Navigating The Complexity Of Global Expansion

If talent, the drive to succeed and, of course, a compelling product or service were everything required to take a domestic business international, there would be many more companies thriving on the global stage.

As many companies have discovered, however, the issues facing those looking to expand beyond their domestic markets are increasingly complex. While the potential to profit from global expansion has never been greater, contemporary firms must also address fundamental changes being seen across the economy if they are to match their ambition with results. 

Take the concept of remote work, which has become much more of an accepted practice since the pandemic hit and drove workers home in order to stay healthy. Technology has played a key role, and new software tools that enable remote communication, such as Zoom for videoconferencing and Slack and Trello for remote team project management, have reduced the feeling of disconnection and lack of supervision managers have long feared.  

This is also helping to address a widespread resource shortfall—people. A lack of qualified talent to fill key technology roles in developed countries has effectively forced companies to seek out workers in other locations. There are, for instance, too few engineers in the U.S., and economists have suggested a need for one million more STEM professionals by 2025 than the country is currently producing, which is pushing recruitment efforts outside North America. 

Where companies in high-growth industries used to import talent, sponsoring work permits for high-value employees, many developed countries have started significantly restricting the ability of companies to recruit internationally. Organizations are hiring the exact talent they need, but only by allowing employees to work remotely from their home countries rather than trying to get through the arduous H-1B visa (or equivalent) process. 

Modern challenges need modern solutions 

Corporations focused on international diversification must address these challenges if they are to grow, but getting established in a new location is often anything but straightforward. Any misstep can quickly become extremely costly and many embark on expansion plans without understanding the complexity of establishing a business entity or setting up a branch office abroad.  

Indeed, the process can vary dramatically from one country to another, taking anywhere from three to 12 months and requiring compliance with a diverse set of rules and regulations. That lag time can dampen corporate enthusiasm as well as growth, and what business leaders often imagine as a basic administrative process leaves them bogged down by bureaucracy and unfamiliar responsibilities. 

In response to these issues, a new model has emerged that offers organizations a shortcut to doing business internationally: the Employer of Record (EOR). An EOR acts as the official employer for its clients and relieves human resource divisions from doing the heavy lifting of setting up and staffing a location in another country. It’s an approach designed to help corporations leapfrog over barriers to growth, so they can add international employees in a couple of hours instead of months.  

While corporations still identify talent, the Employer of Record puts their team members on an already-existing local payroll and benefits plan. This also means international legal, HR and finance functions are outsourced, while the EOR should be responsible for ensuring that all local laws are being followed during the hiring process, benefits offered are legal and appropriate for the region, and the onboarding process complies with local regulations. 

Dealing with these issues allows nascent international brands to focus on building sustainable success, rather than operational details that can disrupt or even derail their plans entirely. As organizations look to the future, there has never been a better time to take domestic business success and step onto the international stage. But starting with a solid foundation will determine who succeeds and who doesn’t.