For a business, the decision to open an international office can never be taken lightly. It’s still the opinion of many business owners that expansion is necessary for growth. In fact, a 2016 survey by Wells Fargo found that 87% of US firms believe that international expansion is fundamental for long-term growth. As with any major decision, there are many positives and negatives to opening international offices. Here’s a look into why a business may choose to expand, with particular attention to the effect on recruitment of talent.

Why Do Businesses Expand Overseas?

One of the main reasons a business may choose to expand internationally is to access new markets. For many companies, it offers a chance to conquer new territories – possibly even ahead of their competitors. It allows them to reach more consumers than was previously possible, inevitably increasing sales. Other reasons why a business might move overseas include diversification of the company, foreign investment opportunities and an insight into new cultures.

Accessing A Bigger Pool Of Talent

If a business does make the decision to expand internationally, it will have access to a bigger pool of talent. However, many businesses choose not to recruit from the country they’ve diversified into. Often senior roles are awarded to existing members of the team who are then moved to the new offices with the company. In some ways this is a smart move for businesses as they’re ensuring their new offices get off to a great start with employees they trust. For example, if a business was expanding into the UK, they may encourage trusted employees moving to UK from US with a range of bonuses and packages. On the other hand, it could also be preventing them from taking on board fresh new talent that the country has to offer.

The minds and knowledge of new people within the business may breathe life into the company. For a business looking for a very specific set of skills, there’s a much better chance of finding a talented individual that matches the job requirements if there’s the option to open up the search to overseas candidates.

What Does This Mean For A Business?

International labour can increase productivity, offer advanced language skills and add some culture and diversity into a business’ workforce. These skills and quality can be great assets for a business. For example, when Netflix expanded into Amsterdam, a city well-known for being a hub for technology, it was able to hire multilingual and internationally minded employees. They were also to understand consumers wants and needs across a number of territories across Europe, invaluable for an originally all-American company.

The Cost Of Expansion

Expansion can be an expensive process for businesses. Which is why it’s so important that business owners fully consider the pro’s and con’s of what opening an international office would mean for their company. While building a team of talented individuals around the world does offer plenty of advantages, there are challenges that come with such a move. A business owner should ask themselves whether the same level of global business can be achieved via technology, including business calls and better communication with only a few individuals dotted around the globe as opposed to a whole office. If the answer is yes, then it may be that the company isn’t quite ready for a high level of expansion just yet. Alternatively, if the business could be better run by a team of talented international employees, then there’s every reason to go forward with the move.

This Guest Blog is written by Jamie Costello, you can follow Jamie on Twitter or LinkedIn.