What if you could ask some of the top CFOs about their biggest fears and challenges when trying to expand their business internationally? Well, that’s exactly what we did.
Globalization Partners and CFO Research of Argyle Advisory & Research Services crafted a survey to find out if CFOs are still pushing forward with global expansion despite the pandemic, and what their concerns are in a time of global uncertainty.
Here are three of our top findings:
1. No Change of Plans
Even if the pandemic has added obstacles to expansion, most of the surveyed executives say Covid-19 hasn’t forced them to shut down their international growth plans. Specifically, 45 percent were either currently expanding globally or delaying their global expansion for less than a year, and nine percent were in a year-long holding pattern.
Why persevere with international expansion plans in the face of a pandemic? For CFOs, the answers inevitably connect to building their businesses, generating revenues, and improving their bottom lines. The surveyed executives said their top reason was to capture market share, followed by expanding sales and diversifying investments. Acquiring top talent and reducing costs were tied for fourth place on the list of reasons.45 percent of finance executives are either currently expanding globally or delaying their global expansion for less than a year. Click To Tweet
2. Compliance Keeps Them up at Night
Setting up in a new country comes with multiple pain points for the CFO and other senior executives in a company. Tax, HR, and regulatory areas all present their specific complexities that can become expensive and time-consuming if mishandled.
79 percent of executives agree that legal, HR, and tax compliance challenges are a substantial barrier to global expansion.
Labor law – including hiring and firing practices, benefits, statutory vacation pay, and pension schemes – vary considerably from country to country, so it’s essential to make sure that all employment contracts for new employees are legally compliant.
3. Speed to Market Is Always a Factor
Global expansion had been or was expected to be a long process for most of the executives in the CFO Research survey. Eighty-six percent said their international expansions took or would take at least five months. That figure included, astonishingly, 42 percent who clocked the process at more than one year.
Before a company can hire its first employee in a new country, it may have to obtain business registration, licensing, tax identification numbers, payroll registration, and bank accounts.
Monetary control policies in some countries can make something as simple as establishing a bank account into a six-month ordeal. Many CFOs reported that they planned on engaging a global Employer of Record to speed the process and increase chances of success.
Find Out More
Want to know more about how to increase your market by expanding internationally? Download the full report from our CFO survey and find out:
- What were other factors considered crucial by CFOs to decide to expand internationally?
- Where are many companies looking to grow?
- How can your company massively reduce the time it takes to hire internationally?
If your company is facing these expansion challenges, learn more about how an Employer of Record can help.