Talent without borders: unlocking a diverse workforce

A diverse workforce contributes to a more dynamic and inspiring working environment, in which issues can be viewed from different angles, so enhancing employee performance. In addition to these benefits, some sectors are facing serious labour shortages and can no longer find the skills they need in-country to do the available jobs. This trend concerns not only highly skilled employees – about which we are in the midst of a so-called ‘War for Talent’ – but also some medium to low-skilled employees in sectors such as construction and hospitality. Businesses often therefore have no choice but to try to attract employees from abroad. But having a global perspective of this kind also opens the door to a much wider global talent pool than employers would otherwise have.

Yet hiring foreign employees adds an additional layer of complexity in the recruitment process, as in most countries, foreign employees need a work and/or residence permit/ visa to be allowed to work and reside in the country.

Exceptions may exist depending on the foreign employee’s nationality. This is for example the case in the EU, where employees with the nationality of an EEA member state or Switzerland benefit from the principle of free movement of workers, allowing them to freely move within the EU and work and stay in any other EU member state without a work permit, albeit that some formalities may apply. Non-EEA and non-Swiss nationals, on the other hand, generally require an authorisation to work and to reside in an EU member state, unless an exemption applies.

It is therefore clear that there are both significant benefits and difficult challenges for employers when it comes to unlocking a diverse workforce. The findings of our global survey below illuminate some of the key considerations for those hoping to navigate this complex yet rewarding area.

As regards immigration into the EU, the first thing to note is that (with the exception of the socalled ‘Schengen’ rules) immigration for business purposes is a national matter and it varies in important respects among the Member States of the EU.

For example, some EU Member States such as Austria, Bulgaria, the Czech Republic, Greece, Hungary, Italy, Romania and Slovenia set quotas for outside immigration, whereas no quota applies in countries such as Belgium, Croatia, Denmark, Finland, Luxembourg, Portugal, Slovakia and Sweden. In addition, many EU countries generally apply a ‘market test’ for a foreign employee to obtain a work and residence permit. This is the case, for example, in Austria, Belgium, Bulgaria, Croatia, Finland, Greece, Hungary, Ireland, Lithuania, Luxembourg and Slovenia. By contrast, no market test is required in Italy, but Italy sets quotas to reduce the gap between the number of entries and actual labour market needs. Portugal, the Czech Republic and Slovakia do not impose market tests, but each vacancy must be reported to the authorities. Sweden does not apply a labour market test either, but the employee must first obtain employment before applying for a work permit and moving to Sweden.

That said, most of the EU countries we surveyed have made exceptions to their quota and/or labour market test requirements. For highly skilled workers, for example, Austria, Belgium, Bulgaria, Croatia, the Czech Republic, Denmark, Finland, Greece, Hungary, Italy, Ireland, Lithuania, Luxembourg, Slovakia and Slovenia make exceptions. For workers in a shortage profession or sector, Austria, Belgium, Croatia, Czech Republic, Denmark, Greece, Hungary, Italy, Ireland, Lithuania, Slovakia, Slovenia make certain exceptions, and certain countries (for example, the Czech Republic, Ireland and Finland) make some other exceptions. Even in Sweden, which has no quota and no labour market test, highly skilled employees can expect a faster application process.

Still within EMEA but outside the EU, generally, Switzerland has no quotas for EU/EFTA nationals provided they have an employment contract with a Swiss employer. The same goes for labour market tests. In the UK, there are no published quotas and no market test applies, but sponsors of foreign workers must have a Certificate of Sponsorship and keep evidence of any recruitment campaigns related to a sponsored role or explain how they identified that the sponsored foreign employee was suitable for the role. Ukraine has no quotas or market test. Turkey is similar, but the sponsoring Turkish employer must meet a ratio of at least five Turkish national employees per foreign employee.

As regards more flexible immigration routes, the Swiss make no exceptions to their market test and as regards nonEU/EFTA nationals, access to jobs in Switzerland is only available for senior management positions, specialist, or other qualified personnel and permits will only be granted if to do so is in the overall economic interest of Switzerland (with some exceptions for multinational organisations). In the UK, more flexible routes are available for highly skilled intracompany transferees and leaders in academia, the arts and digital technology, along with seasonal workers in the agricultural and poultry sectors. No exceptions or more flexible routes exist in Turkey, although Ukraine has flexible routes for highly skilled employees, shortage professions and certain other categories of employee.

Outside EMEA we see in the surveyed countries that quotas, but no labour market tests, apply in Kazakhstan, Argentina and Brazil. In Chile, 85% of an employer’s employees must have Chilean nationality, and in Brazil 75% of the employees of a Brazilian company must have Brazilian nationality. India and Colombia on the other hand, have no quotas and no labour market tests, but a Colombian company must inform the authorities as to why a Colombian national has not been considered for the job.

No flexible immigration routes for highly skilled employees or shortage professions exist in Argentina, Brazil or Colombia. Kazakhstan allows permanent residence under a simplified procedure for a list of 51 indemand professions. In Chile, foreign specialist technicians are counted as Chilean employees for the purposes of calculating the 85% threshold. India has routes for highly skilled employees but no list of shortage professions.

