As companies seek workforce opportunities beyond domestic borders, the responsibilities of today’s Chief Financial Officer are evolving rapidly.
According to a 2023 McKinsey survey, in fact, over 39% of CFOs consider change management as the most important skill for the future, highlighting a growing need for a multifaceted approach to financial management. Managing diverse regulatory environments, economic conditions, and cultural nuances requires CFOs to adopt a more strategic approach to global expansion and hiring.
Our 2024 Global Employment Guide explores how partnering with an Employer of Record (EOR) can help C-suite executives achieve a smoother, faster, and more compliant entry into new markets.
Let’s take a closer look at how CFOs in particular can leverage this partnership to drive successful global growth.
How CFOs contribute to modern expansion strategies
CFOs aren’t just guardians of financial stability; they play a crucial role in shaping a company’s strategic direction and overall efficiency during global expansion. Their decisions directly impact:
- Compensation and benefits schemes: Navigating global hiring involves creating appealing and compliant compensation packages aligned with diverse market requirements and regulatory frameworks. This often requires thorough market research and collaboration with local experts.
- Budget allocation: When allocating budgets for global talent acquisition, CFOs must balance resources for hiring and retaining talent without compromising other business investments. This involves strategic decisions about fund allocation and setting aside resources for contingencies like currency rate fluctuations or unexpected regulatory changes.
- Resource management: Effective resource management improves financial transparency, reinforcing trust in leadership and increasing a company’s appeal to potential investors and partners.
The financial impact of hiring globally
During a company’s expansion, global hiring challenges are inevitable, and CFOs must proactively manage these to prevent negative financial impacts. Common scenarios include:
Hiring delays
Hiring delays are often a risk when expanding globally. Balancing cost considerations with the need to secure skilled talent can lead to prolonged hiring processes. These delays can cause missed opportunities, business disruptions, and, ultimately, a slower market entry and expansion pace. To manage this risk, CFOs need to be able to build accurate forecasts for employee costs while working closely with HR to ensure that recruitment strategies are efficient and effective.
Talent shortages
Financial constraints can limit a company’s ability to offer competitive compensation packages, making attracting and retaining talent in key markets difficult. This can be particularly challenging in specialized industries where demand for skilled professionals outpaces supply. Talent shortages can have a ripple effect, impacting everything from product development timelines to customer service quality. CFOs must address this by exploring alternative talent pools and investing in employee development programs.
Operational gaps
The long-term financial consequences of failing to secure the right talent can be significant. Poor hiring decisions or delays in filling key positions can lead to operational inefficiencies, decreased innovation, and reduced competitive advantage. Ultimately, these issues impact revenue and diminish shareholder value. CFOs must ensure they have the right strategies and resources to attract and retain top talent.
CFO priorities: Key areas for global hiring success
To successfully navigate the global market, CFOs should integrate several key areas to ensure financial efficiency:
- Market research and benchmarking: Market research is vital for CFOs to understand global market competitiveness, track currency exchange rates, and compare compensation and employment practices. Create strategies for managing global payroll by gathering data on salary trends, benefits, and cultural nuances.
- Flexible compensation packages: Flexibility in compensation is crucial for attracting and retaining talent in diverse global markets. Organizations need to offer variable pay components, such as performance-based bonuses, equity options, or benefits catering to different regional employee preferences. To streamline this process, our G-P Meridian Suite™ of global employment products makes it easy to offer global teams competitive and up-to-date benefits that meet the rules and norms of the countries you’re hiring in.
- Workforce planning: Strategic workforce planning aligns hiring strategies with business goals by identifying critical roles and skills needed, forecasting future hiring needs and developing a talent pipeline. Companies must also invest in succession planning and talent development to ensure a steady supply of skilled professionals for key positions.
- Data analytics: Data analytics is vital for CFOs. By analyzing employee performance, market trends, and financial metrics, CFOs gain valuable insights to make informed decisions. Analytics also helps identify risks and opportunities and reveal trends in employee turnover.
Global expansion made easy with G-P
Hiring globally offers significant growth opportunities as well as challenges, but CFOs can successfully navigate these hurdles by partnering with an Employer of Record (EOR).
An EOR like G-P has the technology and expertise you need to hire, onboard, and manage global teams in 180+ countries, all with guaranteed local compliance and unbeatable speed to market.
Our global employment products and EOR solutions, G-P Meridian EOR Prime™ and G-P Meridian EOR Core™, are equipped with tools like the Employer Burden Calculator to help CFOs make smarter expansion decisions.
For more insights on building alignment across C-level roles, download the 2024 Global Employment Guide. For more information on hiring and managing global teams quickly and compliantly, contact us today or book a demo.
