How to quickly establish a people strategy in new territories


Going global? We gathered the best practices for international expansion.

Working methodically through your market entry plan protects your existing business while helping you choose which countries to target for your expansion. Companies that expand to new markets without a careful business case study risk struggling to locate and attract great employees, legal non-compliance, and other setbacks that can force a sudden market withdrawal.

Market entry can be costly, and withdrawal more so. Therefore, to help you avoid obstacles to expansion, we gathered best practices from seasoned leaders in international growth. The advice in this guide will cut expenses, mitigate risks, and facilitate business growth without disruption. It will also give you foresight into obstacles you may encounter and how to overcome them.

Identifying the right markets for expansion

Many businesses rightly complete a full market analysis before deciding which countries to expand into. However, it might be tempting to skip this step if you have limited resources. Seeking out expert local advice on the following factors is critical:

  • Availability of top talent in each geography
  • Salary and benefit benchmarking
  • Hidden costs, such as employer taxation levels
  • Employment law risk levels, which vary widely country to country
  • Legal compliance and costs associated with setting up a legal entity

Your first stop for local country information ahead of your next expansion should be  Globalpedia, an online resource for understanding these elements at a glance.

Expedite your market entry and keep hiring costs in check

Companies may want to grow internationally to secure market share or stay ahead of competitors. However, they may need to expand into a new territory quickly if the competition has already established a foothold and they risk getting left behind. Other justifications for a quick expansion might include unexpected demand, or a talent gap in the local market.

Expanding your business quickly is a challenge operationally because of complexities including language, currency, laws, and even office culture in different jurisdictions. One of the early challenges that companies face is quickly onboarding first hires in new markets.

Before you can hire anyone in a different jurisdiction, you will need to consider how your company will legally employ them. You might start the process to set up a legal entity in-country if you have the time and resources to do so. Entity creation typically takes six to 18 months, depending on the country’s local regulations. There can be varying levels of complexity to this process. For example, some countries may require in-person visits to set up a local bank account.

If companies cannot justify this expense or it doesn’t fit with long-term business goals, an Employer of Record (EOR) solves payroll and onboarding concerns. This solution allows you to focus on expanding your business, while the EOR manages compliant employment contract generation, international payroll, local taxes, and global onboarding as soon as you are ready to hire.

An EOR is particularly useful in a post-Brexit business world. When your HR and legal teams are already busy managing existing employees, diving into legislative changes in countries you have yet to enter might not be top of their “to do” list. Using an EOR allows companies to hand over these concerns to experts in international expansion, so their expansion is not slowed by red tape and legislative research. Plus, you can rest assured your employees are well cared for.

Benchmarking salaries and benefits early

During the expansion process, salary and benefit benchmarking will likely account for a large part of your cost modelling, as well as a significant overall cost of your project or strategic growth plans. It is worth noting that standard salaries around the world can change regularly according to economic and social considerations, and it is vital to get up-to-date insight into the current and future market predictions.

Salary benchmarking can help you uncover the financials of hiring in a new country. It can also ensure you’re building an attractive salary package so that you can factor this expense into your cost modelling. When entering a new market, it’s easy to misunderstand labour laws and cultural norms, such as mandatory vacation days, observed national holidays, or pension contributions — mandatory pension contributions vary between zero and 20 percent of basic salary depending on the country you are hiring in.

Another surprise in Germany, for example, is standard extended maternity and paternity leave. Moreover, taxation regulations vary greatly around the world and you will also want to craft a salary and benefits package that can compete with your direct competition in-country, so speaking to an expert in salary benchmarking is essential.

New market chosen — now build out your local team

Now that you’ve laid out your business plan to expand into new countries, find out how to attract the best talent anywhere in the world, how to craft an effective hiring process, and best practices for employee onboarding processes in Expediting Team Building for Expansion Success.

Want to equip your company with the tools and techniques to expedite your businesses market entry and expansion goals? Call on the international experience of Globalization Partners and Launch Global for a smooth and rapid market entry.

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