Navigating international expansion

By Nicole Sahin, CEO and Founder of Globalization Partners

International expansion is rarely simple for any business, no matter its size. There are complex issues that need to be carefully navigated such as in-country legal, HR, and payroll compliance. Ramping up operations in foreign territory is not as simple as finding the right people. It is also about managing and supporting the staff once they are in place. In order to succeed, organisations must understand the multitude of difficult challenges that come with the opportunity to move into new markets.

That said, there’s no shortage of success stories. Netflix’s global growth is a big factor in the company’s success. By 2017 it was operating in over 190 countries, and now has 167 million subscribers. Spotify is another great example. It optimised local music preferences and personalised features to break through to 61 countries (and counting). Breaking into a new country is possible – but the [literally billion] dollar question is ‘How’?

In a recent survey of CFOs from organisations actively planning to expand abroad, regulatory/legal compliance (56%), tax structure (46%), and human capital/talent (38%) were identified as the largest potential barriers to success. This is unsurprising, as the challenges associated with international tax and accounting regulations, as well as labour standards, are daunting for even the most experienced executives. It’s also getting harder and harder to find and recruit the best local talent in new countries, which is essential for success.

Fast-tracked success

Rather than go it alone and hope for the best, a more progressive approach is to work with an expert third-party partner that has all the specialist knowledge and skills required to make international expansion a success. Such partners are well versed in the specific details surrounding employment, tax, and accounting regulations in the countries and regions they operate in. As such, they can help overcome the obvious challenges, as well as point out where the hidden pitfalls lie.

A Global Employer of Record (EOR) offers a wide range of benefits for companies expanding internationally, including the ability to quickly place workers in countries where they do not have a business subsidiary or branch office. This is because the company’s employees are placed on the EOR payroll, with the company benefiting from the EOR’S global legal infrastructure.

Here are some instances in which working with a global employer of record could help you build your global team and succeed faster:

1. You want to hire someone internationally without setting up a legal entity. 

The budget and resources required to set up an entity does not have to deter your business from hiring a remote, global team. An EOR takes on the burden of legal, tax, and financial compliance, freeing up your internal team to focus on what matters.

2. You want to deliver a great employee experience and build trust with your new hire. 

Part of getting the most out of your employees, and ensuring they love their new role, is building a great experience for them, from beginning to end. If you’re rushing to figure out payroll and benefits last minute, and potentially not providing a competitive package, might result in the offer falling through. An EOR will put together a complete benefits package, consistent with local norms and regulations, as well as fully and legally onboarding your employee. This frees up your internal team to focus on building the relationship with your new team member, assured the rest is taken care of.

3. You want to stay compliant with local laws and protect the interests of your business. 

Laws and regulations change fast. It’s a full-time job just keeping up in your country of origin. As you add employees living in other countries to the list, the resources required to stay up-to-date and compliant will multiply. An EOR handles this on an ongoing basis so you can focus on growing your business instead of staying compliant.

The Shifting Global Workplace

Right now, the global community is facing a crisis. As countries go on lockdown and you check in with friends and family around the world, it’s clear that it’s not business as usual.

However, as a business leader, I know that in these times, the teams that are already strong get stronger. The people with an existing vision find a renewed sense of clarity and purpose. Companies with an emerging growth trajectory hone in on what truly matters to continue driving progress forward.

Though we may not be able to yet predict the breadth or depth of the impact of COVID-19, I want to share three pieces of advice for businesses with a goal of coming out stronger on the other side.

• Diversification Is Your Strength – Go After It 

Times like these are great reminders that we are truly a global community. What happens elsewhere affects everywhere. But it may not affect everywhere all at once.

From a business perspective, diversification is key to operational stability, especially during challenging times. Where one market may be slowing down (or completely coming to a halt), another may be emerging from a downturn, and you will want your team ready to take full advantage of that opportunity.

On a practical note – think about where you’re hiring your sales team. Investigate hiring on different continents, so you have a team on the ground, in-country, ready to take advantage of every global market shift.

• Focus on building your Infrastructure

If you’re currently experiencing a market downturn, view it as an opportunity to build the infrastructure necessary for the market rebound. That could mean hiring an engineering team to accelerate the next product feature build. It may mean letting your internal team focus on developing a new marketing campaign with a future launch date.

In a rushed, intense market, rarely do businesses have the chance to sit back, identify gaps, and take the time to fill in what’s missing – so take advantage of it.

• Learn about and from each other

Something happens when your once co-located team becomes distributed…overnight. It forces you to communicate in a different way than you may have before.

While you’re likely concerned about keeping up morale during the short term, think about this as an exercise. What can you learn from your team, or about your team, while you’re all facing this situation together? Are there changes in the way you are now communicating offering any lessons you can take back to the office when regular business operations resume?

Remember, you don’t have to do this alone. Having a partner who can help you understand the nuances, see around corners, and prevent the inevitable bumps in the road is critical in hiring, managing, and growing a successful global team.