With its official launch in the region, Globalization Partners has a solution to overcome regulatory and portfolio challenges in hiring both within and outside of Asia-Pacific, says its newly appointed general manager Charles Ferguson
For companies looking to expand their operations into new markets, there is an invariable dilemma. Is the business potential justified by the expensive and time-consuming exercise of setting up a legal entity in a different country?
Many economies in Asia are among the most attractive business destinations in terms of growth potential. The internet economy for Southeast Asia hit $100 billion for the first time in 2019, according to a Google, Bain and Temasek report. Growth is anticipated by the report to touch $300 billion by 2025.
And yet, there are issues to contend with for any company that wishes to venture into these markets. In a foreword to the 2020 edition of the Doing Business report, World Bank Group president David R Malpass wrote, “An entrepreneur in a low-income economy typically spends around 50 percent of the country’s per-capita income to launch a company, compared with just 4.2 per cent for an entrepreneur in a high-income economy.”
How an Employer of Record helps with global expansion
Balancing investment and output, is where Globalization Partners steps in. Its Employer of Record (also known as an EOR) solution helps companies hire talent around the globe, without setting up a legal entity or a physical office in another country. Instead, Globalization Partners handles payroll, taxes, benefits, and compliance using its worldwide entities. Unencumbered by administration and management issues, the business can now hire the talent it needs to aggressively pursue opportunities and determine the true potential of a new market.
Founded in 2012, Globalization Partners has been USA-focused for a large part of its existence, helping firms from that country expand internationally. With its launch into Asia-Pacific and Europe, the Middle East and Africa, the company is now taking its services to other key markets around the world.
In pursuit of this goal, Globalization Partners has appointed Charles Ferguson as general manager for Asia-Pacific. A veteran in the human capital space in Asia, Ferguson has previously worked for Tricor, ADP and SAP. Speaking to DealStreetAsia, he said, “The strategy is to look at organic growth opportunities within Asia. We can also tap into a net export of opportunities, as Asian firms expand to South America, EMEA, North America, etc.”
Speaking of Globalization Partners’ solution, Ferguson said, “Today, with the various technology platforms, a company can find, acquire and retain talent anywhere in the world. But one aspect that hadn’t changed was that in order to make those hires, you needed to start an entity in that market. Now that you have Globalization Partners, setting up that entity is no longer necessary.”
Using technology to drive growth
Globalization Partners offers its Employer of Record solution in 187 countries, enabling companies to onboard new team members in just a few business days. The firm charges a percentage of the total cost of employment. This fee provides access to the company’s technology solution. Clients log in to Globalization Partners and access insights specific to the country that they are operating in. They can quickly generate compliant employment contracts. Ferguson said, “We have been investing since day one in our technology, which allows us to be super-efficient and extremely engaging with both our customers and the professionals they employ.” Globalization Partners also offers in-country HR expertise, to provide guidance about local employment variations, concerns and regulations.
Companies choosing the EOR option ought to exercise some caution when looking for the right partner. Ferguson said, “Many of the companies who claim to be an EOR are aggregators using local service providers. You are entrusting your brand and future in a market to a firm that may not be reliable or accountable. That can lead to hefty fines, breakdowns, and other challenges.”
The Globalization Partners expansion roadmap
The top priority after the official launch encompasses markets that Ferguson considers the “usual suspects”: Australia, New Zealand, Singapore and Malaysia. These markets are picked due to their maturity as well as the use of common law when it comes to the service Globalization Partners provides its clients – legal compliance and risk aversion.
Towards the end of the year, the focus will shift to the wider ASEAN region. Ferguson said, “Because of what’s happening globally with respect to trade friction, shifts in supply chain and favourable demographics, a lot of foreign direct investment (FDI) is flowing into the region.”
He considers Korea and Japan important markets for inbound and outbound business. And next year, there will be a sharper focus on India, China and satellite markets like Macau and Hong Kong.
In terms of Globalization Partners’ continued growth, Ferguson takes a long-term perspective and believes in the inherent resilience of the region. He said, “Asia-Pacific has been remarkably stable – economically, politically and socially – if you consider the global financial crisis and the recovery thereafter. That stability has been harnessed as a catalyst to diversify our economies and grow. We wrote the original narrative for how to harness supply chain, positive demographics and governance support to power a rapid growth economy.”
Why technology firms, PEs and VCs should pay attention
The largest client base for Globalization Partners has been firms in the technology sector. Ferguson sees a huge opportunity in the Asia-Pacific region which is a hub for companies working in areas like fintech, cybertech, adtech, martech, blockchain, AI and machine learning. He said, “The firms that are on hyper trajectories of growth are in the technology space. Regardless of the vertical, we cut across a number of different horizontals when it comes to people that we engage with. It could be finance, executive leadership, sales or HR.”
Globalization Partners is also working with VC and PE firms who consider the solution a great way of driving efficiency, while at the same time, working with less complexity and risk exposure. Ferguson said, “If a growth asset has been in existence for a while, it has typically established entity structures across different countries. Not all of these entities are necessary or even alive. The investors want to increase efficiency, but don’t want to get rid of the talent. And so, they leverage our solution to compliantly retain those team members. That’s a common use case.”
The vision driving Globalization Partners
Nicole Sahin, CEO of Globalization Partners has set a vision that is similarly the de facto solution for businesses as they look to expand into new markets. Ferguson said, “Just as Google became a buzzword, we want our company name to become one too. I’d like to hear people say ‘let’s look to Globalization Partners to fast track our expansion’ or let’s ‘GP our expansion’. Not everyone will say that with the ubiquity of Google, but I want to evoke a response that’s eager and impassioned, when a firm wants to launch into a new market.”
There is a pressing need for such a solution; evident from the reaction received from corporate firms. He said, “They always say ‘I wish I had known about this earlier.’” Making more corporations aware of Globalization Partners and its advantages over more traditional approaches to global expansion is a key part of his mandate.
He said, “There is an opportunity to educate the market. To make countries realise that they can participate in the paradigm shift towards remote working and access the global talent pool.”
Singapore serves as a great case in point. Ferguson said, “It is a small market with huge potential as a global hub. We have an opportunity to not only attract FDI and help companies establish here, but to also raise the profile of Singaporean talent. Singapore becomes not just a destination, but a place to hire top talent. Globalization Partners can facilitate that.”
This article was created in partnership with Globalization Partners. Please visit Globalization Partners to learn more about expansion tips and updates