filing fee, a cost which may double with legal fees. If the person is subject to the quota you have to make the business decision whether to do it or not. If a foreign national has been approved previously, they don’t count against the quota. Universities and non-profit hospitals are not subject to quotas.
Q: Is there a recourse or tax deduction for filing fees that are not approved?
Brad: The $2,300 filing fees are returned but the legal fees are not.
Q: Based on the work of your firm what percentage of foreign national hiring would you say happens for large companies vs. small-to-medium companies?
Brad: We represent both. We’ve seen an uptick in smaller firms in the H1-B process. Those firms tend to be firms that export. They sponsor people of the same nationality in the market they want to export with. They want to have a local national working in supply chain. It’s very common for engineers, for IT professionals and even business professionals. There is no bias from a legal perspective of a small company over a large company in this process. There may be a smaller filing fee depending on the number of employees at current the company.
Would you like to learn more? Companies in Ohio join us on May 17th for our final 2015-2016 GlobalReach workshop on Globalizing your Business: Translating Human Resources. Brad and a panel of other experts will answer questions and provide much more on this topic. Click for more info and to register: http://bit.ly/1QCPMvS