Euro Startup Guide: 6 Steps to HR Success

1. What are the Legal requirements for a start-up in Europe

There are several types of secondary establishments: branch; agency; subsidiary company. The degree of legal independence depends on the type of establishment. Many of the requirements and procedures for opening a secondary establishment are the same as for starting up a business.

Administrative procedures

A business has to choose a legal form. It is important to make the right decision since the choice of the legal form affects aspects such as a business’s tax liabilities, etc.

Before you begin to hire staff, you need to start implementing effective HR policies and procedures. By having these solidified and in place before you’re operational, you’ll save yourself a lot of stress and headaches down the road.

You also have to choose a name. The name must be unique in the particular sector and region in which you are operating and comply with the company names act.

Registration

Businesses must sign up the Local Chamber of Commerce’s trade register within one week of the business’s start-up date. Additional rules apply to foreign businesses opening a branch in the specific country. Businesses must register with the Tax Authority. a new business must be registered even if the owner already is for another company.

Businesses must agree an employment contract with any new staff they hire and comply with its contractual  conditions:

  • drawing up employment contracts
  • conditions  of employment

Regular duties

Each year, businesses have to submit the latest copy of their annual accounts to the trade register in the same form they are obliged to use when disclosing these in the country of their head  office/establishment.

2. Recruiting your first employee in Europe?

Compared to the estimates made by experts, it takes around 10 days to become informed about various specific country contacts & procedures and comply with them. This may prove even longer when dealing with European market expansion and reorganization for an HR enterprise that’s assisting you.

It’s a cliché, but good people can be your most valuable asset. they bring knowledge, experience, enthusiasm, desire and commitment to the mix, while employing the wrong person can prove disruptive and costly.

Decide on job title & job description

List main tasks, responsibilities and objectives, as well as wages, hours, location and basis (ie full time, part time, fixed term or temporary).

Write a person specification, but focus purely on the job’s requirements. Include knowledge, skills and qualifications – essential and desirable.

During recruitment, you can’t discriminate on grounds of race, gender, marital status, sexual orientation, age, disability, religion or belief, etc.

Advertise or use a recruiter

Use your network through social media, get in contact with qualitative and inexpensive niche recruiters on a country level.

Interviewing candidates

Shortlist candidates whose experience, knowledge and skills match those you seek and have an European consultant identify the legitimacy of the education & experience.

Making your decision

Send the candidate a letter of intent confirming your offer and terms of employment.

3. Hiring your first employee?

Looking to bring your first employee on board? You need to understand the legal & tax requirements of hiring staff in Europe so you don’t hit any rough waters down the line.

Recruit personnel initially in the EEA: You are obliged to recruit personnel initially in the European Economic Area (EEA) and/or Switzerland. Only if you prove that you cannot find suitable personnel here, you will be permitted to recruit from other countries.

Verify and register the identity of your employees you are obliged to verify the identity of all workers on the basis of an original identity document when they join your company. you must keep a copy of the identity documents in your records.

Register as an employer with the tax administration. If you are employing personnel for the first time, you must register as an employer with the Tax and Customs Administration. You will then receive the necessary forms to meet your payroll tax obligations.

Ask your employees for a tax and social insurance number: Foreign employees who do not have a citizen service number must provide you with a tax and social insurance number. They themselves must apply to the tax and customs administration for this number.

Enter into a contract of employment: in a contract of employment, you specify the employee’s salary, indicate whether a Collective Labour Agreement applies, outline working hours and holidays, and indicate whether you arrange an employee pension scheme and or other local benefits.

Provide healthy and safe working conditions: as an employer, you must ensure a healthy and safe work place for all your personnel. The Labour Inspectorate or your sector organization can provide you with information about the rules.

Check whether you are required to deduct social insurance premiums: you must deduct social insurance premiums for employees who work permanently in Europe. You can choose to become a self-insurer for  the occupational disability & death insurance, travel insurance, health care and or other insurance schemes.

Obligations regarding reporting and documentation regular statistical reporting duties related to employment; special obligation regarding information and documentation;

Obligation to maintain a personal register; obligation to inform employees of the conditions applicable to the contract or employment relationship;

Obligations in case of a dismissal: regular obligation to justify dismissal; obligation to pay compensation in case of a dismissal for economic reasons; Observation of a specified notification period for the dismissal during the probationary period; other obligations part of employment handbooks special obligations regarding the calculation and registration of the working time (in addition to what is necessary for business reasons);special obligations regarding the calculation and registration of  holidays.

Obligation to join a certain organization / association when becoming an employer.

4. Require a step plan for Benefit & insurance planning and maintenance in Europe?

Which benefits should you offer in a competitive landscape?

