People management may be the biggest barrier to overseas growth

Nearly all organisations (93 percent) say that growing and managing their employee base in new countries limits their international expansion to some degree, with more than one in ten (12 percent) stating that it limits their expansion completely. This is according to the HR Challenges of International Expansion report (registration) by the Economist Intelligence Unit (EIU), commissioned by ADP.

The report surveyed 1,000 C-Suite and HR executives globally, across a range of different sectors to explore the motivations, priorities, and challenges of international expansion. The study revealed that businesses grow their operations for various reasons- and face varying obstacles when expanding internationally.

According to the survey, 46 percent of respondents say that recruitment challenges are one of the greatest obstacles to their global expansion, while 71 percent say that HR-related issues are some of the most challenging barriers they have when expanding beyond their home country. The prevalence of these challenges shows that organisations must focus on their employees- both current and prospective- when driving to create an international workforce that can compete on a global scale.

Commenting on the findings, ADP UK’s Managing Director Jeff Phipps said, “Despite the world becoming even more connected, the research shows that companies are struggling to manage their employees globally. The inability to manage a global workforce effectively can hinder businesses’ ambition for international expansion and cripple progress.

While companies must understand that growth always brings with it many challenges, they are not insurmountable obstacles. These challenges may not be straightforward, as aside from logistical hurdles there are often also cultural differences between different geographies that managers need to understand and adapt to. The ability to plan, manage, and oversee an international workforce well is something that can make all the difference during this transition period.