When your water cooler is actually a set of water coolers in 40+ countries like at DLA Piper, water cooler talk must be digital. News reports of changes in France’s labor laws — Code du Travail – prompted speculation (and debate) among DLA’s attorneys on which countries now provide the best climate for business expansion after looking at both economic and legal factors in combination. Bets were made and a template was agreed upon for each competitor to research from.
Here is how the US looks on that template on a scale from 1 (best business climate) to 10 (least promising climate).
Economic/Political Stability: USA has been #1 on the A.T. Kearney Foreign Direct Investment Confidence Index for 5 years running
Labor Costs: Productivity is key: USA is #5 in OECD – more “bang per buck” than any other country on this competition
Corporate Tax Rates: USA’s effective tax rate is 18.6% but more than 2/3 of US corporations pay no tax
Ease / Cost of Set Up: World Bank ranks USA first among larger countries and in top ten overall in this category
Talent Pool: 40+% college educated + more patents filed per year than any other country + availability @ OECD and G-7 averages
Labor Market Regulation:
Key HR Legal Considerations: Employment at will = maximum business flexibility (e.g., no equivalent to “Transfer of Undertakings: Protection of Employment” regulations (TUPE) that are commonplace in the UK and the EU
Evaluative scores for the other participating countries (ranked from lowest/best score to highest/worst score) on that business pain cycle entailed individualized judgment. Each participant attempted to pinpoint how difficult the employment laws in his or her country were. Those scores initially ran as follows:
- USA – 1.5
- UK – 3
- Romania – 3
- UAE – 4
- Spain – 4
- France – 4
- Netherlands – 4
- German – 5
- Australia – 5
- China — 7
Circulation of those scores (which were submitted by each participant simultaneously to the London office for tabulation) triggered further debates, which may continue until Christmas. Comments from the wagerers/debaters illustrate the difficulty of such transnational comparisons as well as their depth of knowledge of the laws in each other’s countries:
- “Are you saying France is only a 3? If so, Australia must be a zero then!”
- “UAE should come down to 2 – limited unfair dismissal regulations and discrimination regulations plus no unions.”
- “I thought that in Spain we suffer more pain than in the UK but less than in France; I need to recalibrate Spain.”
- “The world has gone mad! Given these ratings, Germany must be a 2.”
Passion runs high in the best professionals. Here, however, there is not only passion but the willingness to do the research to confirm each point. That is why I love working with (and debating with) my international colleagues, who are wicked smart and who track not only what happens in their own country but globally. This crew is a truly talented team regardless of how you score each country.
But, you can see that for yourself. These debaters are among the contributors to DLA’s new Guide to Going Global, which contains additional information about employment and labor law basics in 56 jurisdictions throughout the Americas, Asia Pacific, Europe, the Middle East and Africa.