In this interview, John Mazzone, VP of Finance at Globalization Partners, discusses international hiring and cost control that will make your CFO happy.
Hi John, for those of us who are not familiar with your work, can you please introduce yourself?
I am the Vice President of Finance at Globalization Partners. My career started as a crew chief on B1 Bombers in the U.S. Airforce’s Strategic Air Command. After completing my graduate studies, I spent over 20 years in technical accounting and operational finance. As an auditor for both PwC and KPMG, I worked with companies ranging from small startups to complex SEC reporting entities. I also led due diligence teams and advised private equity and strategic buyers. I have held key financial positions at an international public biotechnology company and several large international financial investment firms.
I understand the challenges companies face when considering international expansion. One of the key reasons I joined the team at Globalization Partners is because I understand the value and importance of consistently and compliantly laying the financial groundwork for global expansion and its essential role in long-term success.
You’ll be talking about the benefits of expanding globally and strategies for hiring internationally. What are some of the benefits of hiring internationally?
The talent landscape has changed. For a variety of reasons, companies can no longer hire in the same zip code, nor do they want to. Within thriving domestic markets, we see key talent shortages resulting in companies waging “Wars for Talent.” This has forced companies to start looking into often unconsidered regions. Talent acquisition and HR leaders are finding largely untapped talent pools with highly sophisticated labor forces that more than adequately help fill the domestic talent gap. The ability of talent to work remotely has facilitated this.
The remote work trend has changed the mindset around global expansion and has given companies a first–hand look at the advantages of diversification. According to Globalization Partners’ recent Global Employee Survey, employees who work on global teams are happier, more productive, and more in tune with fluctuating trends across the world.
The other obvious advantage is the huge potential for increased revenue by adding new markets and new customers. This has given a company the competitive advantage of being first-to-market and first to establish brand loyalty. Diverse language and cultural competencies come into play here by making it necessary that local and regional sensitivities are understood and incorporated into new market messaging.
Which risks represent the largest barriers to expansion into new countries?
The risks can be overwhelming to companies that are contemplating international expansion as they delve into the complex and dynamic labyrinth of global compliance. Tighter worker protections abound, and noncompliance on the part of the employer comes with penalties. It is essential that companies go into new markets with a complete understanding of local laws and customs.
As an example, in the European Union (per 2014’s Posted Workers Enforcement Directive) workers sent to another EU member state by their employer on a temporary basis are entitled to the same employment and working conditions as locals. Severe and repeated noncompliance can result in a financial penalty of up to 500,000 euros per employee. Compliance is not only vital to avoid costly fines but also critical to retaining employees. On a global scale, the importance of compliance multiplies as complexity increases.
This is where a global employment platform like Globalization Partners comes into play. We have established entities in over 187 countries that are fully and legally compliant with local laws and customs. This along with our in-country HR specialists ensures our customers that their talent is taken care of, and any issues are quickly and compliantly dealt with.
How can HR meet the challenges of international expansion in order to tap into the international talent pool and support their company's global growth?
For HR leaders, employee satisfaction and legal compliance are top of mind. Before our CEO Nicole Sahin founded the Employer of Record market, launching a team in a new jurisdiction could take months or longer, depending on the country and very substantial investment before the company was even allowed to operate. A global employment platform like Globalization Partners can enable a company to hire talent in a new country in a matter of hours—or in some cases minutes—with the assurance of being completely locally compliant.
Zeeto, a leading marketing data discovery company, is a recent customer who explored the opportunity of having a global remote team. They first looked at hiring in Mexico and quickly realized how complicated the process is. They turned to Globalization Partners. We were able to help them quickly and compliantly hire talent from Mexico. They later worked with us to expand into Ukraine, Poland, and Ireland and have seen accelerated growth and profits.
How does a Global Employer of Record model work?
Globalization Partners founded the EOR market as a way for companies to legally and easily expand internationally. Companies find the talent, and we put that team member on our fully compliant, in-country payroll. We serve as the legal employer, handling payroll, taxes, and benefits and ensuring compliance with local employment laws and regulations, freeing up companies to manage and direct the daily work of their team members.
With the global remote work trend becoming more dominant, our proprietary SaaS global employment platform that not only automates much of the EOR process but also uses data-driven tools that assist customers on benefits decisions and leads them through what is considered the norm in each country they are expanding into.
For those who can’t attend your Friday afternoon session in Las Vegas, what are your recommended actionable steps for smoothing the path to grow globally, hiring internationally, controlling costs to get the green light from a CFO?
Remote work has opened new horizons for every company. No doubt your company leadership has considered or even started hiring in other countries, either for global market growth or broader hiring opportunities.
As you grow your team, you need to focus on what’s essential for success on an international scale. The foundational basics can be summarized as the 4 Cs: culture, costs, compliance, and capability.
As a leader embarking on international growth, you must:
- Construct an engaging work environment that embodies your culture
- Build with ample consideration for your bottom line
- Set solid foundations in compliance.
If you’re building your foundation on these principles, you’ll be far more likely to get a green light from your CFO. The pandemic has reshaped attitudes about remote and borderless work. CFOs who can reimagine their business models to tap into the global talent pool will build their companies’ most important asset: their people.
Switching things up - the entrepreneur in me has to ask a question about hiring internationally as a small business with less than 25 employees. We’ve gone through our first H-1B process with an international hire, and have been using a third-party staffing agency to locate international talent. The cost savings are one benefit, but we’ve found that the level of talent we’ve been able to onboard for our team outpaces what we can find in the US. Can you speak on the trends of international talent for a small business, as well as some of the items a small business should be aware of when pursuing international talent?
Global teams are quickly becoming the norm for companies of all sizes. Smaller businesses like yours can work with us to hire international employees without having to establish a business entity of their own in the country where they hire. This can also help to fill a lot of domestic talent gaps.
It’s important to have a foreign expansion strategy in place. This should start with an internal business analysis so you can see what gaps need to be filled. From there, you can begin analyzing the regions you’d like to expand to and see if they’ll fulfill the growth you’re looking for. Once you have a general idea, you can begin creating a timeline, budget, and plan.
The pitfalls are potential cost and compliance. My advice would be to find a trusted partner like Globalization Partners who has legally established entities in the country and doesn’t outsource to third parties. Our established entities enable us to better control both cost and all legal compliance issues, which provides safety to our customers.
Alright, last question (thanks for hanging in there). For anyone who won’t be able to make it to your talk about International Hiring and Cost Control that Will Make Your CFO Happy in Las Vegas, what do you want them to know?
In a recent global survey by CFO Research and Globalization Partners, 81% of CFOs indicated their company’s long-term growth strategy includes international expansion—either currently ongoing or in their future plans. The survey also uncovered changing perceptions about hiring and remote work because of their pandemic experiences with 85 percent of respondents indicating the ability to tap into a more cost-effective, global talent pool that is equipped with the appropriate skills would be desirable.
Some of the things I would like people to know are:
- Global remote teams are here to stay and will play a vital role in a company’s growth
- CFOs are embracing work-from-anywhere models in the wake of the pandemic and are seeing the results to justify it
- CFOs are taking a global view within their business strategies and hiring approaches
- CFOs should know a global employment platform is the key to fast international growth and provides a competitive advantage.
Learn more at John’s SHRM session:
In-Person Saturday 09/11/2021 02:15 p.m. - 03:15 p.m. PT