My 5 Biggest Takeaways from Building a Factory in the US as an Expatriate
From recruiting to business culture, benefits, and payroll – Here is what I’ve learned about the U.S. system & culture
Imagine this: sitting across a table full of experienced businessmen in South Carolina, I am the new CEO of a just opened bag-in-box factory (Aran Group), a woman, an expatriate in the US., and bald. This is the kind of experience you never forget, especially since throughout the entire meeting, those sitting across the table were constantly referring to my colleague who was sitting next to me, even though he wasn’t the one calling the shots.
But this isn’t a memorable experience just from a feminist perspective; it was my absolute lack of understanding of the American business culture, language, and social etiquette that resonates with me. I had a lot to learn, and I was just getting started.
The US unique approach to everything from employee motivation, the incredibly complex benefits, HR, and payroll systems, and the cultural differences, have all taught me a great deal about setting up a company in the US., and bringing it to success. My journey was full of pitfalls and failures, but it was well worth it.
Here are some of my biggest takeaways from this journey:
- First three years: Take a deep breath and ask as many questions as you can
My first advice to leaders setting up their first US locations is to be patient and understand that the first three years are the hardest. The culture, the payroll, benefits, insurance, and HR systems are all so different from other places in the world, and it takes time, patience, tolerance, and humility to learn how it all works, what drives and motivates people, and what is expected from leadership position holders. And, of course, advice – having local professionals guiding you through this initial learning curve will save you a lot of costs and frustrations.
- Employee loyalty & motivation is a hard objective, but priceless
Back in that first year, I remember how hard I tried to give the employees the choice to rotate their shifts. I thought they would benefit (and appreciate) working night shifts for one week, and changing to day shifts the next week. It came as such a complete surprise to me when I finally realized employees were quitting often because they felt they didn’t have schedule stability that they’re so accustomed to from other factories. It became clear that most of them preferred working the same shifts on a weekly basis. I couldn’t wrap my mind around this one at first, but that’s when I realized that my employees were driven by a fundamental motivation that rises above anything else (benefits-wise), security and stability.
As a former head of HR, getting employees to be dedicated to their tasks and motivated enough to perform and deliver the best results, is key to making a company thrive. Which is why I believed this should be a key factor in our US-based factory. However, as I soon found out, as opposed to Europe and other places in the world, US employees’ financial security and stability is considerably dependent on the employer. That’s why when we talk about motivational factors, we need to first understand that unless we provide our US employees with the fundamental financial security they need, it is going to be challenging to ask for their dedication and motivation to meet company’s objectives. Because the US benefits system works so differently than other places in the world, and benchmarks for low-tech industries are substantially less beneficial than other countries, it is up to the employer to build a comprehensive-enough package, to both keep employees under your roof, and ask for motivation and dedication in return.
- Benefits, insurance, and payroll – hire a local company, not necessarily the biggest
It’s no secret that all three aspects in the US can seem puzzling to non-Americans. The best step I’ve done during my first few months, was hire local providers to help build, streamline, and execute three essential policies: HR, Benefits & Rewards, and Payroll.
The first thing we asked for was to get a benchmark of what other factories like ours offer across South Carolina. We needed the benchmark to understand what are the basic packages and how to offer a competitive one that would attract employees’ onboarding and retention, not just from a salary perspective, but from a benefits perspective as well. To our surprise, it was easy enough to be competitive, since so many insurances and benefits are not mandatory by law (as opposed to Europe, for example), but rather entirely optional:
Our edge: Health, paid maternity leave, 401K, and disability insurance
One of the game-changers, as we soon found out, was an attractive health plan. But what positioned us even higher in the industry was our paid maternity leave policy, which (amazingly) was, and still remains, a rare perk in the low-tech industry. Another benefit we found that stood out among others was the 401K, i.e., the American version of a retirement savings plan (pension), and our short and long term disability insurance.
- Build and distribute a company’s handbook
I can’t stress this enough; one of the first steps HR leaders should do when opening their US locations is set up this basic guide to provide all of the information about the company’s policies in one place. This way of conveying company policies in the most transparent fashion will help facilitate a trusted relationship between management and employees, which in return plays a vital role in establishing employee commitment and loyalty to the company.
- To find the right talent – get candidates to leave their comfort zone
I’ve always considered myself a good judge of character and skills, and I am highly experienced in evaluating candidates for different company positions. And yet, here too I was in for a surprise. I’ve had to change the most important position in my factory – my Chief Production Officer – three times in a row (!) because I got it wrong in the interviews. My tip here is to both hire someone local to conduct the interviews with, and to try to bring candidates out of their comfort zones. Most of the candidates I’ve met with came well prepared to the interviews and answered every question ‘by the book.’ It was only when we challenged them with out-of-the-box questions, while ensuring a comfortable and safe atmosphere, that we were able to get a deeper glimpse into their character and skills.
The most important lesson of all
The years I’ve spent as an expatriate CEO of an emerging bag-in-box factory in South Carolina, taught me a great deal about flexible management approaches, how to be creative and open minded to other cultures to get the best out of your employees and partners, and many other lessons about humility and empathic management. But I think the most important lesson of all, is that despite all of the cultural differences and the unique US regulatory systems – wherever we go, our relationships with our employees should always be based on trust, transparency, and leading by example.
Hila Frish is the VP of Global Business Development at ORCA Global Leadership and Networking.