How Do You Get Around the Headache that Expanding to the US Entails?
Successful businesses that are expanding to the United States have a lot to look forward to. A lucrative market, swathes of new customers, enticing investment opportunities, and the prestige of ‘cracking America’ are among some of the highlights, but – what about the challenges?
One of the biggest challenges that expanding to the US entails is the one dubbed the ‘HR headache’ – that is, the difficulty of staffing your overseas office with the right people.
Having staff on the ground is critical: it will ensure the US arm of your business is running smoothly, you’ll gain valuable insight and knowledge of local markets and competition, and your customers will also have a point of contact within their own country.
However, the only businesses that are likely to succeed with an overseas expansion are those that can identify and overcome the two-part challenge of securing the right US worker.
The HR Headache: Part 1
One way to find the right worker is to send an existing worker over to the States. However, sending your existing staff overseas could reveal complex matters relating to immigration; something that will certainly cost a lot of time and money navigate. And, this option entirely depends on your employees being willing to relocate to America – not something that’s guaranteed.
To make matters worse, your existing employees are likely to lack local knowledge and insight of your new market, meaning that although they know your business, they don’t know what your business needs in the US. So, sending your existing staff overseas is unlikely to be worth the cost and administration it actually entails.
The HR Headache: Part 2
Based on the above, it stands to reason that you should hire a US worker instead. However, this is difficult too. For one thing, your expanding business will need to be registered in the USA and be established as a subsidiary company. You’ll also need to obtain a Federal Tax ID number, and both of these things involve a tremendous amount of capital investment, time and paperwork.
So, if you can’t send your own employees to the US, and hiring US employees of out of the question right now too, what can you do? Well, there are two solutions…
Solution 1: Use contractors in the short-term
One way to get around these challenges is to simply contract professionals based in the US. Whether you need project managers, sales people, marketers or something else, there will be freelancers and consultants available to complete the work you need doing. However, finding them is another matter, and relying on them long-term is a question you’ll need to ask yourself from a strategic point of view, as well as something you should discuss with your lawyer and international tax advisor.
Solution 2: Use a third-party agency to hire for you
Alternatively, you could get around the HR headache another way: you could use a third-party agency to hire US workers for you. Companies such as Foothold America specialise in helping businesses operate in the USA without needing to set up subsidiary companies, and they do this by directly hiring workers on your behalf.
Although the individual will be an employee of the agency, the worker will only perform work for you, they’ll carry your business card and your company email address. And, an agency like this will also take care of the HR logistics, meaning you won’t need to learn about 401(k) programmes or any other complicated employment matters. The agency has a number of frequently asked questions about setting up in the US, offering answers to the ‘HR headache’ that expanding to the US entails.
So, as you can see, expanding to the US isn’t a straightforward matter. However, there are many ways to navigate the challenges it entails, so consider your options and proceed once you’re comfortable with your decision.
Founder Dinis Guarda
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