Over half (58 percent) of UK businesses say that hiring and onboarding overseas staff is challenging, according to new research from Elements Global Services.
Surveying 500 UK businesses across seven key industries, including technology, finance and manufacturing, the research revealed navigating political and economic uncertainty as the most common barrier to future expansion plans (cited by 36 percent), followed by difficulties in hiring and onboarding overseas employees, and overcoming language and cultural barriers (both cited by 29 percent).
When it comes to the biggest challenge involved in employing staff overseas, setting up global payroll, benefits programmes, and other HR essentials; costs and time involved in recruitment; and overcoming cultural barriers between overseas and domestic staff were cited as equally difficult (24 percent each).
Despite these difficulties, 69 percent of businesses report plans to expand internationally within the next three years.
“It’s a less than ideal time for UK HR”, said Rick Hammell, CEO of Elements Global Services. “For many organisations, the ambiguity brought on by Brexit and other geopolitical circumstances has complicated processes which were already quite difficult to begin with: navigating the legal and cultural environments of other countries is already a complex undertaking. Nonetheless, it’s very reassuring to see that businesses are still planning to pursue global growth in the face of great uncertainty.”
Brexit’s uncertainty troubles a substantial minority of businesses, with 49 percent claiming that it has already had a negative impact on their prospects. However, over half (51 percent) are untroubled, claiming that Brexit has had either no impact or a positive impact so far. These results were almost identical when businesses were asked about the likely impact 12 months from now.
If the UK’s exit from the European Union is untroubling for many businesses, many more still see opportunities for growth in Europe: 82 percent cited it as their most strategically important region for international expansion, with North America (31 percent) and the Middle East (20 percent) coming in a distant second and third.
When asked about the three most important factors when choosing a country for international expansion, 60 percent cited economic stability and potential for economic growth; 34% cited access to local employees with desirable skills; and 29 percent cited the region’s reputation for enterprise-friendly governments and institutions.
“Enthusiasm for international expansion is fantastic, but it should always be tempered by practicality”, added Hammell. “Global expansion always comes with challenges and costs for HR: there are always systems to expand, cultural barriers to lift, and laws and regulations to comply with.”
“With Brexit looming large over most businesses and most HR functions, effective resourcing and substantial preparation are more important than ever.”