Going International

Opening up your business in a new country can be a real challenge. Will all or some of your Company culture transfer to the new location? What are the norms and practices of this location, both from a business and social perspective? Should you hire people locally who understand the market or send people from the home location who understand the Company? What is the salary market for your company and how do you get to understand it and position your company in that market place? You will be asking yourself: If I do send employees from an existing location what package do I need to give to attract them, and possibly their family, to make the move? How do I get employees integrated into the company and up and running as soon as possible? How do I keep local employees identifying with the company and it’s values?

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Hide details for Getting the first employees on board.....Getting the first employees on board.....
Getting the first employees on board at a new location is a major part of the challenge of setting up the business. The advantages of sending someone from your existing organisation are that they will understand the company, its products and services, how to get things done inside the company and how to feed back results in company terminology. They will understand the values of the organisation and uphold them in the new market place. However there are disadvantages too: you may need these employees to run the business at home, the individuals may not wish to uproot their families and they may know little or nothing about the new location including the language. A local hire has the advantage of knowing the local business environment and market but may have a steep learning curve to understand the company products, services and values. There may even be communication problems with the home country and it can be difficult to integrate new people at a remote location into the company. In an ideal world a combination of company and local hires would perhaps be most effective. Unfortunately the world of business is seldom perfect!

Hide details for The package....The package....
If you do decide to send someone from the home country to help with the set up you then face the problems of having to reward them for the move. It may take more than saying “this will be good career move for you and we will see that you are looked after”. The package will depend on many factors – how long is the assignment, is it single status or will the family be going to, is the company asking the individual to move or has the employee requested a move to the new location? If you go with local hires how do you establish the right compensation package for those employees? Having identified your competitors for labour and armed with accurate job descriptions of the roles to be filled you are poised to find out about the salaries and benefits in your market place.

But where do you go for the information? Do you listen to the recruitment organisations, look at advertisements or listen to the candidates. Where you get the information from will depend on the location. In some parts of the world there are detailed, accurate and professional salary and benefit surveys conducted on a regular basis. At the other extreme there may be no formal data available and rampant inflation! Some societies are heavily cash driven and others may be high on benefits - even those benefits we may typically associate with relocations such as housing allowances and school fees. How much should an organisation take into account the local tax system when considering the implementation of world-wide programmes such as Stock Options and Employee Share Purchase? Indeed, is it possible to operate such world-wide schemes on a truly world-wide basis.

Hide details for Local hires....Local hires....
If you have decided on hiring people locally to run the new business how do you ensure they understand the business and operate within the values of the organisation. Do they need to spend some time in the home country of the organisation? Who do they need to meet in the organisation? How do you get them to understand the values of the company and work with them to translate this into the culture of the new location? How often should people from “Head Office” visit the new location and who should be the visitors? How often should the remote manager attend meetings at the “Head Office” and what types of meetings? How do you keep remote managers abreast of the developments within the organisation? How do you measure their performance in the market place?

Hide details for Managing expectations....Managing expectations....
What expectations will employees have of the new business? Whether the employees have transferred from another location within the company or joined at the new location they will have expectations of rewards for their current performance as well as future prospects. It is important to understand and perhaps to even manage those expectations.


Hide details for Managing cultural difference....Managing cultural difference....
If you currently pay your salesforce on a base salary of 30% with an OTE (on-target-earnings) of 70% bonus will that be acceptable? If we recognise success by inviting all employees to a party that lasts until the early hours of the morning is that appropriate? If we expect everyone to participate by making suggestions on how the business can be improved and questioning the status quo is that realistic? While in American and many European locations it is acceptable, and even welcomed, that employees speak up with comments and ask questions. This is not the case in more traditional, hierarchical environments such as parts of the Middle East and Asia.

To survive and prosper in the global economy of today most organisations must conduct their business in locations outside their home country. It would be naïve to believe that this is something you are ready to do once the business plan has been written. Can you conduct business in the same way at the new location that you do at home? For example, if a sales person is expected to make four sales calls in a day is that still a reasonable objective? That will depend not only on the geography of the new country but the type and length of meetings and the punctuality with which they start! In some parts of the world it is fine to get down to business straight away, in others it can take several cups of tea or even vodka. What is the expectation of employees in this respect? As more and more companies become global business habits may appear to be converging, particularly with the use of the internet, but many practices are still very different and in a sales situation, nuances can mean the difference between success and failure.


And so!
There is much that can be written about setting up a successful business at a new location but how the human resource side of the business is handled can be the difference between success and failure of the new venture.

Corporate HR Partners Ltd advises companies on the people aspects of setting up business internationally whether in Europe, Asia, Middle East, Latin America, Africa or the USA and Canada

If you have any queries, please email us.
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