Challenges and Trends in Global Expansion Across Singapore, Malaysia, and Indonesia

Explore the latest insights from Deel’s Expansion and Hiring Research, uncovering the challenges and trends in global business expansion across Singapore, Malaysia, and Indonesia.

Deel, the comprehensive HR platform serving global teams, has initiated its Expansion and Hiring Research to grasp the current trends and obstacles encountered by businesses in Singapore, Malaysia, and Indonesia when venturing into international markets.

Conducted in partnership with Rakuten Insight, this research involved 900 business decision-makers across these countries, with 300 representatives from each market. Its primary focus was to delve into their inclination towards expanding beyond their domestic boundaries and their strategies for hiring during expansion.

The findings reveal that among the 300 Singaporean companies surveyed, a notable 87% are actively operating beyond their national borders. However, an intriguing discovery is that 65% of these companies have chosen not to employ local talents in the markets where they operate, a higher proportion compared to their Malaysian (61%) and Indonesian (52%) counterparts.

Challenges faced by Singaporean companies expanding overseas are evident:

• 85% of these Singaporean companies expressed difficulties and high costs in establishing a hiring entity, along with struggles in identifying suitable talents in their operational markets.
• Interestingly, despite the higher cost of hiring within Singapore compared to many overseas Asian markets, the majority of Singaporean companies are not opting for local hires.
• The top challenges for businesses looking to venture into new markets outside Singapore were “Local Compliance” and “Initial Setup Cost,” cited by 50% of 274 surveyed companies.

Moreover, 51% of these companies resort to third-party entities for hiring to mitigate the expensive setup for expansion, while an additional 32% are open to exploring this approach.

Singaporean businesses continue to grapple with challenges in securing specialized local talents and have turned to global HR platforms like Deel for hiring talents overseas. An example is Responsible Cyber, a cybersecurity start-up based in Singapore, which utilized Deel’s services to navigate local labor laws and tax regulations across multiple countries.

Karen Ng, Regional Head of Expansion & Market Lead for Hong Kong, Singapore, ASEAN, India, highlighted the research’s significance in showcasing the complexities that businesses in these regions face during global expansion. Ng emphasized Deel’s role in addressing these challenges by offering comprehensive solutions encompassing global hiring, onboarding, management, and payment for a global workforce. Additionally, Deel introduced new services such as Deel Bookkeeping, Employer-of-Record, US Professional Employer Organization (PEO), and Deel IQ, an AI-powered global work assistant.

The study’s key points include:

• 91% of business leaders across Singapore, Malaysia, and Indonesia plan to expand into new markets within five years.
• Businesses from all three markets are investing substantially in global expansion efforts, with Singaporean businesses leading the investment, especially in the consumer manufacturing sector.
• Singapore-based companies exhibit a strong interest in Malaysia and Southeast Asia for their expansion.
• The challenges of cost barriers and local compliance are consistently highlighted across these markets.

The impact of a global workforce is significant:

• 92% of decision-makers believe that hiring globally enhances the skills and capabilities of local talent.
• However, about 59% of businesses operating in overseas markets where they don’t hire locally attribute this to the difficulty of finding suitable talent in those markets.

Since its launch in Singapore in July 2022, Deel has attracted clients from diverse industry sectors, including notable brands like Shopback, Responsible Cyber, MELD, and health tech startup Us2.ai. Following its Singapore launch, Deel expanded to Indonesia in July and entered the Malaysian market recently.

In essence, Deel’s Expansion and Hiring Research underscore the intricate landscape of global expansion faced by businesses in Singapore, Malaysia, and Indonesia. The findings illuminate the challenges of hiring, compliance, and costs, echoing the pressing need for innovative solutions in navigating these complexities. Deel’s commitment to providing comprehensive HR solutions, coupled with its recent advancements like Deel Bookkeeping and AI-powered assistance, positions it as a pivotal ally for companies aiming to overcome barriers and achieve success in their global ventures. As it continues to expand its reach across Southeast Asia, Deel stands poised to empower businesses, enabling them to harness the full potential of a global workforce while navigating the intricacies of international expansion.