With a population of roughly 320 million, the United States represents 4.5% of the world population. Since it is also home to the strongest consumer base, many US-based companies to feel comfortable relying solely on domestic revenue. However, in today’s volatile market companies have to compete on a global scale, not just national. For this reason, companies that hope to remain competitive need to think global.
Despite the challenges present, companies that achieve global expansion can take advantage of more opportunities, such as access to a global workforce. A global workforce enables companies to not only reach new customers, but gives them resources to better communicate with the audience in any market.
Think Global: Seize Opportunities
Companies in smaller countries, such as Germany and Japan, have long known that in order to grow they must look externally for opportunities. As technology lowers communication barriers, it is easier for companies to see and take advantage of opportunities in a global marketplace.
Think Global: Global Workforce
With the entire world now a potential marketplace, it can be a daunting task to understand how to enter new markets with different cultures and languages. However, hiring a local national to lead your expansion efforts is a simple solution to capture opportunities once you get to a new territory. Hiring local talent can lead to cultural insight, an understanding of how a territory’s consumers may respond to your company and local business standards. In addition, talent in many developing countries can provide cost advantages to hiring their expensive U.S. counterparts.
It is important to be aware that mandatory employment costs in other countries can be much higher than in the United States. For example, while hiring an Argentine may seem more cost-effective on the surface, the mandatory employer costs can be as much as 60% on top of base salary levels. Before entering a new market, it is important to do research to determine the right hiring strategy for your goals.
Think Global: Diversity Advantage
Diversity and empathy are more than just lofty buzz words for a business looking to succeed in 2017; they are a competitive advantage.
A simple way to gain an advantage and in turn, add value to a company, is to focus on the different perspectives of the audience you serve. When adding new markets to your company’s reach, you add more diverse ideologies, experiences, needs and wants from your customers. Therefore, by adding local nationals you get a better grasp on the views of the territory you are expanding into. A wide array of differing perspectives can lead to increased consumer insight and new market opportunities.
Diversity helps retain and inspire your workforce to operate at high levels. For example, in countries like Singapore, a 13th-month salary may not be required, but it is still a common benefit offered by employers. These small caveats between what is required and what is expected can be difficult to determine without local insight. Furthermore, while offering strong benefits is usually appreciated, certain populations value a sense of community and working towards a collective goal above monetary gain.
Any company simply catering to a single consumer base is not only missing out on opportunities for new customers, but also risks losing a competitive edge against foreign-based companies that take advantage of opportunities around the world. Take advantage of the global marketplace, and more importantly, the global workforce by developing an effective global expansion strategy.
At Velocity Global, we are experts in global expansion and international hiring. Reach out today to let us walk you through your options and show you how you can take advantage of a new marketplace with a global workforce.