In today’s interconnected world, globalization has become an essential business strategy for companies looking to grow. With the help of Employer of Record (EOR) solutions, companies can tap into a diverse talent pool and develop a strong market entry strategy.
While globalization offers plenty of opportunities, expanding to global markets isn’t easy. That’s why industry leaders like G-P build compliant business environments to help companies of all sizes scale.
What are the benefits of globalization in the talent landscape? Let’s explore the main benefits and challenges of globalization.
What is globalization?
Globalization is the connection of the world’s economies, populations, and cultures. In the 1980s, globalization was just a tactic for economic growth. Now, the way we think of international business has transformed.
In business, globalization provides access to labor, capital, and resources. To put it simply, globalization was once about scaling a company across borders to expand operations. Today, the concept has evolved into an even more powerful idea: the “global mindset.”
A global mindset empowers leaders to connect with like-minded talent beyond borders. As the world becomes more and more connected, it’s also getting smaller.
To stay ahead of the competition, companies need to understand what this means for the future of business. Here at G-P, we support leaders as they adopt a global growth mindset in this new era.
What is the impact of globalization on daily business operations?
As globalization expands along the supply chain, a greater flow of people, products, and services increases trade growth. Beyond boosting global trade in developed nations and developing countries, globalization has also transformed the talent landscape.
Large corporations continue to see globalization in every aspect of business, and now this is true for even small startups and entrepreneur-led businesses. Today’s global flexibility helps companies streamline operations, reduce costs, and gain a competitive edge in the race for talent.
More specifically, companies have sourced talent beyond their local headquarters despite significant talent shortages. This unlocks the opportunity to tap into previously hard-to-reach hubs of highly skilled talent. In fact, over 80% of 2,500 global businesses surveyed in G-P’s Global Growth Report actively hire internationally. This hiring strategy can increase talent pipelines across the world tenfold.
As the global workforce evolves, employees also prioritize soft skills that come up in practical ways in the day to day. For example, 47% of employees want leaders to offer cultural sensitivity training to all staff. Plus, 39% of employees want to celebrate global holidays and customs.
Over 40% want leaders to make in-person visits to all global market regions. Self-awareness and cultural respect are at the core of a strong global mindset — and a stronger company culture.
What’s the first step to growing your company? Consider partnering with an EOR solution to take advantage of the benefits of globalization from day one.
What are the pros and cons of globalization? And how can companies solve them?
More and more businesses are looking beyond borders to access the best talent. But hiring internationally is about more than increasing headcount. For 66% of leaders, having employees in multiple countries is part of their business strategy.
What are the challenges of globalization? What are the benefits of globalization? Organizations need to understand both sides in order to scale successfully.
| Advantages of globalization | Challenges of globalization |
|---|---|
| Borderless hiring. Globalization has allowed companies to transcend borders and seek talent from around the world. | Managing payroll and compliance. Figuring out payroll and taxes to successfully classifying, onboarding, and managing new team members, requires diligent monitoring. |
| Access to new markets. With the support of an EOR partner, it is easy to test new markets and begin business operations. | Setting up a legal entity. Without the right EOR partner, the entity setup process takes up significant time and budget. |
| Access to new talent. Companies are empowered to tap into emerging hubs of highly skilled talent anywhere in the world. | Determining fair salary and benefits. Local expectations vary significantly across countries. Companies must offer competitive employee benefits that align with local expectations. |
| Increased diversity. Global companies are best poised for establishing a culturally diverse workplace. | Communication barriers. Pay attention to the risk of proximity bias. Inclusive communication is key to keeping teams happy and engaged. |
| Knowledge sharing. Knowledge sharing is key to any growth. Globalization promotes the rapid transfer of knowledge, and the globalization of information sharing continues in 2024 and beyond. | Staff onboarding challenges. When onboarding new staff, take language barriers and differences in cultural expectations into account. |
What are the challenges of globalization?
Setting up an entity in another country can be challenging. Without an Employer of Record (EOR) partner to guide you, it can be hard to adjust to country-specific rules. For example, worker classification rules vary depending on location and can change over time.
In-house expertise is essential to avoid the drastic consequences that come from failure to comply. It can also be challenging to navigate evolving tax laws and manage compliant payroll.
One of the most significant globalization impacts on business operations is increased competition. Growing and retaining talent will become even more important to remain competitive. Many leaders want to expand their business. Yet, 1 in 3 executives don’t even know how to identify the right markets to look for specific talent needs.
Other operational challenges include global communication hurdles and even language barriers. For example, 46% of employees schedule all-hands meetings in different time zones throughout the year. Meanwhile, 49% of employees say that time zone- and language-inclusive company updates are key to an inclusive work environment. Through leading by example, leaders can address these hurdles to successfully build an adaptable workforce.
What are the benefits of globalization?
Despite its challenges, international expansion offers many benefits. Global companies are better at attracting top talent, supporting international clients, and implementing the latest technological advances.
Globalization also benefits your bottom line. Research shows that companies with global remote teams can save as much as USD 11,000 per employee compared to their in-office counterparts.
Globalization also promotes a more diverse and inclusive workforce. About 48% of employees believe global companies provide a culturally diverse workplace. A global mindset also offers employees better pay and benefits, greater workplace flexibility, and skill development opportunities.
Global organizations can only thrive with leaders who are committed to the growth of their business and workforce. To take advantage of globalization, companies need to prioritize the employee experience from the very beginning of the employee lifecycle to the end. If companies fail to foster a diverse environment, retention and engagement rates are at risk.
As talent shortages continue, more than a third of leaders say they struggle to attract talent in new markets. As increased competition continues, growing and retaining talent will become more important than ever. That’s why G-P built the Employer of Record (EOR) model to enable companies to foster global growth quickly and compliantly.
Go global quickly and compliantly with G-P.
To keep up with today’s fast-moving economy and widespread talent shortages, leaders need to rethink their strategy. Businesses must prioritize a global mindset to keep up with today’s fast-moving global economy.
For over a decade, G-P has helped companies like Kraft and Karger Publishers plan, hire, and manage global teams in 180+ countries.
Our Global Growth Platform™ simplifies every step of global expansion for companies of all sizes. And with G-P Meridian Contractor™, you can hire and pay contractors for both short and long-term projects.
We are G-P, your partner in globalization. Contact us today or request a proposal to see our platform in action.
