How to Avoid being a Stranger in a Strange Land

Mercer Select Intelligence Doing Business Abroad 2017

It’s not news to report that business has gone global; globalization has been a buzz word for the last three decades. What is new, however, is the reach of global business. Whereas companies used to be “global” after establishing one or two foreign offices, the press for new clients, resources, and labor has pushed companies into increasingly exotic and unfamiliar destinations.

With this opportunity comes unique challenges and concerns. Expanding into a new market means incorporating and registering with the local government, hiring local staff, and navigating a new regulatory environment. Moreover, companies often have to post existing personnel in the new location on an international assignment, whether for the long- or short-term. Each of these challenges requires HR action, and companies would be remiss if they didn’t consider some of them in advance:

Business Environment

  • No organization would enter a new market without knowing its economic profile and strengths, but there are several key metrics that companies can look to when evaluating the prospect of opening an office in a new country. International rankings and indices on economic and political freedom, corruption perception, network readiness, and human capital consumption all help business determine if a market is a fertile ground for sustainable growth, and HR and business managers should not ignore these signposts when considering investing in a given market.

Labor Relations

  • Sourcing and hiring new staff is a difficult task in familiar environments, but doing so in a new market is an entirely different issue. This process entails preparing for new labor laws, unknown contract requirements, different probationary periods, and other unforeseen factors. Moreover, those companies engaged in factory work or dangerous workplaces may also need to prepare for regulatory oversight, collective labor agreements, and specialized laws on employment of teens and pregnant women.

Expat Life

  • Opening offices in a new market probably means that someone within your company will be posted in the area for an extended period. Moreover, as they’ll be overseeing the expansion and making key strategy decisions, it’s likely to be a senior or high-value employee. In addition to the basic visa and immigration issues, they’ll face the realities of life in a foreign country. Easily overlooked issues like access to suitable housing, adequate schools, and high-quality healthcare become major factors when employees are spending extended periods in the new market, and companies should be prepared to help their personnel navigate these challenges.

International expansion and mobility are complex, nuanced responsibility areas for today’s HR professionals. Navigating new regulatory environments and labor markets is always a daunting task, but those that prepare are those that succeed. With the right combination of background knowledge, market data, and legislative review, companies can confidently enter new markets that promise high growth and higher profits.

Interested in learning more about doing business abroad? Don’t miss Mercer’s Doing Business In series, a collection of country-specific reports that offer nuanced and detailed analysis of all elements of doing business in new and emerging markets around the world.

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