If you’re a successful US-headquartered company aiming to expand internationally, it’s a safe bet that the first country you expand into won’t be your last. And yet, too often, I see companies tripping up on their global expansion plans by planning for just that—one country at a time.
How do I know? Because these are the same companies that approached me a year later panicked because they need to quickly establish a presence in additional countries, and they realize that they lack the capacity or expertise to attempt another expansion initiative. In many cases, they are operating in one to three countries and working with multiple vendors in each country for their global payroll, legal, and HR operations. When I first speak with them, every company has told me, without exception, that in hindsight they should have undertaken their growth strategy in partnership with a single global expansion partner.
In this blog, I explore how rapidly growing, US-based companies can eliminate the risks that come from a reactive approach and, instead, benefit from engaging with global expansion experts to navigate the complex terrain of international expansion.
A reactive approach versus a sound global expansion strategy
If you don’t have a sound global expansion strategy in place, you’ll likely face a risky country-by-country expansion process—one largely defined by reacting to challenges versus proactively addressing them.
While every new country presents an opportunity for your company, it comes with its own set of unique challenges, too. You’ll be faced with new laws, regulations, requirements, and processes on every front, from legal and HR to accounting and payroll—all with the need for country- and locality-specific expertise. If the tax and hiring laws in Spain are markedly different from those in France, you can’t rely on a local Spanish legal expert or HR vendor to help you navigate the challenges in France. Without a trusted global expansion partner, you’ll find yourself scrambling to play catch-up as you struggle to manage a growing multitude of vendors as you expand from one country to the next.
As a significant counterpoint to that reactive approach, the companies that have the most success are those that—from the very beginning—know and plan for the fact that they will expand across multiple countries over a certain period of time. As part of this planning, they invest in a relationship with a trusted global expansion partner who can help them expand from country to country.
Global expansion expertise: Reduce the complexity and risk that comes with each new country.
A seasoned global expansion expert knows the right questions to ask to help you develop a growth strategy that won’t leave you playing catch-up. And the best ones also have the expertise to be able to both advise you and provide direct services for every country in which you desire a presence—thus eliminating the complexity and risk out of opportunity.
Specifically, a trusted global expansion expert will understand local employment laws and ensure compliance, handle global payroll complexities, ensure your adherence to immigration regulations, and help you manage the diverse needs of a global workforce. Let’s take a look at what a global expansion expert can do for a growing US-based firm seeking to expand globally.
Where a global expansion expert can have an outsized impact
Navigating Legal and Compliance Issues Beyond the Reach of Internal HR Teams:
Global expansion experts are adept at understanding the intricacies of local employment laws, tax regulations, and immigration requirements. The best ones developed that unique expertise by having experts in-country. That specific, localized knowledge is key to ensuring that a company’s globally expanding operations are fully compliant with local laws, thus avoiding potential legal pitfalls.
Expertise in Global HR Payroll and Taxation in a Constantly Evolving Global Landscape:
Handling global payroll and taxation in multiple countries is a highly complex undertaking. This is largely due to vast differences in tax systems and regulations. The right global expansion expert is uniquely suited to provide the necessary expertise to manage these aspects far more efficiently than any in-house team, thus ensuring that employees are paid correctly and all tax obligations are met.
HR Global Expansion Strategy and Support:
From establishing a local entity to setting up HR policies that align with local practices, a trusted global HR expert can also take a step back and deliver an effective HR strategy tailored to a company’s specific needs. While many companies desire growth, every situation is different—from capacity and in-house knowledge to timelines and which local markets companies want to tap into. Navigating this effectively is nearly impossible without creating a tailored HR framework that supports the company’s global strategy.
Facilitating Global Mobility for Growing Companies:
For companies looking to relocate employees internationally or hire foreign nationals, a global expansion expert can provide invaluable guidance on immigration, visas, and work permits—all of which vary from country to country and also based on the status of each employee.
Seamless Cultural Integration and Employee Experience as Part of Global Expansion:
Understanding and integrating into a new cultural environment is crucial for the success of any global expansion. A company, after all, is nothing without its people. Global expansion experts understand this and can provide needed support, from creating culturally-specific training to helping create an inclusive environment that values diversity and enhances the overall employee experience.
Cost-Effectiveness and Scalability for Companies’ Evolving Global Expansion Initiatives:
Outsourcing global expansion needs to experts can be much more cost-effective than building an in-house team, especially for small to medium-sized businesses. In fact, given the complexities, constant changes, and variances in local laws, it’s fair to say that it’s nearly impossible for in-house HR, accounting, and legal teams to stay abreast of these critical requirements. There’s also the matter of growth—as the company grows, so will its challenges and needs.
The best global expansion experts know this and will scale their services to meet these expanding needs, making the company’s transition into new markets smoother by actually doing the work as well as advising on it. Generally speaking, when a company expands to a new country, the focus is usually on hiring the revenue-generating workforce (people in sales or those who will do the work) versus back-office staff (those who handle payroll, HR, legal or accounting). Companies will usually wait to hire in-house back office staff until they’ve reached a critical employee size within a country or region. That’s precisely why it’s critical to rely on an expert who can go beyond advising you and actually provide this back-office support to build out your global payroll, HR, legal, and finance teams.
Take the Next Step
For US-based companies eyeing international markets, the role of global expansion experts is the catalyst that turns challenge into opportunity—and opportunity into growth. They serve not just to help you mitigate risk and stay compliant—they can be your most cost-effective strategic partner, guiding you through the unique complexities your company faces in its global expansion initiative. By leveraging the expertise of HSP’s proven and trusted expert team, you can confidently expand into new countries with the peace of mind that you’ve not only met regulatory compliance laws but that you have a relationship with a trusted partner who will become a hands-on extension of your own team.
If you’d like to learn more about building a well-rounded global expansion strategy, please read our latest case study with Thermo Systems and discover how a global full-service control system partner successfully expanded their operations into several different countries.
