Top Mistakes Companies Make in ASEAN HR & How to Avoid Them

Expanding into ASEAN? Discover the top HR mistakes global companies make—like payroll compliance, hiring missteps, and visa errors—and learn how InterLoop helps you avoid them.

People are at the heart of every successful expansion. For companies entering ASEAN’s fast-growing markets, building the right team is just as important as securing customers. But with 10 countries, multiple languages, and vastly different labor laws, HR can quickly become a minefield.

Many firms stumble by mismanaging payroll, hiring incorrectly, or failing to comply with local employment laws. In this article, we’ll explore the most common HR mistakes foreign firms make in ASEAN—and how to avoid them.

1. Misclassifying Employees and Contractors

The Mistake:
Some companies treat full-time staff as independent contractors to save costs. While this might work short-term, it exposes businesses to legal disputes, fines, and backdated payroll obligations.

The Fix:

• Understand local definitions of employment (varies by country).
• Use an Employer of Record (EOR) to properly classify and hire workers.
• Draft compliant contracts that protect both the company and the employee.

2. Overlooking Payroll Compliance

The Mistake:
Payroll in ASEAN isn’t just about wages. Employers must account for mandatory benefits, social security, and severance pay. Mistakes here lead to heavy penalties and damaged reputation.

The Fix:

• Work with local payroll specialists or outsource to a trusted HR partner.
• Automate payroll where possible to avoid human errors.
• Stay updated on frequent changes to labor laws and tax rules.

3. Mishandling Expat Visas & Work Permits

The Mistake:
Firms often underestimate the complexity of visa and work permit processing in ASEAN. Non-compliance can result in denied applications, fines, or even deportations.

The Fix:

• Plan visa applications well in advance.
• Partner with providers experienced in SMART visas and foreign worker regulations.
• Consider local hires to reduce dependency on expats.

4. Ignoring Cultural Differences in HR Practices

The Mistake:
Applying a one-size-fits-all HR approach across ASEAN can backfire. What works in Singapore may alienate teams in Vietnam or Indonesia.

The Fix:

• Train HR leaders in cross-cultural management.
• Localize employee benefits and engagement strategies.
• Use regional HR advisors to bridge cultural gaps.

5. Weak Onboarding & Retention Strategies

The Mistake:
With ASEAN’s highly competitive talent market, weak onboarding or lack of career development leads to fast turnover and higher hiring costs.

The Fix:

• Implement structured onboarding programs.
• Offer clear career paths, training, and regional mobility opportunities.
• Build a company culture that resonates with local values.

Conclusion

Expanding into ASEAN is exciting, but HR missteps can quickly derail success. By addressing these five common mistakes and working with experienced partners, your business can build strong, compliant, and motivated teams.

👉 Ready to build your ASEAN workforce with confidence? Contact InterLoop today to learn how we can support your HR needs.