European Expansion, Recruiting across the Pond

Advice from experts · 3/13/2024 · 1 min read

European Expansion, Recruiting across the Pond

As the borders of business expand, the already challenging task of recruiting your team is about to increase significantly. The funding journey from Seed to Series C is a crucial phase, marked by ambitious growth targets and the requirement to build high-performing teams. While remote working has exploded in recent years, having international employees for local markets is a key component of most companies' growth strategies. For many US-based startups, international expansion is often represented by recruiting and building teams 'across the pond', setting up camp in Europe.

This blog delves into some of the differences in recruiting in Europe versus the USA, specifically focusing on Venture Capital (VC) backed scaleups where high growth potential is a key driver for investment.

Understanding the European Landscape

Before diving into the intricacies of recruiting, it's essential to grasp the distinct characteristics of the European tech scene. Unlike the concentrated hubs of Silicon Valley or New York City, Europe boasts a decentralized ecosystem, with innovation hubs scattered across the continent. From London's fintech powerhouse to Dublin's post-Brexit EU landing hub and Berlin's startup melting pot, each city offers its own blend of talent and resources.

In addition to these hubs, many more will stake a claim to be the latest 'tech or startup center'. This diversity presents both advantages and challenges for expanding tech scaleups when it comes to choosing where to build out your HQ in Europe.

Investor Expectations and Funding Dynamics

In 2023, funding to European startups reached $52 billion, down 39% year-over-year from $86 billion invested in 2022 (a similar drop to that of the US at 40%).

However, it's worth noting that Europe's share of the venture capital ecosystem has increased since 2021. This has in part been driven by increased US VC interest in the market. Andreessen Horowitz opened their first international office in London in Q4 2023. They joined Sequoia, Lightspeed, and Bessemer, among others in Europe, all looking for their slice of the European startup scene.

There is a difference in the approach to funding across the Atlantic. While the US market often prioritizes rapid growth and large-scale funding rounds, European investors traditionally have tended to be more risk-averse, favoring steady, sustainable growth. This preference for cautious expansion influences recruiting strategies, as companies may need to adjust their hiring plans to align with investor expectations.

Recruiting Strategies in Europe and the USA are Heavily Influenced by Regulation

To execute successful recruitment and subsequent team growth in Europe, it is essential to understand local labor laws and regulations as they vary from country to country.

In many European countries, employment contracts are subject to stringent regulations, with specific provisions regarding notice periods, severance pay, and collective bargaining agreements. A further hurdle, the European Union's General Data Protection Regulation (GDPR), imposes stringent data privacy requirements, adding another task for TA teams to navigate. Entering into these labor markets without understanding these key areas can be detrimental to a company's growth.

In contrast, in the US, companies enjoy fewer bureaucratic hurdles when recruiting talent from both domestic and international markets. Certain aspects of recruitment, such as employment contracts (at-will employment) and non-compete agreements, are simplified, making it easier for employees to change roles quickly.

The issue of work visas and immigration adds another layer of complexity to recruiting talent in Europe. Unlike the US, where the H-1B visa program facilitates the recruitment of foreign talent, Europe's immigration policies vary widely from country to country, with stringent requirements and quotas for non-EU workers.

Europe: A Cultural Melting Pot Where You Need a Recipe to Cook Up Success

Cultural diversity plays a significant role in defining the recruitment landscape. Europe traditionally tends to prioritize stability and work-life balance, with an inclination towards candidates who exhibit loyalty and long-term commitment.

In the US, the emphasis often lies on individual achievements and a culture of risk-taking, leading to a preference for candidates who demonstrate entrepreneurial spirit.

Europe's mix of languages, traditions, and work cultures means you must have a tailored approach to talent acquisition in order to resonate with local talent pools. Understanding local customs and preferences can make or break recruitment efforts, particularly when building diverse teams that reflect the global nature of modern businesses. Applying a 'one-size-fits-all' approach to recruitment across Europe will often lead to disappointment, as anyone who has hired in the DACH market will understand!

Diversity and Inclusion Initiatives

Diversity and inclusion have emerged as critical priorities in recruiting, with companies recognizing the value of diverse perspectives and experiences. In the USA, there is a strong emphasis on diversity and inclusion initiatives, driven by both societal expectations and investor pressure.

European companies are also increasingly embracing diversity, with initiatives focused on gender equality, cultural diversity, and inclusion of underrepresented groups. Prioritizing diversity and inclusion is not only ethically essential but also enhances innovation and competitiveness in the long run.

Europe's cultural heritage is as diverse as its landscape, with each country boasting its own unique traditions, languages, and customs. Companies that take the time to understand and embrace these differences often find themselves better positioned to attract and retain talent. However, cultural differences can also lead to misunderstandings and miscommunications if not addressed proactively.

Looking to Hire in Europe?

In navigating the complexities of recruiting in Europe and the USA, having the right partner can make all the difference. At RocketPower, we get it. We offer tailored recruitment solutions with local teams in both Europe and the USA, bridging the gap between diverse talent markets and enabling scaleups to build high-performing teams efficiently. With our expertise in understanding local cultures, regulatory environments, and market dynamics, we empower companies to unlock their full potential and achieve sustainable growth.

Visit or reach out to me directly to learn more about how we can help your scaleup thrive in today's competitive landscape and cross the Atlantic.