Expat or local?
Human resources as an important factor in expansion into new markets.
Businesses of all sizes can achieve substantial expansion most quickly by venturing over the borders.
In the choice of foreign market, besides the basic cornerstones such as economic, structural and geographical data, also above all education levels, availability of qualified personnel and the job market in the target country are of especial significance. The future markets of China and India and the Central, Eastern and Southeastern European markets, with their predicted strong economic growth, are here right at the forefront.
Low wage and ancillary labour costs often attract businesses into new markets. However prudence is necessary here. Renumeration and employment structures, work culture and conditions as well as the availability of qualified skilled personnel often vary considerably – and not just from country to country, but also in the country itself from region to region.
Besides these »hard« facts one must consider the question of »soft« factors: how do I create successful onsite teams? Which employees from the home company can I send abroad? Which positions should I fill with local employees and which with expats?
Here more precise market and culture knowledge is required and it is worthwhile to obtain professional support. The time tested basic formula is a mix of local and international employees – of experienced personnel and good junior staff. A tested concept is for example the combination of local country management with support at the beginning from a finance manager from the parent company. Particularly important is that the sales employees are recruited locally. They not only know the land and the culture but also possess the necessary contacts.
Whether »expat« or »local«, the highest success rate in the filling of first and second level management positions is delivered by advertising the position and a multistage, informed selection process. The international selection process poses a particular challenge, because a consistent evaluation of written applications as well as behaviour and impressions in interviews requires experience and expertise. Collaboration with an international consultancy, who is represented onsite, offers many advantages and guarantees an objective selection with international quality standards. The consistent evaluation of the candidates can be ensured through internationally applicable, informed methods such as potential analysis and knowledge of the local market. By handling the preselection locally substantial cost savings are also achieved.
The decision to found a foreign branch is influenced by many different factors. One very important factor is people and labour power. It is certainly no easy task to enter into the presently very inhomogenous environment of the Asian and Southeastern European countries; however this is a task that is being successfully undertaken every day. One can thus confidently predict that this trend will continue.