Aside from the legal conditions for obtaining work and residence permits, employers must also consider processing times before foreign employees can obtain the right to work and to reside in the country. Within the surveyed countries in the EU, processing times vary between three weeks and six months, with the variations depending on the country and type of permit. In Sweden, the procedure can take up to 16 months but is reduced to 30 days for highly qualified employees.

Most EU countries do not provide a fast-track procedure, but in Ireland part of the process may be faster if the employer obtains ‘trusted partnership’ status with the Department of Enterprise, Trade and Employment. In Denmark, a fast-track procedure is available for employers that are certified by the Danish Agency for International Recruitment and Integration; such that when applying for a residence permit under one of the fast-track schemes, it will generally be possible to obtain a quick job start permit within one to two weeks. In Finland a fast-track procedure is available for those who come to work as a specialist or startup entrepreneur and those with an EU blue card or ICT permit. In those cases, the permit can be obtained in two weeks.

In Switzerland, obtaining a work and residence permit takes one to three months depending on the type of permit and the Canton concerned. In the UK, it takes six to ten weeks depending on whether the employee applies from abroad or within the country. However, some expedited processing options are available in the UK.

In Turkey, the process takes four to six weeks, in sharp contrast to Ukraine, where it takes just seven business days to obtain a work permit and 15 business days for residence permit. In Argentina, a company registered at the National Immigration Registry can apply for service that allows for processing within three to five working days.

In Brazil, by contrast, processing takes 30 to 95 days; in Colombia 30-45 days; and in Chile six to eight months on average. In India, the average processing time for an employment visa is between two and four weeks.

In terms of the fees payable to the various states to obtain work permits for foreign nationals, the UK is by far the most expensive country amongst those surveyed, with a total in fees of up to GBP 11,384 for five years’ permission under the main work route (with some applicants potentially eligible for discounts).

In other countries, fees are much lower. Below EUR 500, we have, for example, Austria, Belgium, Bulgaria, Croatia, the Czech Republic, Greece, Hungary, Italy, Lithuania, Luxembourg, Slovakia, Slovenia, Sweden, India, Argentina, Brazil and Colombia. For around EUR 1,000, we have Denmark, Finland, Ireland and Ukraine. In Chile the fee depends on nationality, with fees ranging from no charge for Spanish nationals to USD 2,890 for Australian nationals.

An element that is often stressful for foreign employees is the relocation of family members. Companies wanting to attract and retain foreign employees should also look at the options for family members to join and whether they are allowed to work once there.

However, in the countries we surveyed, few offer automatic access to the labour market for those joining a foreign employee based on family reunification. Countries that allow those with family reunification status to work for any employer without the need for a separate work permit are: Argentina, Belgium, Brazil, Chile, Finland and Luxembourg.

In Denmark, a separate work permit is required for family members to work for the same employer as the main foreign employee. In Sweden, foreign family members may be allowed to work if the main foreign employee intends to work in Sweden for more than six months. In the UK, family members with family reunification status are generally allowed to work, although there are some exceptions. In Ireland, employment permit holders must complete 12 months’ employment before they can sponsor family members for family reunification.

In most of the other countries we surveyed, family members of a foreign need a separate work permit to be allowed to work in the country. This is the case in Bulgaria, Croatia (although exceptions exist), Greece, Hungary, Italy, Lithuania, Romania, Slovenia, Turkey, Ukraine, Kazakhstan, India and Colombia. In Switzerland, spouses and children under the age of 21 of EU/ EFTA nationals are entitled to work regardless of their own nationality. Some family members of non-EU/EFTA nationals are, under certain conditions, also allowed to work. In Slovakia, family members must apply for a work permit during the first nine months of the foreign employee’s arrival.

Another way to obtain access to diverse talent and a broader perspective is to create a virtual organisation and hire ‘satellite employees’ who telework remotely from their country of residence. As the employee is already living in the country where they perform their work, there are most likely no immigration issues and generally employees already have a right to work there.

Yet, in such cases, employers will need to look into certain other issues, including whether it is possible to employ an employee without any legal presence in the country, whether registration or notification is required, and which local employment terms and conditions and health & safety requirements apply. The employer will also need to check applicable taxes and social security contributions. Questions around the potential existence of a permanent establishment (which involves tax consequences for the employer) should also be examined.

Employees in this post-Covid world also tend to have greater expectations to be allowed to work for some of their time from abroad, be it following a vacation (‘workcation’) or for some other personal reason. This raises the question of whether the employee has a right to work in that country. Since the pandemic, many countries have jumped on this trend and introduced a ‘digital nomad’ visa, and a few others are currently working on one. This is the case, for example, in Argentina, Brazil, Colombia, Croatia, the Czech Republic, Greece, Hungary, Italy, Portugal, Romania, Spain and Turkey. In most of these countries, conditions such as minimum salary requirements, limiting work only to activities for foreign companies, and/or maximum time periods often apply. Other countries such as Belgium, Bulgaria, Chile, Denmark, Finland, India Ireland, Lithuania, Luxembourg, Slovakia, Sweden, Switzerland, the UK and Ukraine do not yet have a digital nomad visa. Meanwhile, Kazakhstan and Slovenia are working on one.

Engaging a diverse workforce is enriching and can also be cost-effective, but there is no shortcut to dealing with immigration issues and companies should think carefully about their strategy to ensure compliance with the law when hiring foreign employees.