Planning for Uncertainty: Global Staffing Solutions to Facilitate Your Vietnam Market Entry
Global Staffing Solutions (GSS) is a market entry strategy that enables businesses to establish a presence on the ground without having to physically set up a local entity which requires time, capital, and investment. With GSS investors can hire full-time staff while remaining compliant with local laws. Vietnam Briefing explains what GSS is and the advantages of adopting a GSS strategy.
For many businesses, setting up their own company is the only known or viable way to enter a new market.
We have written frequently about the ways to best approach and leverage direct foreign investment models for market entry — such as establishing a company or a representative office in Vietnam. There may, however, be alternative ways to enter a market more nimbly, and with a smaller presence, that is worth considering for an international SME.
Setting up a company typically requires months, during which time the company is not operational, and requires tens or hundreds of thousands of dollars in investment capital, often before understanding the business, financial, consumer, or local cultural landscapes.Global Staffing Solutions: What is it and how does it work?
(GSS) is a market entry strategy that alleviates the stress on businesses to establish a corporate entity and outsources the burden of keeping up with the day-to-day management of an employee’s payroll and the entity’s tax compliance to a local firm. This frees up critical resources for the foreign firm to explore its options in a new or unfamiliar market. In simple terms, the way GSS works is that it enables businesses to place boots on the ground, without needing to physically set up a local establishment. The service works with the third-party service provider signing separate contracts with both – the foreign company and the foreign employee. This means that while the normal day-to-day control and working employee relationship will exist between the overseas company and its outsourced hires, the local service provider in Vietnam will handle all the risk mitigation, compliance, payroll, and benefits on the ground.Advantages of adopting a global staffing solutions strategy
Under the GSS service, foreign companies can enjoy the benefits of hiring full-time staff working in overseas markets and remaining compliant with local laws, without the time and investment required to set up and operate an overseas legal entity. Specifically, it can provide the following benefits to businesses.- Offshore recruitment before setting up an entity
- Employing staff at local labor costs
- Outsourced employee management
- Hiring foreign employees legally and in compliance
- Getting legal support on labor contract issues
- Flexibility in the working relationship
Maintaining an agile and resilient business model
Traditionally, a successful market entry strategy requires consideration of timing and scale relative to the competition, and the ability to leverage complementary assets. However, in this new age of doing business, operational agility has now emerged as a key determinant of success. In this way, businesses should be prepared to rapidly respond and adapt to changes in the market and environment in, both, productive and cost-effective ways. In terms of designing a market-entry strategy, this indicates a shifting focus to different markets, quickly and with minimal costs and risks.Services, like GSS, empower foreign firms with the ability to look at alternatives within a specific sector and try out different strategies or even markets in Asia to plan against supply chain disruptions and establish sustainable long-term operations.
More broadly, GSS provides an effective market entry strategy for companies looking to expand into fast-developing countries within Asia, such as Vietnam, China, Singapore, and Indonesia. Investors can use this in a new market to gain first-hand knowledge of the local business environment and culture – to determine market suitability and formulate an appropriate entry strategy.Uncertainty is an inevitable factor of doing business in any economic climate. Yet, recent black swan events like the COVID-19 pandemic illustrate that now more than ever, businesses need to plan for the unexpected – disrupted global supply chains, destabilized economies, and/or mass lay-offs.
Businesses should not only be familiar with the market they wish to enter into, but also keep an eye out on competing markets. Besides, they must be willing to test the market for themselves before making significant investments as they may not have the time or capital to engineer wholescale transformations to survive, which the ongoing pandemic has necessitated.For more inquiries about preparing for your market entry into Vietnam, please contact us at vietnam@dezshira.com.
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