Business Growth Starts with People: The HR Factor in Global Expansion

Ada Tai, Nina Chen
Jun 24
3 min read

Updated: Jul 1

As global expansion becomes a strategic priority for many foreign enterprises, Canada stands out as an attractive market: politically stable, economically advanced, and welcoming to foreign investment. While many companies enter the market with essential elements in place, such as secured funding, localized products, and established legal entities, Human Resources remains the most frequently underestimated factor in successful expansion.

At BadaB Consulting Inc., we work closely with companies wanting to establish their operations in Canada. Over the years, we’ve seen a clear pattern: even strong, well-funded businesses struggle when HR challenges emerge. These aren’t just growing pains—they can derail an otherwise promising expansion.

4 Most Common HR Pitfalls That Can Undermine Your Global Expansions

Disregarding the Local Employment Laws

Canadian employment laws vary by province and territory, governing aspects such as employment contracts, working hours, minimum wages, benefits, and termination procedures. Failing to comply can result in substantial fines, legal disputes, reputational damage, and even the forced cessation of operations.

For example, while questions about family status or age might be common in their home country interviews, these are direct violations of Canadian human rights legislation.

Underestimating Cultural Differences and Communication Barriers

People truly are the backbone of any business, and this is amplified during global expansion. Each team member is shaped by their unique culture, influencing everything from work habits, communication styles, expectations of leadership, views on hierarchy, work-life balance, and to how they approach conflict.

We've seen firsthand how imposing a home-country corporate culture without adapting can lead to low morale, high turnover, decreased productivity, and fractured internal relationships. Success hinges on understanding and respecting these local nuances.

For example, a common pitfall occurs when leaders sent to overseas establishments aren't fully prepared. They typically lack the necessary grasp of the local business culture, language proficiency, or understanding of local HR practices. This gap can significantly hinder integration and operational effectiveness.

Failing to Attract and Retain Local Employees

Entering a new market brings significant challenges in talent acquisition. It requires a deep understanding of the local talent pool, skill offerings, effective recruitment channels, and what motivates candidates in that specific region. But hiring is just the beginning: retaining top talent also demands alignment with local career expectations and meaningful development opportunities.

For example, a client of ours expanded to Canada five years ago. For the first three years, they hired exclusively through referrals within their own cultural community. In their fourth year, they brought on a local professional from outside that group to manage part of the operations. However, the workplace culture remained centered around their native language and customs. As a result, this new hire felt excluded and eventually resigned within a few months.

Lack of Local HR Support and Designated Systems

Expanding into new markets without dedicated local HR support or proper systems in place can lead to serious inefficiencies and legal risks. Functions like payroll, benefits administration, performance management, and compliance tracking become challenging to manage when HR is handled remotely or delegated to non-HR staff (e.g., Administrative staff, Controller). While this may seem like a cost-saving approach initially, it often backfires, especially when employee disputes or compliance issues arise. In such cases, “we didn’t know” is not a defense, particularly when facing local labour boards or human rights tribunals.

On the other hand, as operations grow across borders, the complexity of managing HR data increases exponentially. Integrated systems that account for the different laws, currencies, and reporting requirements of various countries are critical. Data privacy laws also vary widely, requiring careful management of sensitive employee information.

Don’t Let HR Be the Barrier to Your Success in Canada

Being new to the Canadian market doesn’t exempt your business from meeting local labour laws and standards. That’s why proactive HR planning is critical, not just for compliance, but also for protecting your business and building a strong, credible brand. A thoughtful approach to hiring, clear workplace policies, and competitive compensation packages signal that your company is committed to doing things the right way.

Expanding into Canada, or facing HR challenges? LET'S CONNECT! We’ll help you build the systems, culture, and team your business needs to grow, legally, sustainably, and confidently.