Strategies for Success in International Expansion
Global expansion is a fantastic way to test new markets and gain proximity to new audiences, talent and even raw materials. Yet, for businesses seeking to expand, it can also be a complex and uncertain process.
Having worked in this field for more than seven years helping companies to realize their goals of going global, I have been fortunate to see many companies successfully launch into new territories. While each of these growing companies were unique, they all used the same strategies to cement their success in their chosen locale. Experience has taught me that companies which implement these strategies tend to be the most successful in new markets.
Here are the four key strategies that every expanding business should consider:
1. Get the Basics Right
Expansion must start with data, a solid foundation of insight and intelligence that ensures the company is making the right choice of region. Next, they must consider the logistics of hiring in another country, planning how they will legally and compliantly employ and payroll any employees in their new location.
Some businesses will choose to employ contractual staff to start operations, perhaps on a short-term basis. Others will prefer to create their own entity in the new market, fully aware of the list of requirements for incorporation in the country. Entity setup can be a lengthy process and include capital investments, locally based company directors and many other long-term commitments. Of course, opening a new local entity is just the beginning; companies must ensure they meet all HR requirements, labor laws and payroll obligations, including taxes and benefits that comply with local legal responsibilities that come with operating in the country.
The simpler — and faster — approach is to partner with external specialists, such as an Employer of Record, who can facilitate all the local legal requirements for employment and HR, tax and compliance on a company’s behalf. These allow them to expand, onboard, manage and pay new or relocated employees worldwide without needing to invest in, or commit to, untested markets.
Getting business operational and compliant must be the first concern for any expanding company so that they can hit the ground running in the new location. Not choosing the right method for your business will cost you time, money and missed opportunities.
2. Companies Benefit from Local Insight and Connections
Entering a new market comes with a unique set of complexities for every business. The most successful companies use local insights to increase their chances of success; understanding the cultural and language barriers, customs in the region and local ways of working, can make or break a new player in a foreign market. Without understanding how a country does business, including all the small, local nuances, companies risk missing potential business opportunities or even unknowingly cause offense.
This is easily avoidable. A great strategy is to hire at least some of the new employees from the local talent pool; they will be more familiar with the region and its customs and can ensure the company makes the right impression on the new market. In addition, they may be gateways to a new go-to-market approach, a potential network of prospects and perhaps even their first client. Working with local insights ensures that your new operations start with a bang!
3. Bolstering Your In-house Capabilities
Some companies attempt to realize their global expansion goals by increasing their in-house capabilities and project-managing the entire operation themselves. Unfortunately, many of these attempts falter when they run into the reality of dealing with complex, constantly changing local HR and labor law requirements. Other companies struggle to allocate the resources and people required to set up and run their own entities and manage the global HR and payroll requirements, while also supporting the employees with local payroll, benefits, global mobility and other urgent needs.
To be clear, there is absolutely no room for cutting corners when it comes to international HR, payroll and compliance; however, there are ways to remove many of the challenges associated with expansion.
A great strategy is to partner with experts, such as an Employer of Record, who can bolster in-house capabilities and provide the infrastructure and local expertise critical for global expansion. They understand the local HR landscape, the people and their culture — both in and out of the workplace — and, perhaps most importantly, are trained and equipped to be compliant with all local rules.
Recognizing your resource limitations allows you to focus on growth and sustainability in new markets, rather than waste time and energy on things that can otherwise be better handled by specialists.
4. Ongoing Support for International Operations
New operations are often run with a skeletal staff during market testing, with businesses relying remotely on the experience of a few people to bring their new operations to life. Unfortunately, a potential consequence to that pressure is employee burnout and subsequent demotivation. This could potentially derail expansion plans.
Making sure employees feel valued and supported every step of the way is key to providing a great work experience. This is particularly important for employees outside of the company’s home base. A great way to achieve that is to work with local external specialists, who can advise and support employees with everything they need locally, in the right language and time zone. This helps companies maintain high retention and low churn rates while creating advocates for their business in the new region.
Another benefit of working with these experts is the advice they can give on the legality of actualizing further ambitions, providing companies with the knowledge to confidently move into new markets. This type of ongoing support is a powerful asset that deeply engages with clients, combining market knowledge and domain expertise to ensure compliant operations.
Ultimately, while it’s easy to focus initially on the logistical and legal details of setting up operations in a new market, is important to remember that employees are at the heart of everything you do. Setting them up for success is the best way to get yourself on the path to success.
Expanding globally is not a simple task. But with the support and guidance of experts and partners with experience and infrastructure to help actualize these goals, it can be. While you will need to find what works best for your industry, pace and requirements, adopting some or all of these strategies will form a robust foundation for any global expansion plans and help propel your new operations to the next level.