Just how does one sort through and manage all the developments affecting employee benefits when they occur outside of the US or any other foreign country?

Among other considerations, there are pensions, social security, government mandated benefits, taxation, remuneration and termination indemnities. Each has different requirements from country to country. It is best to follow and use local marketing practice and international brokers & lawyers network.

Benefit planning and maintenance step plan: Establishing corporate aims and strategies. Identifying current or future arrangements and commenting on their validity in line with corporate practices and market trends of medical devices. Designing and implementing new or revised benefit plans. General administration of benefit plans. Ensuring legislative requirements are met. Risk analysis of insurance policies and multinational pooling considerations. Update of local surveys and their interpretation. Communications for employees through booklets, leaflets, announcements, etc.

Optimize benefits with software for mid-sized companies. If your business has a mid-sized team of talent, consider budgeting for and then implementing benefits software to create a seamless package offer and employee sign-up process.

5. Need to set up international payroll services?

In today’s global business world, paying employees on time – in different countries – is anything but simple. Managing international payrolls is highly complex and resource intensive.

It is important to choose the appropriate partner who understands the time and expertise required to:

  • Deliver multiple local payrolls
  • Calculate pay based on various employee  classifications
  • Track different payroll cycles and calendars
  • Manage local holiday schedules (including bank  holidays)
  • Distribute funds to employees, tax authorities and social programs in multiple countries in the appropriate  currencies
  • Capture disparate data into multiple corporate systems

Responding to unforeseen local issues and assuring compliance with local government requirements are challenges that even the most experienced employers face.

Local partners make the complexities simple for you. They  eliminate the headaches and frustration of managing international payroll for international clients in various European countries.

6. Need for a Local employee communication info pack?

It is important to develop a rolling communications plan to ensure you regularly and consistently let employees know what the content of their rewards package looks like, how potential legal changes can affect their benefit plans. Outsource a tailor-made communication pack for your employees in several  European countries.

The role and impact of a Human Resources consultant can positively affect your business and can help ensure your company’s European expansion is seamless. At Europe HR Solutions, we’ve helped many small and mid-sized companies make the leap from the US and UK markets to European countries.

Business owner surrounded by paperwork, indicating the need for HR outsourcing

How outsourcing HR can save money

If you own a small or mid-sized business, you understand how frustrating it can be to spend time and money on tasks that don’t generate revenue. The costs of building an HR department from the ground up can prove astronomical. 

When you’re launching your small business in a foreign country, especially, you’ll need HR solutions before you open your doors for daily operation. Europe HR Solutions can help.

 

The right outsourced HR team can reduce your ongoing costs in the following ways:

  • Payroll administration:

By outsourcing your HR, you can bring in vetted professionals to set up and administer your payroll system. This team can train you to ensure a seamless transition after their service contract is completed. 

You won’t have to stress over hiring long-term employees to take care of payroll, or training payroll administrators.

  • Benefits implementation:

Your outsourced HR team can help you to select the right benefits software package and enroll the employees of your small business.

  • Human resources management:

Outsourcing your HR can prove to be a game changer for your overall human resources management, too. HR consultants contribute through a wealth of experience in compliance, employee relations, and recruitment.

This saves valuable time for small business owners, mitigates the risk of legal issues and delays in operations, and provides access to the latest industry best practices and trends.

When it makes sense to outsource HR for small businesses  

International companies with fewer than 50 employees are considered small businesses, and rarely expand to Europe with an inhouse HR team already in place.

For US and UK-based small businesses that launch European operations, there’s usually a CFO who oversees broad HR tasks. 

However, the CFO or other executives managing HR for a small business launch in Europe often lacks the country-specific legal and HR expertise necessary to ensure innovative solutions that reflect the country’s best HR practices and legal compliance.

It’s important to consider the following when determining whether or not you should outsource your HR:

  • What specific HR services and support does your business require?
  • Do you have anyone on your team who’s well-versed in country-specific employee regulations and labor laws?
  • Will you need management compliance training and support?
  • Will your current employment handbook, policies, and procedures translate to adhere to the needs of employees in different countries?
  • Do you have a small HR department in place that may need help implementing payroll, benefits, training, and development?
Time is money. Outsourcing HR saves time, letting you focus on what matters.

What to expect with Europe HR Solutions

By outsourcing your HR, you may find it’s easier to take care of your daily operations and to strategize and prepare for the launch of your small business in Europe. Europe HR Solutions has supported countless small, mid, and large-sized businesses in their international HR needs.  

Whether you need our team to manage your HR and implement solutions, or you need us to help guide the HR professionals you have on staff, we can sweat the small stuff to ensure your big picture remains intact. 

