Companies are increasingly embracing globalization—and for good reasons. By looking beyond their immediate geographical borders, businesses can reach more consumers, increase revenue potential, and even fill supply chain gaps.
Emerging markets—countries characterized by rapid growth and industrialization— are especially appealing to savvy business owners. The Organization for Economic Cooperation and Development (OECD) notes that emerging markets’ share of global trade volume jumped from approximately 32% to 46% from 2000 to 2019.
Their purchasing power is growing. According to McKinsey, global prosperity as a whole is on the rise: By 2025, over half the world's population will have extra income left over after meeting basic needs, like food and shelter. And the majority of that growing "consuming class" will be located in emerging economies.
The opportunities in emerging markets are clear. But succeeding in these regions is easier said than done. Companies have to grapple with everything from unfamiliar government regulations to foreign languages and diverse cultural norms. Hiring local managers can help companies looking to enter emerging markets overcome these hurdles in the short term and thrive in the long term.
If your company is planning to expand operations into another country, it's smart to put a local manager at the helm. You'll have a "boots on the ground" presence, a trustworthy person who can liaise between your central headquarters and the local offices. Hiring locally in emerging market countries also has distinct benefits.
When hiring in other countries, language can be a barrier. Even if you designate English as your company-wide language of communication, you still need your local emerging markets offices to be able to communicate externally—for example, to customers or vendors—in their area. Having a local manager who speaks the language is the answer.
Different countries don't just use different languages. There may also be cultural differences in the ways people interact and speak to one another. For example, some Muslim cultures prohibit members of the opposite sex from shaking hands, and many Asian countries observe strict, respectful social hierarchies that may seem overly formal to American and European partners. Having a manager who's familiar with local cultures helps to avoid possible faux pas.
Some companies entering emerging markets skip local hiring and instead send people from their headquarters abroad to launch operations. While it might seem convenient, this can be a detriment to corporate diversity. Local hiring brings more heterogeneity to the company, which can influence operations everywhere and appeal to a broader consumer base.
Another drawback of sending a professional from headquarters to an emerging market abroad is the cost. They may have a higher salary than a local manager would demand, for example. Plus, you'll have to pay relocation costs. Local hires tend to be more cost-effective.
Hiring a manager is only the first step. As you expand in a given emerging market, you'll likely need to hire more people. Having a local manager will help. You'll have a trusted partner on the ground to help with personnel decisions, simplifying many of the challenges of international HR.
Emerging markets are generally characterized as countries undergoing significant economic growth and industrialization. They may be moving away from traditional economies, like agriculture or raw materials exports, and investing more in innovation and production, for instance.
The International Monetary Fund (IMF) classifies the following countries as emerging markets:
When hiring in these markets, try local resources. For example, job search platforms like Indeed have verticals for countries beyond the United States. You can also try a local employment agency or Oyster’s resources for hiring abroad.
To simplify the global hiring process, consider using hiring automation tools. Hiring automation can be used for various tasks, like identifying and engaging potential job candidates, screening applicants for basic credentials, and scheduling interviews.
When you hire a local manager in an emerging market, make sure you give them the salary and benefits they deserve. Oyster makes it easy to manage employees in more than 180 countries, giving you a single source for streamlined payroll while helping you avoid compliance roadblocks.
Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.