Expanding into emerging markets – a goal to consider
Your organisation is expanding into new and emerging markets. But how does this impact your HR processes – and payroll in particular?
A Harvard Business Review article noted that more than 20,000 multinational companies were operating in emerging economies at the time – with many companies expecting to find up to 70% of their growth in those markets in the future.1 This is a trend that looks set to continue.
While expanding into emerging markets can offer companies many benefits, including increased growth and revenue, there are also a number of challenges that you may encounter along the journey.
Understanding your new workforce will help you succeed
Forbes states: “"Going global” is defined as the worldwide movement toward economic, financial, trade, and communications integration.”2
But for organisations, this means the potential disruption of their existing business and HR policies and processes, as well as understanding the cultural differences within the country you are expanding into compared to the markets where you already operate. Cultural and legislative differences will play an important role in managing and structuring your new workforce. Some of the differences you may encounter include things such as standard business working hours, how people communicate and working relationships.
“Each market has its own nuances due to economic, cultural, governmental, and market conditions. It is important to develop a localized strategy and business plan that drives local success while remaining integrated with the overall corporate strategy and objectives,” says Forbes.
The impact of global expansion on your payroll
When expanding your business globally, you will require a payroll system that helps you pay an international workforce with ease. Each country will have its own taxes, work-related legislation, deductions and regulations that dictate how, when and what you can and can’t pay your employees.
Expansion can often mean needing to implement additional payroll systems and processes. This can result in fragmented and separate work areas that don’t, or seldom, communicate with each other. With each region operating in isolation and not working as a connected whole, it can introduce inaccurate global reporting and create more work for your HR department.
Another challenge that organisations can face when expanding into an emerging market is the lack of local expertise. With the right global HR services and payroll provider you can easily overcome these challenges.
The right payroll software helps you manage your global payroll challenges
With the right global payroll software, your organisation’s local compliance needs are managed for you, so you can focus on running your new business without the worry of staying on top of local legislative and regulatory requirements.
Furthermore, a web-based platform can provide your HR department and managers with the control and access they need to manage a global workforce.3 The right payroll solution can provide you with a global overview of your workforce, no matter where in the world staff are based. This can help improve your organisation’s reporting and provide easy access to all your employee and company’s data in a single place.
Running separate payroll systems in each region can also cause reporting problems, as the data needs to be collated from each system. With a single global payroll system, you can save time and improve efficiency, as all the data you need can be found via a single system.
When expanding into new markets, it’s important to consider all of the challenges your organisation may encounter and find the solution that will work best for your company’s needs. Whether it’s payroll or other HR functions that you are concerned about, by asking the right questions, you can find the ideal solution for your organisation.