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4 min read

Leading a virtual cross-cultural team: Challenges and best practices

Leading a virtual cross-cultural team

Being able to manage cross-cultural teams has become a core competency for leaders. We go over the challenges and offer some tips.

Being able to manage cross-cultural teams has become a core competency for leaders. No longer are teams homogenous and brought up within the same backgrounds — and this applies to both remote and in-office teams.

But everyone seems to be so open to starting a multicultural team. So what’s the importance of leading a cross-cultural team the right way?

Some of the cross-cultural teams advantages for companies are:

  • Improved ideation processes and creativity fueled by diverse cultural backgrounds
  • Better productivity and more opportunities for employees to grow professionally
  • Increased company reputation and client satisfaction
  • A better understanding of the markets you’re targeting with enhanced marketing and sales knowledge
  • More expertise of how to retain your talent and manage conflicts
  • The ability to overcome the skills gap by reaching out to a wider talent pool

Before we jump to our best tips for effective cross-cultural communication, let’s go over the challenges of handling cultural differences in the workplace.

The 3 core challenges of leading cross-cultural teams

1. Operational burdens

Operational hurdles are an overlooked challenge because most of the time, team members, although brought up in different cultures, are part of the same on-site team. With an increased demand for a remote workforce, the extra costs of hiring across multiple countries start to show up.

Overarching everything, there’s the extra costs of hiring outside of your country. Normally, you’d have to set up a subsidiary in the countries where you want to hire to ensure full law compliance. Costs for this start at $80,000 for every country. 

With an EOR, you’ll no longer have to buy or build your own local branch. An Employer-of-Record (EOR) helps you employ, retain, and pay employees internationally so you’ll no longer have to worry about formal employment tasks.

2. Cultural differences and communication

When it comes to cross-cultural teamwork and collaboration obstacles, you’ll first have to understand what motivates people of different upbringings and cultures. 

This Harvard Business Review paper distinguishes direct vs. indirect communication types depending on country. Western countries, for instance, tend to be more direct and explicit, making it easier for managers and colleagues to understand a message without needing the context. On the other hand, the same paper identifies countries like Japan as having an indirect style that requires more discussions before making a decision or moving on to the next step.

The biggest issue appears when two or more such communication styles clash. Making it difficult for the parties to understand each other, let alone work together. This is where a prepared leader comes in to manage conflicts and keep everyone on the same page.

3. Leadership style changes 

Along with the past year, the need for leaders to develop their soft skills above all else has shined through. 

Problem is, these leaders, too, have their own specific ways of managing teams, projects, and disputes. German and Finnish leaders, for example, are more humble as they’re placed on the same level as the rest of the team. 

That’s why managers should also go through the right training that can prepare them to handle multiple work and communication styles and adapt their own. After all, only 10% of leaders have innate management abilities. The rest is up to them to develop in time along with the fundamental cross-cultural leadership bundle of skills.

Tips for effective cross-cultural communication and management

Leading a multicultural workplace starts with growing and maintaining the trust of your team. Here’s our best tips to ensure you’re not missing out on any aspects when building a lasting team:

Build upon cultural agility.

To keep up within a competitive environment, you’ll need leaders to constantly adapt and stay flexible when working with different cultures. The leader’s ability to work extensively with everyone will help each team member grow professionally and have their thoughts heard. 

Recognize the intricacies of each culture.‍

To spot potential clashes between your teams, take a deep dive into every person’s cultural background. Don’t assume your team members are a perfect representation of their culture though. Get to know your team first, have a couple of one-on-ones, and then focus on using cultural cues where you couldn’t get a hold of their preference.

Understand how every culture handles criticism.

‍The root of dissatisfaction in the workplace naturally stems from the way in which leaders interact with their employees — notably when it comes to criticism. For instance, German employees tend to be ok with receiving tougher criticism whereas with American team members you’ll need to mix in some good feedback first.

Stay compliant.‍

Remember there’s quite a lot of things to take care of to comply with the labor laws in every country. An Employer of Record handles employment, payroll, benefits, and even onboarding on your behalf so you can focus on being the best leader.

Set up formal cross-cultural programs.

‍The programs bring awareness of potential cultural challenges and help leaders design work processes that work for everyone. You can always attend external training opportunities or bring a mentor on board to prevent culture clashes from popping up.

Focus on onboarding.

‍The first few months of every new hire’s journey with your company are the perfect time for you to normalize inclusion. Go over our exclusive tips to ensure you’re building inclusive practices for your team from day one.

Keep communication within context

‍To prevent knowledge gaps and mishaps due to poor communication, give context to your message no matter where your team is from. It’s way too easy to assume what a manager wants. So employees could end up working on totally different tasks and specs only to have to redo everything.

At RemotePad, we encourage leaders to create culturally diverse teams. Breaking cultural barriers won’t be an issue if you stick to these tips. The end result? You’ll be able to reap the benefits of bringing multiple points of view and work styles into your company.

At RemotePad, Lech draws on his professional experience to write about employment taxes and payroll (both remote, and in-office). Lech holds a Bachelors’ degree from the University of Kent, a Master of Arts (MA) from Kings College London, and professional payroll and tax qualifications. He has 20 years experience advising on all manner of tax and business planning matters.