Building a Dedicated Team to Support Global Expansion
The preliminary findings of our joint study on global HR practices with Papaya Global are coming in, and the results are fascinating. For instance, one element of particular interest is the reason companies pursue a global workforce. At this point in our research, the primary reason firms expand and hire a global workforce is to create a global footprint close to key target markets. As globalization increases, firms are attempting to compete by hiring key local workers to fill any skills gaps and create a dedicated team to serve customers well.
By the way, the study is open through April 30th if you want to respond. Participants will receive a copy of the research findings upon publication and all responses are anonymous.
Growing the Right Way
Today, it is rare to read about talent and labor economics without mention of freelance or contingent labor; for our purposes, those elements do not apply. Companies that are trying to sustain a steep growth curve cannot rely on a workforce cobbled together from part-time freelancers and consultants. To meet the demands of growth, they need to have a dedicated set of resources at their disposal.
Another limitation of contingent labor is a more casual employment relationship. An employee working ten hours a week most likely will not buy into your company's culture, when that person may have three or more employer clients simultaneously.
The solution is to find qualified local talent that can be hired through employment contracts. This option not only provides global firms with a source of labor that is proprietary to the company--it also provides organizations with a dedicated pool of experts whose full efforts can be focused on performing and meeting objectives. On the administrative side, employment contracts allow employers to focus on creating value for their business and saving time.
The Legal Aspects of Global Growth
Consider this fact: based on our ongoing research study, half of companies with a global workforce are spending more than four hours per month, per employee, to manage onboarding, payroll, and ongoing communications with their global workers.
Often, when companies grow rapidly, they do not have the time, expertise, or resources available to set up local entities in every country they need to operate in. For these needs, we would like to introduce you to global employment services. Global employment services allow companies to navigate complex immigration requirements, connect with suppliers in target countries, and hire the appropriate workers.
Matomy, a client of Papaya Global, is an exemplary illustration of these services. In this mini case study, the leading digital performance-based advertising company faced a number of difficulties in their expansion to China:
● Sourcing for local talents and employees
● They lacked understanding of HR local labor laws, salary benchmarks, and instruction on management of local employees
● Local suppliers were needed for Employment of Record services
● Finding an immigration specialist to issue work permits for expatriates
While it may sound simple, in reality each of these steps is fairly complex. Because of the complexities, approximately half of companies expanding globally have low confidence in their current solution to scale and keep errors from disrupting the business. Growing a business on a global level is a powerful way to increase competitiveness, but it also can be fraught with challenges.
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Written by: Ben Eubanks, Principal Analyst