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The Pitfalls of International Hiring

Hiring employees around the globe carries risks as well as benefits.

When a company is trying to decrease its labor costs or wants to expand its business presence overseas, hiring employees to work internationally or move from abroad to work at a U.S. location can seem like an attractive option. However, a CFO and the corporate board must make sure they handle the process legally and tactfully, in order to avoid any regulatory or public relations issues later on.

The Atlantic reports that heavy machinery manufacturer Caterpillar announced on Monday that it had experienced an excellent third quarter, with year-over-year profits reaching 44 percent higher. However, as Caterpillar and other strong-performing corporations seek to make their recent successes sustainable, more of them are looking beyond American shores, which could be a bad signal for the domestic economy.

North America only generated about one-third of Catepillar's revenue last quarter.

"U.S. corporations can benefit from a mining boom in Brazil and shopping malls in China," the source concludes. "But unless America can get its own economic house in order, those companies aren't going to share the rewards back home."

Violating hiring laws - or just manipulating them - can also cause problems for corporations. The Oregonian reports that a company that had won a federal forest clean-up contract (intended to create U.S. jobs) actually exploited loopholes in the law to hire foreign workers instead. The practice is not illegal, but does run afoul of "the spirit and purpose" of the U.S. stimulus program.