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Hiring Hungarian Software Outsourcing Workers: Risks Can Be Avoided Like This!

Hiring Hungarian Software Outsourcing Workers: Risks Can Be Avoided Like This!

Employing software outsourcing workers from Hungary can indeed help control costs, but it also entails certain risks. With the global economy constantly evolving and labor costs rising year by year, many US companies are turning their attention to the Hungarian market in Europe, seeking more favorable employment prices. GONEX will introduce several aspects that need attention when hiring employees in Hungary.

Hungary, as an emerging market in Europe, not only has abundant labor resources but also relatively low costs, making it an attractive choice for cost-conscious companies. However, in the process of shifting the labor market to Hungary, US companies also face some potential employment risks. Firstly, there are significant differences between Hungary and the US in terms of labor laws, cultural backgrounds, and work habits, which may lead to difficulties in management and communication for companies. Secondly, hiring foreign employees may involve complex legal issues such as visas and residence permits, requiring companies to invest more time and effort in resolving them. Additionally, different countries’ trade unions and labor rights protection systems may also bring additional costs and pressures to companies.

Therefore, when considering shifting the labor market to Hungary, US companies need to fully understand the local market environment and regulations, and formulate reasonable employment strategies and risk control plans. At the same time, companies also need to enhance cross-cultural communication and employee training to improve employee adaptability and work efficiency, ensuring the smooth transition of the labor market and the stable development of the enterprise.

Legal and regulatory risks:

US companies hiring software outsourcing workers in Hungary must strictly comply with Hungarian labor laws and regulations, otherwise, they may face a series of legal risks and economic losses. Firstly, regarding the minimum wage standards, Hungarian labor laws stipulate clear minimum wage requirements, and employers must ensure that the wages paid to employees are not lower than this standard. If companies fail to comply with the minimum wage standards, they may not only face fines but also affect the company’s reputation and employee morale. Secondly, working hour regulations are also important. Hungarian labor laws have clear limitations on daily and weekly working hours, and overtime also needs to be paid accordingly. If companies require employees to work overtime without paying overtime pay or violate working hour regulations, they may face legal sanctions. Moreover, holiday arrangements are also an important part of labor regulations. Hungarian labor laws stipulate various holidays that employees are entitled to, such as annual leave, sick leave, maternity leave, etc. Employers must ensure that employees can enjoy these holidays as required, otherwise they may face legal disputes.

For example, suppose a US company hires software outsourcing workers in Hungary but fails to pay the employees’ overtime as required by local laws and regulations, and also does not provide employees with sufficient rest time as required by law. In this case, employees have the right to complain to the labor inspection department, and the company may face fines or even lawsuits as a result. This not only increases the company’s operating costs but also may affect the company’s reputation and business stability.

Therefore, when hiring software outsourcing workers in Hungary, US companies must thoroughly understand and comply with local labor laws and regulations to ensure that employees’ rights are fully protected, in order to avoid potential legal risks and economic losses. Understanding relevant laws and regulations and reasonably avoiding risks, companies can consult Gonex for free, a global human resources service company, to obtain the latest legal trends and compliance advice.

Salary level:

The salary level of software outsourcing workers hired by US companies in Hungary is generally lower than that in the US, mainly due to the relatively low cost of living and labor market conditions in Hungary. However, this does not mean that the salaries of Hungarian software outsourcing workers lack competitiveness because, with the rapid development of the IT and software engineering industries in Hungary in recent years, the salaries in these fields are also gradually increasing. For example, for software engineers with the same skills and experience, a US company may need to pay hundreds of thousands of dollars in annual salary, while in Hungary, due to different cost structures, companies may only need to pay half or less of the salary. This does not mean that the skills or work quality of Hungarian software engineers are lower, but rather the salary difference is due to differences in market supply and demand and cost structures. However, it is worth noting that although the salary level in Hungary is generally lower, excellent software engineers and IT experts often receive higher salaries. This is because the professional skills in these fields are highly valued globally, and Hungary also has some experts and teams with world-class expertise in the IT and software engineering fields.

Therefore, when hiring Hungarian software outsourcing workers, US companies need to consider multiple factors comprehensively to set a reasonable salary level, including the employees’ skill level, experience, market supply and demand conditions, and the company’s budget and long-term development strategy. At the same time, in order to attract and retain excellent talents, companies can also consider providing other forms of benefits and incentives, such as providing training opportunities, career development paths, health insurance, etc.

Overall, although the salary level in Hungary is relatively low, US companies still need to set a reasonable salary level based on specific circumstances when hiring software outsourcing workers, to ensure both cost control and the attraction and retention of employees with excellent skills and experience. To find more suitable cross-border employees, you can consult Gonex, a global human resources service company, for free, to obtain suitable talents and save labor costs.

Real case:

In 2019, a Chinese company established a branch in Hungary and hired a Hungarian employee. However, shortly after the employee joined, the company found serious attitude problems with the employee and decided to terminate his employment contract. However, shortly after terminating the contract, the company received a letter from the employee’s lawyer demanding a high amount of compensation. After investigation, the company found that the employee had previously filed a lawsuit for discrimination and won the case. Therefore, the improper handling of the issue at the time of termination led to unnecessary losses for the company.

When hiring multinational employees, there are also risks such as employment contract risks, social insurance costs risks, labor relations risks, and tax systems, etc. Gonex believes that when considering saving labor costs, it is more important to consider employment risks rationally, so that companies can truly save costs and expand markets. As a professional consultant in the global human resources service industry, Gonex can help you effectively avoid these problems and risks.


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