Once upon a time, a company needed to reach a certain size before it could expand to the international stage. It required a certain degree of capital, customer demand, cash flow, and other resources.
Two decades into the 21st century, we’ve reached a point where any company of any size could become a global enterprise overnight. The ability to recruit, onboard, and manage a global workforce has become all too easy thanks to the growing power of the internet.
How to Avoid International Business Blunders
If you’re thinking of taking your company, great or small, onto the international stage, here are a few things to watch out for as you begin to recruit in other countries. Hereunder are some ways to skip international expansion failures.
1. Don’t Ignore payroll
Payroll is a tricky business, even when you aren’t operating across the globe. Things like processing payments on time and withholding taxes can eat up copious amounts of time. But, even then, it can often leave you wondering if you did something wrong.
When you go global, your payroll activities increase along with everything else. In fact, global payroll tends to become a catch-all term that applies to much more than cutting paychecks.
For example, global payroll often includes significant portions of onboarding and managing activities, as well as actually paying your employees.
It can also apply to a wide variety of financial transactions. Some of these are simple, such as paying a contractor. However, suppose you have a full-time employee. In that case, it can include things as complex as having an overseas entity hire that employee for you to streamline the compliance and regulation learning curve.
The point is, payroll isn’t a quick and easy item on the agenda when you go global. So instead, please treat it with the respect that it deserves. Consider your needs and plan ahead.
If you feel you need some help, you may want to outsource the work. There are global payroll software solutions available. You could also look for a CPA that is comfortable managing international payroll.
2. Don’t Assume Their Labor Laws Are Your Labor Laws
Going hand-in-hand with payroll is compliance. Don’t assume that the labor laws in a foreign employee’s country are the same as yours. In fact, chances are they’re quite different.
There are many things to look out for when it comes to compliance — especially if you’re hiring a full-time worker who isn’t relocating.
It starts with payroll. There may be statutory (read: required) entitlements and benefits in your employee’s country that you have to honor. You don’t want to violate these laws.
You may also need to do something like those mentioned above, hire the employee through someone else. It may be required to avoid triggering permanent establishment status in their country.
Don’t be scared off by these possibilities. They require thorough research and sound guidance to make sure that you aren’t missing any steps.
Like a good accountant, it’s worth having a lawyer you trust on tap during this process, like a good accountant. They can help you figure out what’s required to hire someone. They can also help you sort through your different employment options.
3. Don’t Apply Remote Work Communication Principles
A better title for this section might be don’t unilaterally apply remote work communication principles with your international staff. The truth is, there are many aspects of typical remote work that translate to the international work world.
For instance, embracing and optimizing asynchronous communication is a great way to keep an international team in sync. It involves “meeting” over a while without everyone being present. It can be a great way to navigate different time zones or flexible employee schedules.
However, there are other areas of remote work that won’t translate as easily. For example, you may have onboarding instructions and resources for your national remote workers. There’s a good chance these will need to be tailored to accommodate any differences that an employee from France or Singapore might require.
The important thing is that you don’t assume anything here. Instead, consider the countries where you’re most likely to hire employees. Then, do your research and try to find ways to onboard, communicate, and collaborate with individuals from those regions. You can even use this information to inform your job descriptions and help you qualify candidates as you look for new team members.
4. Don’t Ignore Cultural Differences
One of the biggest pitfalls of an international workforce doesn’t have to do with payroll, onboarding, communication, or the other logistical elements. It has to do with culture — and we’re not talking about company culture here, either. The local culture of your own company, as well as that of your employees, is important to take into consideration.
This is already true for a remote team operating within the borders of the same nation. Image if you have employees connecting to your remote network from downtown San Francisco, suburban Miami, and Upstate New York at the same time. If that’s the case, you’re going to have some very different perspectives at play.
When you take a company global, you can increase these natural, cultural differences exponentially.
The good news is, if you can embrace this multicultural aspect, you can ultimately use it for the betterment of your company. Start by utilizing open and inclusive dialogue that acknowledges cultural differences within a business environment.
It will help your employees feel more open to sharing about their individual cultural differences. It can ultimately help you maintain unity and direction within your teams.
For example, if you know that a particular individual’s culture is more reticent or defers to seniority, you can make a point to request their input. By being sensitive to and aware of the differences within your global staff, you can use the different cultural perspectives to better your company as a whole. Ignoring them, though, will lead to trouble before long.
Going global with your company is a huge accomplishment. First, however, you must go about the process with care. From setting up global payroll to considering compliance, communication, and cultural differences, there are plenty of t’s to cross and i’s to dot.
If you can do that well, you can begin to tap into the unlimited potential that comes with an international workforce.