Deel, the all-in-one HR platform for global teams, launched its Expansion and Hiring Research to understand the latest trends and challenges businesses in Singapore, Malaysia, and Indonesia face when expanding into overseas markets.
The research, conducted in collaboration with Rakuten Insight, interviewed 900 business decision-makers across Singapore, Malaysia, and Indonesia, with 300 business decision-makers from each market.
It examined their appetite for expanding beyond their domestic markets and their hiring strategies for expansion.
The research found that out of the 300 Singaporean companies interviewed, a substantial 87% of Singapore businesses interviewed are currently operating beyond Singapore, yet 65% of these companies have opted not to hire local talents in external markets where they operate, more so than their Malaysian (61%) and Indonesian (52%) counterparts.
Singapore companies expanding overseas face hiring challenges:
- 85% of these Singapore companies cited reasons surrounding difficulties and high cost of setting up a hiring entity, and challenges in identifying the right talents in the markets where they operate.
- This contradicts financial business sense as the cost of hiring within Singapore is naturally higher than most overseas markets, especially within Asia.
- 50% of 274 businesses looking to venture into new markets outside Singapore ranked “Local Compliance” and “Initial Setup Cost” as the top two challenges for expansion.
- 51% of these companies resort to hiring via third-party entities to mitigate costly expansion setups, with an additional 32% ready to explore this approach.
Locally, Singapore businesses continue to face challenges in pursuing top specialist talents and have resorted to hiring talents overseas via global HR platforms such as Deel.
Responsible Cyber, a Singapore-based start-up cybersecurity company, needed specialist software development and AI expertise to continue delivering cutting-edge products and high-value consulting.
Despite being headquartered in Singapore—an epicentre for technology in Asia—recruiting top-tier talent presented a challenge, especially for niche roles that Responsible Cyber sought to fill.
The company turned to Deel to navigate the complexities of dealing with local labour laws and tax regulations in multiple countries where they hire and onboard new hires globally.
Karen Ng, Regional Head of Expansion & Market Lead Hong Kong, Singapore, ASEAN, India, said, “The research highlights the challenges Singapore, Malaysia and Indonesia businesses experience as they navigate the complexities of global expansion and the importance of having the right access, information and tools in the face of talent acquisition and compliance challenges.”
“Deel can solve these issues with our comprehensive solutions, including global hiring, onboarding, managing and paying a global workforce. This year, we’ve also introduced new services such as Deel Bookkeeping, Employer-of-Record, US Professional Employer Organisation (PEO) and Deel IQ, a global work assistant powered by AI. All these aim at providing our clients with the right tools and competitive advantage in their HR and business decision making,” she added.
Other key points from the study made the following discoveries:
Global Expansion and Hiring Research results
- 91% of business leaders across Singapore, Malaysia and Indonesia had formulated plans to expand into new markets within the next five years.
Businesses in all three markets are investing heavily to expand overseas
- On average, Singaporean businesses interviewed are currently investing approximately SG$ 3.0m (US$ 2.2m) for their global expansion efforts. The consumer manufacturing sector leads with an average investment of SG$ 6.9 m (US$ 5.1m).
- Singapore-based businesses are most engaged with Malaysia, and Southeast Asia (SEA) as their expansion targets.
- Expansion spending patterns in Malaysia correlate with company size. Medium-sized companies with a staff strength of between 21 and 100 people spend an average of SG$ 1.5m (US$ 1.1m). On the other hand, 22% of businesses from larger companies plan to pursue a more aggressive expansion strategy, with budgets ranging from SG$ 2.2m (US$ 1.6m) to the top 10% averaging SG$ 10.2m (US$ 7.5m).
- Indonesia, particularly in business & professional services and consumer goods manufacturing, exhibits a more aggressive appetite for global expansion. On average, Indonesian businesses interviewed are investing approximately SG$ 1.9m (US$ 1.4m) for their international expansion efforts, with the consumer manufacturing, professional services, and trade sectors registering higher investment budgets, averaging around SG$ 2.7m (US$ 2m).
Expansion Challenges
- Cost barriers have been identified as significant challenges for companies seeking expansion, with 62% in Malaysia and 68% in Indonesia citing them as their primary concerns.
- Cost and local compliance barriers are consistent challenges all three interviewed markets face.
Global Workforce Impact
- Across the interviewed markets, 92% of decision-makers believe that hiring a global workforce enhances the skills and capabilities of local talent.
- In overseas markets where businesses operate, an average of 59% do not hire local talent due to the difficulty of finding the right talent in those markets.
