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2020 was both a monumental lesson on business resilience and the prelude to global growth. As businesses recalibrate their strategy and redefine their priorities, their go-to-market strategies need not be a one-player game.
Partnerships are poised to become an integral part of company expansion, and market testing and entry will take the forefront of corporate growth architecture. These are best practices for expansion leaders looking to take their companies to new markets.
#1: Be dynamic when market testing
The only constant when it comes to market testing is change. Internal and external factors are constantly at play, such that challenges and opportunities are in continuous flux.
Budget and cash-flow-conscious companies often deploy a well thought-out plan for market expansion that usually involves four steps:
- Perform market research and choose your expansion market wisely.
- Start small and solve logistical challenges quickly.
- Find the right talent — and keep them.
- Tap into professional expertise to understand and comply with local laws and culture.
What if you could keep a healthy financial lung while testing several markets simultaneously? Entity setups are time consuming and costly, costing up to 200,000 U.S. dollars per year on average to maintain. Although many companies choose this option, it is neither a guaranteed pathway to success nor is it the only one.Entity setups are time consuming and costly, costing up to 200,000 U.S. dollars per year on average to maintain. Click To Tweet
With the global embrace of remote work, companies can set up nimble teams made up of the best talent available, anywhere in the world. By using an Employer of Record, you can save yourself the extensive research required to hire compliantly, within the rules of the market you plan to test.
Early interactions with local labor law specialists are also essential to any growth plan, be it for hiring, onboarding, or perhaps most importantly, retaining your global talent teams. A permanent solution, like an Employer of Record, saves companies from setting up new infrastructure, but rather builds the flexibility they need into their growth architecture.
#2: Stay on top of fast-changing tides
Global factors such as Covid-19 generate socioeconomic, political, and technological shifts, but are not the only agents of such changes. Industry trends as well are a constant variable that businesses navigate with growth and success as their goal.
For example, before 2009, no one was talking about cryptocurrencies. Skepticism and even distrust were prevalent, and to date, 80 percent of central banks around the world do not issue digital currencies, meaning they are not institutionally backed in the event of a sudden value drop.
Fast forward to 2021, and household names such as Morgan Stanley, BBVA and BlackRock are offering either access to bitcoin funds, bitcoin futures, or commercial solutions for the trading and custody of bitcoin. On the regulatory side, the list of countries considering it a legal tender seems to be growing.
Change comes in a variety of forms and at different paces across markets. Partnerships with local teams or vendors can help companies prepare their structures in advance, and also react faster to changes. Relying on local specialty expertise within your industry is paramount if your business or company wants to get a real, first-person pulse of how the market is evolving.
#3: Up your international labor law game
In an increasingly borderless world, top companies have dedicated teams and resources focused exclusively on regulation monitoring in each country they operate in.
In 2020, international law firm Simmons & Simmons reviewed employment law developments across 12 countries and counted no fewer than 51 regulatory changes for that year alone. These issues were as diverse as working time, paternity leave, gender equality, pensions, minimum wages, insurance funds, and paid annual leave, to name a few.
Do your teams have the bandwidth to stay informed of all regulatory changes? Growth should be a celebration of your success, not the collection of volumes of labor law provisions you need to keep your eyes on for a compliant buildup of international talent teams.
While employment law compliance should be a priority when looking to other markets, talent retention should be a close second as turnover might hit the brakes on your international growth aspirations. Both of these concerns can benefit from outsourcing expertise.
Legal considerations over salaries, benefits, employment perks, and market exit if testing does not go to plan vary country to country. Local HR and legal experts can fill you in on the legal and customary aspects of employee expectations, but an Employer of Record can take on all the legal risk, compliance, and administration so that you can focus on your growth.
#4: Win the war for remote talent
Coined by McKinsey & Company back in 1997, 2021’s “war for talent” opened a new frontline: the global remote workforce. When drawing the roadmap toward a quick recovery and a strong rebound, companies are looking to capitalize on an unprecedently large talent pool.
Highly qualified and cost-effective talent can now work from anywhere. Companies can address talent gaps in their local markets, sourcing the best talent regardless of their location.
Simultaneously, employees can tap into other markets for employment opportunities when their local market does not showcase demand for their specific skills.
HR departments benefit from strategic partnerships with local HR experts, to select and secure top talent at record-breaking speed.
An Employer of Record can help you not only with hiring and onboarding international talent, but also supports the management aspect of your growing global remote teams. This allows you as an employer to remain competitive in virtual international workspaces and ensure your employees flourish in a remote work setting.An Employer of Record can help you not only with hiring and onboarding international talent, but also supports the management aspect of your growing global remote teams. Click To Tweet
#5: Scale quickly, wherever the world takes you
CFO Research and Globalization Partners revealed in a survey of 166 senior financial executives that the top deciding factors that resulted in companies’ decision to expand or hire internationally were:
1. Market share capture (50 percent)
2. Sales presence (45 percent)
3. Investment diversification (31 percent)
4. The ability to acquire top talent (29 percent)
Even in the middle of the pandemic and despite its inherent ripple effects, only 37 percent of surveyed executives shut down their global growth plans. Forty-five percent were either in an ongoing expansion or delaying it for less than a year.
What is more, 46 percent of the surveyed executives planned to engage a global Employer of Record to support their international business strategies.
In an increasingly fast-paced environment where market borders are dissipating more than ever before, staying still is not an option. As a business leader steering the charge of your growing company, your concerns should ring to the tune of critical, strategic questions such as:
- Which markets want my product?
- Where can I find the best people to scale my business?
- How do we build stable growth architecture to keep momentum?
Your time, effort, focus, and resources should not be consumed by granular issues such as:
- Will my current health benefits supplier service that new country?
- Are my international employees covering legal tax requirements?
- Do overtime regulations differ between either of those markets?
It’s not that the day-to-day operations are secondary to your business, or that the granular aspects of setting up shop while securing compliance should be either overlooked or left for later – you and your team just don’t have to do it on your own. The right partners power you forward at pivotal moments.
Don’t fall behind. Next time you are thinking about global growth as a permanent solution, think Globalization Partners.