Preparing to expand from the UK into Europe is an exciting prospect, but it can also be overwhelming. With drastically different laws and regulations in place regarding hiring, staffing, training, payroll, and HR management, expanding into Europe from the UK takes a lot of work.
There are many stages to get through before your expansion is fully operational and your business is up and running in Europe. At the earliest stages, it can feel almost impossible to get it all done.
Finding the right support for your expansion is key to your success.
One of the most important steps in preparing for your expansion is to perform a comprehensive HR audit.
Audits provide:
- A measurable baseline of your current operations
- Holes in your current HR methods and strategies
- Information about non-compliance with local and national laws
- Details about workflow redundancies or inefficiencies
All companies that are working on expansion plans need to do an HR audit, regardless of how big or small they are. Audits are especially important for UK companies that are expanding into Europe.
Europe HR will perform a comprehensive HR audit to prepare your UK-to-Europe expansion
Our HR audit services are an essential part of expanding into the EU.
Important details about our audits:
- They are performed by highly trained and experienced HR professionals
- Our team is multilingual
- We can perform the audit as a standalone project or come on board as your dedicated European HR team
- HR audits are complicated, but we know how to do them right
Our central goal is to help you successfully expand into Europe, which involves identifying all of the ways that your UK operations will need to change in order to be successful in Europe.
How does Brexit affect a UK-to-EU expansion?
Our team also has extensive experience navigating the business landscape changes that have occurred in the UK because of Brexit.
We know that some businesses were already operating in both the UK and Europe, and they have had to make adaptations to their HR operations in order to be compliant in both places.
Other companies were mid-expansion when Brexit changed the business landscape in the UK, and they have had to pivot significantly to manage these changes.
Since Brexit, start-ups in the UK have had two sets of laws to navigate: existing and new UK laws, plus EU laws that don’t expire in the UK until the end of 2023. If these start-ups functioned in compliance with UK laws, they will need to create all-new compliance measures to expand into Europe.
The Stages of An Audit
HR professionals have developed an HR audit process that is thorough, detailed, and comprehensive. The three stages (Planning, Audit, and Analysis) are all time-consuming and important.
Understanding the three stages will help you prepare for your expansion.
Stage 1: Audit planning
The audit stage sets you up for everything else. Without the audit planning stage, nothing else about the audit will take shape.
There are several steps to audit planning.
Choose your team
Even if you make the wise decision to outsource your HR audit, you still have to choose who is going to be part of the audit team.
Your audit team should include:
- Your outsourced HR professionals
- Someone from your internal HR team
- An in-house or outsourced legal representative
- Subject matter experts for each industry (manufacturing, tourism, retail, tech, etc.)
- An executive team member at your company
- An administrative support person who can contribute to the audit’s general support tasks
Determine the audit’s scope
You may have noticed that we mentioned that we do comprehensive audits of your HR operations, but there are actually lower-level audits that can be completed instead. For example, if you have already been following EU laws because you were in business before Brexit, then you may need a smaller-scope audit.
We are happy to adapt our processes to as much or as little as you need.
These are some of the kinds of audits and sub-audits that may need to be implemented during your expansion:
- Payroll compliance
- General payroll audit (including wages and salaries)
- Corporate structure
- Overall compliance assessment
- Corporate restructuring prep
- M&As (Mergers & Acquisitions)
- Labor practices
- Supplier compliance
- Corporate social responsibility & ethics
- Worker data privacy
- Immigration compliance
- Registration forms
- Liability audit
- Industry-specific audits
Create a LOT of checklists
Even though there are plenty of similarities between business practices in both the UK and Europe, there are also many differences.
These differences will affect you daily, and so one of the best ways to go about an audit is to examine every single aspect of your business’s operations. After determining which audits are necessary, create a series of checklists related to each area you will be examining.
Can I just use a checklist I found online? That’s a great question, and we can understand the temptation! There are quite a few cookie-cutter templates online that you can download, but these tend to be incomplete or even irrelevant to your specific industry or expansion.
When we work with you, we will create an entirely new audit plan that is unique to your business and your UK-to-Europe expansion plans.
One great strategy is to create a master checklist that will eventually be divided into many sub-level checklists. This strategy works especially well when you have a great time, because you can divide the subtasks up among multiple people or committees.
Each individual or subcommittee will only need to focus on a small part of the overall task, thus avoiding the likelihood of your in-house audit team becoming overwhelmed.
