Strategic Steps for Growth Across Jurisdictions
If you aren’t deploying talent across the globe, you’re limiting your revenue potential. As the business world grows increasingly interconnected, international staffing has become essential for staffing agencies, recruiters, and other talent supply firms aiming to remain competitive. The popularity of remote and hybrid work models has further lowered barriers, enabling these workforce solutions providers to extend their placement reach and find top global talent for clients.
There are numerous compelling reasons to consider a national or global expansion strategy, including advancements in technology, workforce diversification, and access to skilled labor in emerging markets. By expanding across jurisdictions, you can test new markets, create regional hubs, and build a global talent pool to address ongoing talent shortages. However, a successful expansion requires careful planning and strategy. Follow this step-by-step guide to navigate your expansion journey effectively and avoid common pitfalls.
1. Identify Your Target Markets
The success of your market entry strategies depends largely on where you choose to expand. Staffing markets vary significantly worldwide, and some countries and jurisdictions offer more favorable conditions for international staffing than others.
When deciding on a market, research factors like market size, regulatory frameworks, ease of doing business, economic stability, growth potential, and competition. Importantly, evaluate the potential of any market with your business strategy.
2. Adapt Your Strategy
Hiring practices, talent pools, and industry demands differ across countries and jurisdictions. Assuming that your domestic success strategies will work abroad can lead to missed opportunities and costly mistakes. Research each target market’s hiring trends, challenges, and opportunities, and develop tailored market entry strategies for each region.
3. Calculate Your Investment Cost
Expanding into new markets involves significant costs and operational hurdles. While targeting a new market with local staff is an option, it may not be the most efficient approach. Setting up a business entity in a foreign country, for example, offers a more permanent solution, but it comes with substantial financial and administrative requirements:
- Company and employment law
- Staffing agency compliance and regulatory frameworks
- Local HR and payroll obligations
- Local customs and cultural barriers
This process can come with significant costs and take months or even years to complete. From our experience working with staffing agencies, setup costs can include:
- Entity registration and setup: Minimum $10,000
- Setting up employment contracts/registrations: Between $10,000 and $50,000
- Open foreign bank account: Minimum $5,000
- Contract with foreign payroll provider: Minimum $2,000 per month
- Retail legal and financial advisors: Between $3,000 and $15,000 per occurrence
- Total: Minimum $30,000
These costs are worthwhile if you’re committing long-term to a market, planning to hire extensively, or opening a physical facility. However, dissolving a foreign entity can also be costly and time-consuming if the expansion does not succeed.
4. Map Your Regulatory Requirements
Labor laws, payroll regulations, and tax policies vary by country and jurisdiction and can be highly complex. Overlooking these differences can result in lawsuits, fines, and reputational damage. Compliance is non-negotiable in national or global expansion, so it’s crucial to understand and adhere to local regulations.
5. Activate Your Network
Breaking into new markets is challenging. To give your national or global expansion strategy some early momentum, leverage your existing employee, client, and candidate relationships. Request referrals for out-of-state or out-of-country contracts and recommendations.
While you should allocate a budget for marketing and advertising in the new market, client and employee referrals are a low-cost way to gain new clients and candidates. What’s more, they’re often more effective considering they come from a trusted source — someone who has a positive existing relationship with your business.
6. Modernise Your Operations
Leveraging technology is critical for successful global expansion. AI-powered tools can streamline candidate sourcing, match talent to client needs, and provide insights into local hiring trends. Workforce management platforms and compliance partners also ensure adherence to local labor laws and simplify payroll and HR processes.
7. Scale with Strategic Partnerships
Partnering with a global employer of record (EOR) can simplify the international staffing process and accelerate your entry into new markets. An EOR enables you to leverage existing infrastructure, reducing the time and costs associated with setting up a foreign entity. This approach is particularly beneficial if you:
- Are testing a market before committing long-term
- Have immediate hiring needs and cannot wait 3-6 months to onboard employees
- Lack the internal resources to manage global HR and compliance
- Face complex labor laws or cultural barriers in the target country or jurisdiction
- Operate with a limited budget
Using an EOR ensures compliance from day one, as the provider assumes the legal responsibility for employees in the target country. They manage onboarding, payroll, benefits, workers’ compensation, and regulatory compliance, enabling you to focus on connecting clients with top talent.
Interested in Expanding to a New Market?
By selecting the right locations, leveraging existing relationships, tailoring strategies to local markets, and addressing compliance challenges, you can turn national or global expansion into a significant growth driver for your business.
Partnering with an employer of record (EOR) like People2.0 can streamline the process, saving you time and resources while reducing risks. With the largest global footprint and labor compliance experts in over 60 countries, People2.0 ensures you can employ your distributed workforce compliantly and efficiently anywhere in the world.
