Entrepreneur
My first day as Vice President of People and Talent at my company, Vagaro, was also the UK managing director’s first day on the job. We prepared our new office near London for launch just two months out. Although our business development team had brought consultants to ensure the office complied with local laws, we still had to get our people selected, orientated and ramped up. Take it from me: opening a global division is best planned well in advance.
As a software provider in the wellness, beauty and fitness industry, our UK launch was part of our strategic plan to expand our global presence. We also opened an office in India as we grew our network beyond our headquarters in Pleasanton, California. Setting up both these new divisions offered key lessons in overseeing a people-first transition so they feel like an extension of the company, not isolated islands.
I recommend working backward for at least 12 months to put the right resources, systems and expertise in place as early as possible. This includes a CFO who understands global finance and an HR professional with global expansion experience who can guide the process. You also want staff starting a month or two ahead, at a minimum.
Through my tenure as an HR professional aiding companies in establishing offices in various global locations, I have gained other insights into international expansion. Here’s a guide to sidestepping common challenges.
Related: 5 Ways to Globally Expand Your Business
1. Location, location, location
When we moved to India, we knew the location was really the first, second and third priority. If we had chosen a location in the south, it would have put us nine to 12 hours away from the major hub of intense competition. While this site would have offered a cost advantage, the talent pool would have also been comparatively smaller.
From an HR standpoint, companies venturing into global markets must carefully balance cost against access to talent. If someone rides a train an hour daily to work, how sustainable will that be? If you have an office on the outskirts of a major city, be prepared for issues arising with attrition and retention. We kept all that in mind when we chose to open an office in Ahmedabad in western India—it struck the right balance.
Your employment structure will also impact your choice of location, whether fully remote, fully in-office, or hybrid. That will determine how dependent you are on proximity when drawing talent. These factors all underscore the need to begin these conversations with local HR experts very early to make the right decisions. Remember, once you lock in a location, you’re committed.
Related: How to Expand Your Business Abroad For Maximum Success
2. Choose systems for global growth
After you have narrowed down a location, the next issue is how to set up systems to facilitate global employment. Having multiple systems with multiple logins makes it difficult to pull data and can negatively affect perceptions of being a connected global company. So, we aim to transition to a human resources information system (HRIS) solution to track your global workforce data under one umbrella.
Many solopreneurs initially utilize HRIS and payroll processing systems to manage their payroll and finances. However, as businesses grow, they often transition to more comprehensive global platforms that can house all employee information across different regulatory environments, providing greater efficiency and compliance. This includes different rules around allowances such as maternity leave, paid leave, and health care. In the U.K., for instance, people get 28 days of annual PTO immediately.
Using a subject matter expert is critical to ensure these systems are configured for the target country’s employment laws, payroll, taxes, and benefits. Again, I recommend engaging a consultant 12-18 months before expanding to help design systems. It could be a three-year contract: one year before entry and two years after. However, leaders must then be open to their advice on exactly how to prepare for success internationally. It is certainly worth the investment to avoid unintentionally violating international laws.
3. Learn how to manage time differences
My last advice for expanding companies is to be aware of what time zones you are picking. Going global might mean Canada or Mexico, which is only a one- or two-hour time difference if you’re US-based. But as soon as you start crossing oceans to Asia and Europe, you need to be prepared to engage with the group during some of their working hours so they feel supported.
Creating a global team environment requires being flexible and not expecting different offices to always adjust to your timezone. Let’s open up a business unit in Latin America for our call centers or a business division in India or Romania for software engineers. The flexibility tends to be one-way. But is that truly a partnership? Compromising too much can make that division feel extremely disconnected. So, commit to maintaining fair boundaries around time differences.
As an HR leader, if that means getting up from 6-8 a.m. to meet my U.K. team or 2-3 a.m. to meet my India team, I am flexible. More importantly, I want those teams to feel I am flexible. There are no “off” hours in a global leadership role. Leaders must also be prepared to travel two or three times a year for face time with the people from our international divisions. That is simply part of having global responsibilities.
Related: Want to Expand Your Market Overseas? Here’s Everything You Need to Know About Global Logistics in 2024
Although the logistics of expanding internationally can get complicated, all those systems must support connecting like a global company. You cannot just do it digitally. Leaders from headquarters need to visit their new colleagues in person regularly because that’s how you build rapport. When your new divisions feel more like an extension of the business, not isolated islands, your company has become truly global. So, pick a date, choose your consultants, and work backward a year to hit the ground running during your grand opening.
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