It’s a small world after all
While globalisation took a hit after the global financial crisis of 2008, the latest reports indicate that it has been remarkably resilient throughout the world’s most recent crises, including the COVID-19 pandemic and the geopolitical fragmentation resulting from the war in Ukraine.
For growing businesses looking toward global expansion, and particularly in the thick of the remote work era, globalisation delivers a host of new opportunities, as well as a myriad of unique challenges. But what are the effects of globalisation on growing businesses, and how can globalisation be leveraged to accelerate growth and success in an increasingly competitive marketplace? Let’s take a closer look.
The positive impact of globalisation
Globalisation refers to the free flow of goods, people, information, services and capital across borders. Globalisation makes borders between countries more porous, and for new and expanding businesses looking to develop an international expansion strategy, this freer flow of trade and services between countries can be leveraged to maximize growth and profitability.
It makes new markets accessible
One of the benefits of globalisation is that it allows businesses to access new markets and more customers. With the right logistics, global mobility and digital infrastructure in place, growing businesses can reach any market as part of their international expansion strategy, opening up a literal world of new potential streams of revenue.
It allows access to a bottomless talent pool
Globalisation makes hiring top talent, no matter where they are in the world, easier than ever before. With remote and hybrid work now firmly established as the new normal, growing businesses can tap into a global talent pool to source and secure skilled new hires. A cross-border distributed workforce increases diversity and inclusion, and it also gives growing businesses the chance to save on labor costs through salary arbitrage, leveraging varied exchange rates to capture major value.
Increased global mobility delivers better employee retention and satisfaction
Because any business, no matter the size, can hire anyone, anywhere, employees have the freedom to work from wherever they choose. Emigration or relocation no longer means the end of an employment relationship with a valued member of the team. Furthermore, a recent study shows that remote work increases employee happiness by up to 20%, with productivity increasing outside of a brick-and-mortar office environment.
While the positive impact of globalisation on growing businesses is clear, operating internationally does bring with it a few key challenges which need to be managed before companies can start to reap the benefits of a globalised business ecosystem.
Globalisation challenges include:
Compliance and legal complexity
Operating and hiring in a foreign country means navigating an entirely different set of complex rules, regulations and laws. Accidental non-compliance to local labour and tax laws, for example, can result in significant financial penalties, as well as difficult-to-quantify (but equally serious) reputational damage. A remote workforce risks triggering Permanent Establishment risk, which can result in double taxation, at home and abroad. In order to hire in a foreign country, businesses also need to set up a local entity – a costly, time-intensive stumbling block that can quickly throttle any global expansion strategy.
To navigate these bureaucratic gauntlets safely, businesses often need to hire local legal counsel, which can be costly.
Securing the appropriate work visas for a globally mobile workforce can also be a challenge for businesses hoping to expand. Eligibility issues and the heavy administrative burden that accompanies the visa application process can be a huge drain on the HR department.
Global payroll is complex
Once you have managed to hire talent abroad, paying them correctly and on time, every time, is the next potential pain point that needs to be managed. Managing global payroll, including local tax requirements, contributions and benefits, as well as managing region-specific compensation expectations can be tricky without the right talent mobility infrastructure.
With the right global mobility framework, the world is your oyster
It’s often said that globalisation makes the world small, but for growing businesses looking to expand their horizons, it makes the opportunities really, really big.
In order to reap the benefits of globalisation, building a robust global talent mobility framework is mission-critical for growing businesses. A solution like Playroll addresses all of the globalisation challenges outlined above, allowing you to hire in over 170 countries – fully compliant.
From global payroll management to legal advisory services, visa support services and beyond, Playroll’s comprehensive global talent mobility solution allows businesses to take full advantage of the positive impacts of globalisation, while side-stepping the accompanying challenges with ease.
Find out how Playroll can help refine and optimize your international expansion strategy by trying a free demo today.