14 Globalization Benefits Companies Should Know About

What is globalization?

Generally speaking, globalization is the free flow of information, technology, goods, culture, cargo, capital, and ideas between citizens of different countries, or the interconnectedness among countries. Globalization has been an important part of numerous industries, including business, geopolitics, travel, media, and especially startups and tech.

When human beings learned how to navigate the oceans, the rivers, and the seas, the exchange of goods, people, services, and ideas started happening at a quicker pace. Over the next thousands of years, advances in technology, from modern air travel to dial-up internet, made communication across the globe more feasible.

Now, with remote work tools like Zoom, Google Meet, Slack, and email, corporate communication from one continent to another is almost instantaneous. The advent of modern air travel, on the other hand, has made it easier for teams from all over the world to meet up in-person.

Why is globalization good for business?

The rapid spread of Covid-19 revealed to all of us just how interconnected our world and the global economy was, especially as the supply chains started failing and shelves in stories across the world stood empty.

It’s no secret that consumers want better products and services, as well as more access to capital, all at a lower cost. Knowledge workers such as engineers and marketers want meaningful jobs, even if it means working remotely. In today’s market, going global is necessary to remain competitive. Globalization in business, then, is how companies and organizations build out their international influence and begin operating in multiple countries. Increased cooperation globally, moreover, also eases the possibility of more war.

Advantages of globalization

As businesses begin to expand and scale up, looking abroad for top talent and new customers can be a good option.

Some key advantages of globalization include:

1. Gaining access to several new markets

2. Better products and services, tailored to new markets

3. New culture

4. Spread of technological innovation, from new medicines to more secure cloud infrastructure

5. Lower costs

6. Economies of scale, in which increasing production leads to savings

7. Higher standard of living across globe

8. Access to new talent, including workers with niche skill sets

9. Building a team that covers multiple time zones, which can be especially helpful for sales and customer success departments

10. Greater access to vendors, contractors, full-time employees, consultants, freelancers, and agencies from all over the world

11. New trade opportunities

12. Access to additional channels of capital, natural resources, and raw materials

13. More potential for growth

14. Staying ahead of the competition

The pros of globalization businesses are clear, especially for companies looking to tap into new and emerging markets and unique economies. It’s no secret that the free trade agreements in the European Union and North America have been great for promoting both business and international peace.

What are some of the challenges or disadvantages of globalization?

Going global can take your company to the next level, but that doesn’t mean that you won’t face challenges as you expand your business across borders, including:

1. Managing employee immigration status

2. Development of an international tech stack

3. Local job losses

4. Traffics, export fees, and international taxes

5. Global payroll

6. Global benefits

7. Global compliance

8. Language barriers

9. Time zones

10. The substantial upfront capital costs of setting up an entity, subsidiary, or branch

11. Misclassification of foreign workers (and associated fines)

12. Converting payments from different financial systems

13. Foreign transaction fees

14. Inflation, recession, and the changing winds of economic growth

15. Gentrification in cities that attract expats, which leads to cost of living increases in places like Mexico City

16. Communicating value of a product to a new audience through marketing and PR

17. Environmental concerns, especially for developing nations

18. Political instability, especially during changes of national power

19. Supply chain and transportation disruptions, which can impact production

Globalization will change how your business operates day-to-day. As you expand abroad, choosing the right partners is not only important for business. It’s also the right move ethically.

The cons of globalization shouldn’t stop your business from expanding internationally. Instead, business leaders need to create bulletproof strategies while expanding into new markets.

Remote work, globalization, and global employment

When the pandemic sent workers across the globe home in March 2020, people stopped commuting to offices and business trips, like leisure travel, ground to an arresting halt. Successful companies adapted by moving their business operations online, which meant more meetings on video conferencing tools, like Zoom and Google Meet.

This sudden shift meant that more companies adopted flexible working policies, especially work for home. For companies, this meant that they could start recruiting talent from across the country, so long as employees were willing to work in the company’s usual time zones.

Now, the challenge for companies is finding effective ways to share knowledge and comply with third-party data regulations, like the GDPR in Europe or CCPR in the United States.

Hiring across borders is the future of work

Some companies took the remote work revolution as an opportunity to hire top talent from around the world. Global businesses from major enterprises and Fortune 500 companies to small startups and entrepreneur-led ventures have benefited from hiring internationally.

Rather than go through the more traditional routes of opening an entity, subsidiary, or foreign branch, many companies opted to hire more quickly by partnering with an EOR (employer-of-record) services provider like Via.

In many foreign countries, it’s hard to hire new employees without an established business or physical presence. By partnering with an EOR, you won’t need to worry about understanding international employee expectations in terms of holidays, vacation time, salary, and benefits. An EOR service takes care of all of the HR paperwork so that you can tap into a booming labor market without any additional stress.

With an EOR approach, you can avoid some of the major problems of expanding internationally, such as:

• High investments costs

• Confusing local bureaucracy, tax laws, and employment regulations

• Immigration headaches, especially work visa paperwork

• International finance challenges

• An EOR can help companies overcome some challenges of globalization

Why companies choose Via

Smaller companies and major enterprises want to hire employees around the globe, but are unsure of how to navigate global expansion from an onboarding and hiring perspective. Via makes hiring international talent seamless. With our-easy-to-use platform, Via manages the local HR processes for employment such as work visas and permits, benefits, payroll, background checks, and more. Our team of local legal experts ensure that your company remains compliant while expanding abroad. As your employer-or-record/entity, Via assumes responsibility for employment liability, so that you can focus on what matters: recruiting and managing your team. We shoulder the risk.

With Via’s transparent pricing, you can pay full-time employees or contractors across borders with no hidden set-up fees, no foreign exchange or transaction fees, and no minimums–start with 1 employee and scale up at your own pace. You decide the path of your business’s growth.