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Despite the varied challenges facing business at present, international expansion remains firmly on the agenda for leadership teams everywhere. The significant recent increase in e-commerce—fuelled by lockdowns and remote working, and the drive to find new markets to maximize current opportunities—means businesses intent on global growth want to move quickly. We’ve all seen the value of organizational agility as of late, and companies are using those lessons to turbo-charge their expansion strategies.

However, when it comes to building new business entities and teams abroad, administrative, legal, and cultural obstacles often restrict the ability of ambitious businesses to deliver on their plans. For some, the risk and expense is simply too great. For others, the resources required to get new territories off the ground can prove a major distraction from their efforts in home markets.

Research has highlighted the major concerns of CFOs actively planning to expand internationally, with regulatory/legal compliance viewed by 56% as the biggest barrier to success, with concerns about tax structure (46%) and human capital/talent (38%) close behind. Successfully navigating these issues can ensure the short- and long-term success of businesses that see their future on the international stage.

Although a well-trodden path, the list of major brands that have failed to crack foreign markets is extensive. Take Walmart, for instance, whose efforts to break into the retail market in Germany 15 years ago ended in costly failure. And despite the cultural and language similarities, Anglo-US business success is not always a certainty, as demonstrated by the likes Best Buy withdrawing from the UK retail scene, and the UK’s market-leading food retailer, Tesco, failing to establish itself on US soil.

Overcoming Organizational Barriers to International Expansion

For any ambitious business, large or small, the big question is how can they overcome the organizational barriers to success and firmly establish themselves abroad? For many, the Employer of Record (EOR) model holds the key to enabling international growth with manageable risk. It’s a partnership approach whereby the EOR takes the recruitment of remote talent, human resources, onboarding, paperwork, and legal compliance off the to-do list of the growing business. For those working to expand, this massively streamlines a process which can typically take six months or longer if executed in isolation.

Looking specifically at talent acquisition, working with an EOR can significantly boost the chances of hiring the best talent, as companies can hit the ground running in new territories with a range of attractive benefits. Being in a position to offer health insurance, medical and dental plans, and tax-compliant bonus schemes tailored to each country demonstrates that while the employer may be a start-up in local terms, they are competing hard for talent. 

Similarly, an EOR’s ability to demonstrate HR efficiency and compliance on behalf of their clients can help impress potential candidates as they compare different opportunities. Armed with this operational agility, businesses can deliver on expansion plans at their own speed, without the management and compliance overheads experienced by companies who go it alone. 

Choosing the Right EOR Partner for Global Expansion

In selecting an EOR partner, it’s important to understand that the market offers varying models—the choice of which can have an important bearing on growth strategy. The fully built, in-house models puts a highly qualified legal, HR, and tax team in place to meet the needs of customers. In doing so, the EOR takes on the liability for ensuring each function is handled properly and legally in each country. This approach not only manages vital operational, financial, and employee matters throughout any period of growth, but can also prove vital during an exit, when every detail of a business’s international contracts will be closely scrutinized. 

Alternatively, there is the consolidator or aggregator model, where an umbrella company selects small third-party providers in each country on behalf of its customers, and then acts as an intermediary between the customer and the local in-country partner.

Whatever route businesses adopt, successfully scaling a company to succeed in new countries is far more practical if management can focus on building their team, customer base and international revenue. Ensuring a smooth transition from focused domestic business to multi-territory operations is a rite of passage that every successful global business experiences. With the guidance and practical involvement of an EOR, business leaders can build strategic and tactical agility into their work from day one. 

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Nicole Sahin

Nicole Sahin, CEO and Founder, Globalization Partners Nicole Sahin’s mission is to eliminate barriers to doing business internationally and building global teams. As founder and CEO of Globalization Partners, she is recognized for having created their innovative Global Expansion Platform™, which empowers companies to hire anyone, anywhere within a few business days — expanding their global footprint without the need to set up in-country branch offices or subsidiaries. Nicole’s vision has led to her being named Game Changer of the Year in 2019 and Entrepreneur of the Year in New England. Globalization Partners has also earned the ranking of No. 6 on the 2016 Inc. 500 list, and the company has won numerous awards for breaking the traditional corporate mold by building a nationally-recognized company culture. She credits the success to an exceptional team with global expansion in their DNA, and to her philosophy of the Triple Bottom Line — what’s good for the clients and the employees is good for the shareholders. From day one, Nicole has built Globalization Partners to scale, with a mindset towards meeting the needs of Fortune 1000 companies, which require the highest compliance standards in the world. Prior to launching Globalization Partners, Nicole was a Senior Director at High Street Partners, a firm that provided international HR, tax, legal, and compliance services to CFOs, HR Directors, and General Counsel of fast-growing technology companies, establishing subsidiaries and hiring in dozens of countries. Her experience advising companies ranging from Tesla to HID Global on their international expansions was a catalyst for founding Globalization Partners in 2012. Nicole’s primary nonprofit endeavors focus on eliminating extreme poverty through education and economic development. She’s currently on the board of School the World and has spearheaded efforts to build schools in rural communities in Guatemala and Cambodia. She also works on gender and racial equality initiatives and serves as the Vice-Chair of Diversity on the Membership Committee of YPO New England. Nicole holds an MBA in International Management from the Middlebury Institute of International Studies. She lives in Boston, loves to travel, and is inspired by the belief that making it easy for people to expand internationally, and work seamlessly across borders, ultimately makes the world a more exciting and open-minded place. Follow Nicole and Globalization Partners at: Twitter, LinkedIn.

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