Impact of Market Maturity on Workforce Expansion Plans

1043

There are several ways to compare the workforce of different countries – by workforce size, economic conditions, unemployment, skills shortages, etc. But two market dynamics that can have the highest impact on your global expansion strategies are likely to be market maturity and regulatory constraints. In ManpowerGroup Solutions' Global Market Landscape, countries around the globe are categorized in four quadrants that reflect their comparative market maturity and the flexibility of their regulations.

2x2 Q2 16Perhaps the most interesting aspect of this diagram is that there are no patterns related to any particular region. Often, people assume that if two countries are in Latin America, they will be very similar when it comes to local regulations or workforce dynamics. However, this isn't true. In fact, even where we do see two countries grouped near each other, like China and Japan for instance, there are still substantial differences in how you can and should engage with contingent workers in those markets. How a country’s ministry of labor defines “temporary worker” or “subcontractor”’ may be based on contractual requirements, scope of engagement, or even the staffing agency’s license status. This means that no solution will be identical from one market to the next.

The adoption of contingent labor engagement or MSP solutions will make a substantial difference in the opportunities and efficiency that you can derive from expansion into a particular country. And from this graph, it is apparent that more markets are emerging than are actually mature. As a result, how an organization communicates internally with local hiring managers and with local suppliers can truly make or break an expansion effort. Communication, along with local market expertise, is critical to a successful deployment in a less mature or emerging market.

More balanced than the overview of market maturity is the number of countries that have rigid vs. flexible labor regulations. There are almost as many markets in which workforce engagement is heavily regulated as there are markets that maintain loose legislative guidelines. Again, there is no consistency from country to country across any region, but tracking the status of more common regulations can assist you in understanding how much modification your program may require. Legislation on contract duration limits, parity requirements, invoicing policies, and O/T restrictions will impact which workers you can legally engage with, for how long, and under what circumstances.

Knowing that a set of countries falls within the same quadrant on this graph may not provide you with a simple road map to your global expansion, but it will enable you to adopt the right approach and framework for your localized strategy.