Your checklist is likely to include:
- Insurance
- Contracts
- Local laws in cities where you will conduct business
- Payroll
- Payroll deductions
- Corporate tax laws
- Statutory leave (often called “leave entitlement” in Europe)
- Benefits and compensation
- Employee incentive plans
- Tuition benefits
- Rules related to discrimination and harassment in the workplace
- Diversity, Equity, and Inclusion (DEI)
- Response to accusations of discrimination against protected groups
- Recruitment
- Interviewing
- Onboarding
- Overtime
- Severance pay
- Internal investigation procedures
- HR policies for responding to employee complaints
- Whistleblower protections
- Formal investigation procedures
- Collective labor laws
- Collective bargaining agreements
- Policies for managing labor disputes
- Pension and retirement
- Works agreements with the European Works Council
- RIF (Reduction-in-force) policies & procedures
- Headquarters
- Mandatory cost of living and inflation-adjusted raises
- Succession planning
- Employee handbooks
- Required posting of information
- Pandemic & global crisis plans
- Contract language
- Security protocols
- Data privacy laws for handling and protecting employee data
- Notifying employees of a data breach
- Working with contractors
- Immigration policies
- Visas and permits
- Expatriate compliance
- Duty of care protections for business travel
- Duty of care protections for personal injuries on the job
- Compliance with overseas supply chain labor monitoring
- Modern slavery due diligence (similar to the UK Modern Slavery Act 2015)
This list may not be comprehensive, but it should give you an excellent starting point for many of the operational areas your audit will examine.
Each of these items will be accustomed by a checklist with subtasks and responsibilities.
Stage 2: Conducting the audit
If stage 1 was a lot of work, stage 2 is going to be even more work–but not necessarily for you! At this stage, the HR audit becomes incredibly granular. However, the biggest responsibility falls on the person or group you have tasked with conducting the audit.
At Europe HR Solutions, we manage the audit so that you can keep doing your job!
We manage each of these stages from start to finish. When you outsource this process to someone with experience and knowledge, your responsibility is to make sure that they have all of the information they need.
You will spend a lot of time gathering information, providing documents, and answering questions. By the end of Stage 2, you will have a complete audit of everything you are currently doing and what needs to change in order to be fully prepared for your European expansion.
Why shouldn’t you “save money” and perform the audit yourself? Self-auditing your business comes with a lot of risk.
Those risks include:
- Missing small but important details because you don’t already have decades of experience working with European laws
- You may end up wasting a lot of valuable time researching each aspect of the audit, simply because you don’t have the required knowledge to quickly understand each component
- You will not be fully in compliance with European authorities, thus jeopardizing your expansion plans
- You will be stuck paying for costly mistakes because of non-compliance
You are not going to save any money through non-compliance. Those small mistakes can add up. Just take a look at the list of companies who faced major fines in Europe for non-compliance. Meta topped the list with a €405 million fine in Ireland for data privacy violations. Many other companies saw fines that were in the €10-20 million range.
For small and mid-sized companies, these fines can spell the end of your operations.
Stage 3: Audit analysis
Imagine going out and buying all of the ingredients for a brand new recipe, coming home and cooking an exquisite meal, and then letting it sit on the table, completely untouched.
That is what it’s like to complete an audit but never really analyze it! You have to use all of this valuable information that your audit generated if you want to have a successful expansion to Europe.
The analysis stage provides you with an excellent foundation for identifying what is working well and what you need to change about your business. From here, you can develop a series of action plans to bring your current policies and procedures into full compliance.
These 5 questions will help you understand and respond to your audit:
- What are our strengths, and how can we continue to perform at a high level in these areas?
- Which policies do we need to create in order to be compliant with European employment law, as we don’t currently have any governance in these areas?
- Which policies do we need to revise so that we are in full compliance?
- How long do we have to complete these changes, and how can we ensure that everything is completed in a timely manner?
- Who are the people or departments responsible for facilitating each policy change?
Europe HR Solutions offers comprehensive audits to make your expansion work
Your expansion into Europe is an exciting opportunity. Don’t lose out on this opportunity because you aren’t fully compliant with Europe’s employment laws and HR regulations.
Europe HR Solutions will help you navigate the complexities of European labor law. You don’t have to try to figure it out on your own.
Instead of struggling, trust our experienced and knowledgeable HR professionals to perform your audit. We provide thorough, detailed, and comprehensive audits to our clients so that they can move their business into Europe as quickly and efficiently as possible.
Our auditing team works hard to give you the chance to focus on other aspects of running and growing your business.
Contact us for a free consultation!
