Retail brands expanding cross-border: the people problem nobody budgets for
Retail expansion plans tend to be built around property, stock and logistics. Lease terms, fit-out costs and supply chains are costed in considerable detail, with contingencies in case they overrun. The people who will run the new operation, however, often get far less attention.
In practice, staffing, payroll and local employment law are core to every new store or online launch, and they usually take longer and cost more than first expected.
Why Staffing a New Market Is Rarely as Simple as Hiring Locally
A new market needs more than shopfloor staff. Appointing experienced store managers, making changes to e-commerce logistics and supporting the customer service team should all be considered, often before the brand has a legal presence in the country.
Notice periods, probation frameworks and employment contracts vary by jurisdiction, so a template approach copied from what works in the original country or region may not be valid. Recruitment also needs to be adapted to the local market. Salary benchmarks, candidate management and typical benefits may need extra attention to attract experienced people and keep offers in line with local laws and industry regulations.
How Seasonal and Temporary Hiring Rules Change From Country to Country
Seasonal peaks add more pressure because retail relies on temporary and fixed term workers, and these contracts are often tightly regulated. The OECD’s employment protection indicators compare countries’ rules on dismissal and temporary contracts, and those rules differ considerably. A seasonal staffing model that works in one country may be restricted in another, whether through rules on agency workers or the cost of ending a contract.
The Payroll and Benefits Obligations That Arrive With the First Hire
Once someone is employed, the employer must register with the local tax and social security authorities, calculate deductions, issue payslips and make regular filings. Pensions, health contributions, holiday pay and sick pay are set locally, so it’s vital to understand what applies where.
In retail, shift patterns and hours can change week to week, so accurate handling of pay and overtime is essential. For a company running payroll in several countries, separate providers and spreadsheets can quickly produce inconsistent reporting and limited visibility of the true cost.
Local Employment Law and the Cost of Getting It Wrong
Working hours, overtime, minimum wage, rest breaks and trading day rules, including Sunday working, differ by country and sometimes by region. Entering through a franchise partner can shift much of this burden, an approach we noted when lululemon entered Romania. Brands that operate their own stores, or hire head office and retail staff directly, take those obligations on themselves, which can increase the risk of getting things wrong.
Options for Employing Staff Before a Local Entity Exists
Setting up a subsidiary takes time and money, and it is not always justified for a test market. One alternative is an employer of record (EOR), which becomes the legal employer in the country, handling contracts, payroll and statutory contributions while the company controls the day-to-day work. This can suit new markets, pop-ups and early head office roles.
Providers such as GoGlobal offer EOR services alongside entity establishment, global payroll and broader HR services in more than 100 countries, so a retailer can start with one arrangement and move to another as the market grows. The trade off is that an EOR is usually a transitional structure, and brands expecting sustained local trading will eventually need to reconsider which structure suits their current stage.
What to Build Into the Budget Before Opening in a New Market
A people budget for a new market should typically account for:
Recruitment and onboarding, including any head office roles
Payroll, benefits and health contributions
Legal and HR advice on contracts and working restrictions
The cost of changing structure later, such as moving from an EOR to an owned entity
Treating these as key expenses rather than afterthoughts gives finance and operations teams a more realistic view of what a new market will cost, long before the first retail store opens.
