Spain’s strategic location and strong trade connections with EMEA countries make it an ideal market to expand to. This is especially true if you’re looking to gain a foothold in the greater EU market. However, hiring local talent in a new country can be challenging. You might be wondering where to even start, however, there are many ways you can ease the process.
This article gives you the information on why you should hire from Spain’s diverse talent pool. We also discuss how to proceed with the hiring process, and any potential risks to avoid.
Three Reasons Why You Should Hire in Spain
A Powerful Economy
As of 2022, Spain’s economy is ranked 14th worldwide and 5th in Europe. Last year even saw an unexpected growth of 5.5%. At the same time, many other economies struggled in the aftermath of COVID-19 and the ongoing conflict in Ukraine.
This positive growth in 2022 is expected to carry over into 2023 and give the country a strong start for the year.
A Strategic Location
Because of its geopolitical presence, Spain has clear trade connections with Africa, the Middle East, the rest of Europe, and Central and South America.
Having local talent on your staff team and establishing yourself in the Spanish market opens doors for opportunity and growth with dozens of other trade partners.
A Strong Tech Leader
Barcelona is known as the startup capital of Spain. The city and its surrounding area are the most active startup hub in the country and a burgeoning center for innovation and investment.
Madrid is also a major hub for many tech-based startups and entrepreneurs. The Spanish government offers tax incentives and assistance to R&D initiatives and technological inventions.
The Top Industries in Spain Right Now
Spain boasts a wide and diverse talent pool and certain industries stand out as particularly dominant, such as:
The tourism industry in Spain represents at least 11% of the economy. In 2019-2020 rankings, Spain was the number one tourism sector destination for Europe and number three worldwide. Spain is also home to the headquarters of the World Tourism Organization (WTO).
France, Germany, and Italy are the top destinations for Spain’s export trade. Agricultural products such as wine, olives, and fruits, as well as pharmaceutical goods and automobiles, are all among the top exports.
Pharmaceuticals and automobiles are the main products being manufactured and exported from Spain. The country ranks second in all of Europe for automobile manufacturing. Many global automobile companies such as Nissan, Toyota, and Renault have operations in Spain. In total, the automobile industry accounts for around 10% of Spain’s GDP.
What You Need to Know About Hiring Employees in Spain
Living costs and minimum wage are much lower than in many other EU countries. This allows global companies to reduce costs while still providing attractive offers for potential candidates.
When starting the hiring process in Spain it’s important to make the most of local job boards. Alongside Indeed and LinkedIn, there are also Spanish sites like iberoempleo.es, infojobs.net, empleate.gob.es, and infoempleo.com.
Utilizing local job boards allows you to make direct connections with local candidates from many industries and businesses.
Having the right knowledge of local best practices can really help to expedite the whole process. One-on-one interviews are standard procedure in Spain and can be held in person or online. While you can ask about the candidate’s salary at their current or former job, they don’t have to tell you. Additionally, a 10-20% salary increase when changing jobs is considered standard.
Written full-time employment contracts are required in Spain. However, many industries have CBAs (collective bargaining agreements) that determine details such as employment benefits, paid time off, termination process, severance pay, etc. You must be aware of any CBA regulations you need to adhere to when hiring a new employee as these typically trump national regulations.
Fixed-term contracts are rarely used, and indefinite contracts are considered the norm. If you want to hire someone on a short-term basis, then you can sign a temporary contract which typically runs from 6-12 months. Recruitment agencies and third-party organizations can help to provide you with temporary workers while also handling all payroll and administrative tasks.
Disadvantages of Hiring in Spain
The language barrier in Spain could be an additional obstacle when it comes to working with local businesses and hiring local talent. Spain features an often confusing mix of regional languages and dialects, meaning you may be left out of the conversation if you aren’t able to follow the local way of speaking.
You may need to hire a translator to ensure that communication between all parties goes smoothly and confirm there’s no chance of any misunderstand ings.
The registration process for setting up a company subsidiary or branch can also take a great deal of time. You have to apply for an NIE (Número de Identificación de Extranjero, or the foreigner’s identification number) before you can process any kind of payment, including taxes.
Partnering with an employer of record (EOR) can streamline setup and reduce wait time. An EOR acts as the legal entity so you can quickly enter the Spanish market and hire new employees immediately.
Recruit Easily with INS Global and Our Spain EOR
Recruiting, onboarding, and maintaining smooth operations for all your employees in Spain can be a challenge, especially for a global business with branches in more than one country.
Spain has more than 30 tax treaties with countries across the world to help new companies avoid double taxation. Knowing about these treaties and how to utilize their benefit is just one way you can simplify your expansion process.
INS Global is uniquely equipped to be your expansion partner. We have nearly 2 decades of experience in assisting companies of all sizes and across diverse industries. Our legal team is knowledgeable about local lab