You can expect Europe HR Solutions to do the following:

Act as your representatives:

We’ll act as an extension of your small business. This means we will collaborate with you and ensure we’re promoting your vision and standards in any HR matters we handle for you.

Ad hoc requests:

We understand that you may have ad hoc requests. We’re used to fast-paced, high pressure situations, and will ensure your needs are met in a timely manner.

Assist with HR strategies:

We’re committed to providing HR services that help your business grow and succeed. We’ll make certain that the innovative solutions we offer adhere to your overall business and HR strategies.

Create and implement policies and procedures:

We’ll strategize with you to create and implement your company’s policies and procedures and ensure details are in place that will help your employees thrive and create a positive work environment.

Handle employee contract needs:

We’ll help to create and manage your employee hiring processes (including talent acquisition, interviews, and onboarding checklists), employee complaint procedures, performance reviews, and off-boarding processes.

Legal compliance:

Europe HR Solutions will use our thorough knowledge of the various nuances in employment regulations and labor laws to keep your operations, policies, and procedures within legal compliance. This will help reduce your liability risk should issues with employees arise.

Manage employee and management training and development: 

We can cover government-mandated and specific position training programs to support your employees to work with excellence and grow in their positions. This includes compliance training for managers.

Recruitment: 

We can utilize the latest in talent acquisition trends and industry best practices to make sure you attract the talent you deserve to fill your staffing needs. We want to help you to build the best team possible to create a positive work culture and  a productive team.

The cost of outsourced HR services for small businesses

When to outsource your small business’s HR could be determined by your available budget. The cost of outsourcing your HR may be an upfront expense, but in the long run, it can save you significant money and protect your revenue.

The services offered by Europe HR Solutions can vary in cost, and are dependent on the extent of service you require. We can determine the cost based on the scope of the project.

For example, you may need us to manage a specific, well-defined project that allows us to estimate the cost involved. However, you may require our services on a daily basis, for an extended period of time, or find you need support in an immediate HR emergency. This may mean we will need a retainer payment or charge for an hourly rate.

How to determine your HR outsourcing needs

Before you decide to outsource your HR, it’s vital to determine what type of services you require. It can be overwhelming to discern your needs, but reflecting on and strategizing about specifics can be beneficial.

Answering the following questions may help you to understand what services you require:

  • Do you need an outsourced HR professional who takes the time to know and understand your business, staff, and culture?
  • Do you need HR professionals who are available on a daily basis?
  • Are you in dire need of help with critical talent acquisition?
  • Do you require flexibility and a large scope of HR tasks?
  • Are your needs limited to legal compliance and knowledge?
  • Do you need help developing your workplace culture?
  • Do you need to overcome language barriers?
  • What are your long-term HR needs?

Other benefits of outsourcing your HR

Once you’ve determined when to outsource HR for your small business, you may find that it allows you to streamline your operations and focus on your overall business strategy.

This strategic move reduces your administrative burdens of managing payroll, benefits, and other HR tasks in-house. The cost-effectiveness of outsourcing becomes evident as it eliminates the need for investing in HR infrastructure and ongoing training. 

This newfound flexibility can enable your small business to adapt quickly to market changes and allocate resources more efficiently. Ultimately, an outsourced HR team becomes a strategic partner, and empowers you to prioritize your employees, enhance organizational efficiency, and thrive in the competitive European business landscape.

Contact Europe HR Solutions

Europe HR Solutions understands how crucial HR is to the foundation of any successful business. We can consult with you to determine when it’s best to outsource HR for your small business, and customize innovative solutions with you. 

Your HR needs remain our greatest priority, and we want to support you in ways that promote legal compliance and allow you to see your small business dreams come to fruition. 

Connect with Europe HR Solutions today for a free consultation and be sure to check out our blog for the latest HR insights, tips, and trends. The road to success for your small business is just an HR step away.

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    Author

    Inez Vermeulen

    Inez Vermeulen

    Inez Vermeulen is the Founder and CEO of Europe HR Solutions, with over 25 years of successful corporate and entrepreneurial experience in various global industries. She has helped grow and expand the European divisions of global companies such as Coca-Cola Company, Regus, DHL, American Medical Systems, etc. Inez has received several company awards for her entrepreneurial spirit and success.

    She owns a Bachelor’s degree in French, History and Latin, several HR global expert certifications, a Master’s degree in Metaphysical Sciences, ICF Coach Certification and has completed her Doctorate on Transformational Leadership. Inez is fluent in Dutch, English, French, Italian and German. She works in partnership with an extensive international network of independent & professional companies and resides in Belgium near Brussels with her husband Jan.