Houston, we have an HR problem: Why European HR strategies stumble in the US — guest column

Many European companies expanding into the US market expect a smooth ride. After all, if they’ve scaled successfully across Europe, it’s easy to assume the US market will be similar. With its global mindset and English-speaking workforce, it seems like familiar territory. But that assumption often unravels quickly.

In a guest column for AIN, Szymon Kluba, Recruitment Manager & Co-founder HR Contact, breaks down the hidden pitfalls of US expansion and how to bridge the gap between European structure and American flexibility to build resilient, motivated teams across continents.

HR strategies that worked flawlessly in Amsterdam, Paris or Warsaw can fall flat in New York or Austin. The differences may seem subtle at first, until they snowball into miscommunication, compliance risks, or costly turnover. From mismatched expectations around leadership style to misunderstood benefits structures or diversity regulations, even well-prepared companies can find themselves on the back foot. In the US, these aren’t just cultural nuances – they’re make-or-break operational factors.

Communication lost between the seas

European managers often pride themselves on being straightforward. Clarity in hierarchy, directness in feedback, and restraint from chit-chat are viewed as marks of professionalism. For Americans, those practices can feel cold, even hostile. In the US, employees expect a more collaborative, less hierarchical relationship with their managers. While brief, casual remarks may strike many European leaders as trivial, they are a standard practice in the United States. In reality, failing to meet these expectations can cause frustration, lower morale, and ultimately increase turnover while harming the company’s brand reputation.

In the US, even junior team members are expected to pitch in ideas and join discussions. Speaking up isn’t seen as challenging authority, but rather as a sign of commitment and drive. In contrast, the more hierarchical style found in many European companies can sometimes make people hold back. When employees feel like their input doesn’t matter, motivation drops, creativity stalls, and overall engagement weakens. This dynamic can be especially problematic. An enterprise that fails to create room for team members’ initiatives risks being perceived as rigid and outdated. Building a successful team requires fostering constructive discussions, valuing feedback, and being open to new ideas.

The legal labyrinth

For example, minimum wage in New York City isn’t the same as in Texas, and paid sick leave rules in California differ from those in Florida. For companies new to the US, overlooking these differences is a common obstacle. To make things worse, gaps in compliance rarely go unnoticed. They can lead to fines, legal issues, and damage to the company’s credibility. That’s why a one-size-fits-all approach doesn’t work in this case. Firms that try to copy their European policies quickly discover that adaptability and flexibility aren’t a choice but a requirement. 

The diversity detour

The US labor market operates under stringent anti-discrimination laws, which demand that hiring and daily management practices comply with Equal Employment Opportunity Commission (EEOC) and Diversity, Equity & Inclusion (DEI) standards. However, navigating these requirements is challenging, and mistakes often happen. Even simple questions about age, marital status, or where someone comes from may unexpectedly lead to legal trouble. Companies that downplay these issues risk internal conflicts, reputational damage, and losing valuable employees. In the EU, laws also prohibit discrimination based on gender, age, religion, disability, nationality, or sexual orientation. Enforcement, however, is generally less strict than in the US, where a strong litigation culture makes lawsuits more frequent and costly.

Individual Recognition vs. Team Spirit

In the States, success is often measured through individual achievement, with top performers publicly recognized, rewarded, and promoted as role models for others. On the contrary, many European business cultures tend to prioritize teamwork and shared outcomes. While this approach encourages collaboration, it can clash with American expectations. Over time, the mismatch can drain motivation among ambitious professionals who expect their performance to be acknowledged and celebrated. This goes both ways; European employees adjusting to US workplaces usually feel pressure to self-promote in ways that feel uncomfortable or unfamiliar.

Understanding and bridging these cultural differences is crucial for creating an engaging, balanced, and inclusive work environment that recognizes both individual and team contributions while driving overall business success. Additionally, language itself becomes a subtle but powerful factor in workplace culture dynamics. Even with English as the common language, variations in tone, phrasing, and word choice can create unexpected communication gaps. To navigate these differences, many international companies rely on local HR partners or specialized agencies that understand cultural communication styles and help tailor internal policies and leadership customs accordingly.

The benefits trap

One of the most underestimated challenges for European companies entering the US labor market is the complex system of employee benefits and health insurance. In Europe, healthcare is often provided by the state or heavily regulated at the national level, leaving businesses with relatively limited responsibilities. The situation in America is radically different. Employers play a central role in providing health coverage, retirement plans, and a wide range of additional perks like dental insurance or mental health programs.

Under the Affordable Care Act (ACA), companies above a certain size are legally required to offer health insurance that meets federal standards. For many candidates, benefits packages are a decisive factor when choosing a new employer. Surveys consistently show that US candidates often place health coverage on par with salary when evaluating job offers. Research finds that three-quarters of working Americans prioritize health coverage over higher salaries. For European firms unaccustomed to this model, underestimating the importance of benefits can quickly backfire. 

Retirement savings plans are another essential element of job packages across the ocean. While most European systems rely on public pensions as the main source of retirement income, US workers are in an extremely different position. Whether a company offers retirement funds is often seen as a clear measure of its competitiveness and commitment to employee well-being. The most common option is the 401(k), which allows participants to set aside a portion of their salary into a tax-advantaged retirement account. 

Companies often enhance their appeal by providing a matching contribution, effectively doubling part of the savings. The money is invested and belongs to the employee, but the company’s matching share is usually tied to a vesting schedule, which grants full ownership only after several years of work. This structure creates a strong incentive to stay with the company. 

To complicate matters further, in September 2025, the US administration introduced a new immigration policy requiring a $100,000 fee for each new H-1B visa petition – a significant cost increase for employers hiring foreign skilled employees. While this surcharge does not apply to renewals or current H-1B holders, it poses a major financial barrier for companies hoping to onboard new international talent under this visa category.

European businesses expanding to the US must now factor this cost into their workforce planning, alongside already complex benefit structures and compliance demands. Failing to do so risks not only operational disruption, but also losing out on top-tier candidates who expect comprehensive and competitive job offers.

Adapting Beyond Borders

Expanding into the US market offers European firms immense growth opportunities, but also exposes them to a business environment that is as complex as it is competitive. From navigating fragmented labor laws to mastering cultural nuances in leadership, communication, and employee recognition. Therefore, enterprises need much more than a straightforward transfer of European models to succeed.

The American market demands flexibility, cultural sensitivity, and a willingness to rethink established strategies. Companies that invest time and resources into understanding these differences, whether through dedicated HR partners, local advisors, or targeted training – gain a crucial advantage. This approach allows them not only to avoid costly pitfalls, but also to thrive in one of the most dynamic labor markets in the world. 

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