Over two thirds (69%) of UK businesses will expand internationally in the next three years, according to a survey of 500 key decision makers by Elements Global Services, with 82% considering Europe to be the most strategically important region to expand into.
This is despite the fact that nearly half (49%) have already felt the negative impact of Brexit on their business, two years on from the vote to leave the EU.
When businesses were asked about their top three biggest Brexit concerns, the most popular responses were ensuring trade with EU countries (56%), followed by a negative impact on the economy and consumer demand (36%), and the declining value of the pound (29%). Only 29% said that Brexit would have a positive impact on their business in a year’s time.
Rick Hammell, CEO of Elements Global Services said, “Thankfully, Brexit hasn’t dampened spirits for global expansion. UK businesses are seemingly still ambitious for global expansion despite geopolitical uncertainty – most want to go to Europe, followed by North America and the Middle East. Expanding your business abroad gives you the chance to explore new markets, beat your competitors and hire brilliant new people. And right now, at least, there’s no reason to believe that Brexit should halt those ambitions.”
When asked about the three most important factors when choosing a country to expand into, the most popular responses were economic stability and potential for economic growth (60%), followed by access to local employees with desirable skills (34%), and the region’s reputation for business-friendly government and institutions (29%).
By comparison, when asked about the three biggest challenges they would face when expanding abroad, the most popular response was navigating an uncertain political or economic climate (36%), followed by hiring and onboarding overseas employees (29%), and ensuring compliance with overseas business and tax regulations (26%).
“It seems ironic that most UK businesses are worried about navigating uncertain political climates if they expanded their business abroad, considering how uncertain Brexit is”, continued Hammell. “I would go as far as saying that British businesses that are thriving despite Brexit uncertainty would probably be better at navigating this than they give themselves credit for.”
Hammell explained how companies can get over the hurdles of expanding globally. “Of course, there are other challenges inherent to expanding a business globally, including ensuring compliance with many different business regulations, and hiring, onboarding and managing new staff in line with local employment laws. Working out whether you have the resources and the time to manage the process from beginning to end can be tricky – and this miscalculation is often the reason that businesses fail to succeed on the global stage.”
“But there are service providers that can help,” he concluded. “An Employer of Record can assume all legal responsibilities involved in employing staff on your behalf in your target country, at a fraction of the cost of going it alone. This means you can focus on the strategic direction of your company’s global expansion.”