How Startup Founders Can Reduce Burn Rate With a Global Mobility Strategy

A global mobility strategy can help startups reduce their burn rate and remain resilient during tough economic times. You can lower costs and allocate resources more effectively by taking advantage of emerging talent pools and more affordable regions.

However, implementing a global mobility strategy can be challenging for early-stage startups. With limited tools and resources, they must navigate complex international laws, visa processes, and foreign tax systems.

This article explores the cost benefits of implementing a successful global mobility strategy with a global people platform like Deel. We explore how you can increase your startups' global mobility to reduce a high burn rate while overcoming the obstacles many startups face.

What is a global mobility strategy?

A global mobility strategy refers to an organization’s approach to mobilizing a global workforce. Typically, the strategy involves establishing policies and procedures to support an international team with global movement. ‘Movement’ can encompass various types of business travel, from short-term international assignments to digital nomads and permanent employee relocations.

The primary benefits of a global mobility strategy include the efficient sourcing and deployment of top talent, which is essential for driving international growth. Startups that embrace this approach gain access to local expertise and perspectives, enhancing their overall effectiveness. Additionally, a well-executed strategy allows organizations to establish a foothold in new markets, enabling them to capitalize on emerging opportunities.

People-first companies prioritize the needs and desires of their workforce by leveraging global mobility initiatives. By empowering workers to travel and relocate, these organizations foster a supportive environment that enhances employee well-being, engagement, and job satisfaction. This approach strengthens team dynamics and cultivates a workplace where individuals feel valued and motivated to contribute their best.

When implemented well, a global mobility strategy can help you lower costs, optimize your existing resources, and promote business sustainability. Since lack of funds is consistently among the top reasons for startup failure, implementing a global mobility strategy sooner rather than later could be the key to your startup’s survival.

Key elements of an effective global mobility strategy include:

• Alignment with business objectives: Understanding the specific goals and challenges your startup faces in the global marketplace
• Deployment guidelines: Clearly define where you can and cannot deploy workers
• Supporting mobility types: Identifying and accommodating the various forms of mobility, such as expatriate assignments, short-term relocations, and permanent relocations
• Compliance management: Establishing robust procedures to ensure adherence to legal and regulatory requirements across different countries
• Global workforce management: Developing strategies for effectively managing and supporting a diverse, internationally distributed workforce

Explore our comprehensive Guide to Global Mobility Strategy for detailed steps on how to implement your plan effectively.

In the following section, we explore the financial benefits of a global mobility strategy for your startup.

Establishment in cost-effective areas

With a global mobility strategy, your startup is ready to operate from anywhere. By setting up in countries with lower operational costs and beneficial tax conditions, you can effectively manage expenses and sustain a lower burn rate.

While researching low-cost economies, you can consider metrics like:

• Typical operational expenses
• Tax incentives for foreign startups
• Access to banking and financial services
• Transfer pricing between jurisdictions
• Supply chain routes
• Internet connectivity
• The location of key stakeholders

However, establishing a local entity in a new location presents significant challenges, especially for startups with limited budgets and resources. Entity set-up often incurs substantial fees, and navigating the complexities of foreign legislation—particularly regarding taxes and employment law—can be daunting.

Building a local presence with a global Employer of Record (EOR) can help you avoid these pitfalls. You can hire local talent through Deel’s local entity and lean on regional legal and accounting experts to assist you with compliance, HR, and payroll.

When you’re ready to establish your own entity, Deel is here to assist you. Our team of experts navigates the complexities of entity set-up, ensuring you have a seamless journey toward permanent establishment.

See also: Visa Guide for Startup Founders and Entrepreneurs

Access to affordable labor markets

A well-executed global mobility strategy empowers you to tap into talent from countries with lower labor costs. By offering localized salaries, you can stay within your hiring budget while acquiring essential skills that enhance your team’s capabilities.

The cost of labor is a key factor in market research. Although some areas are inexpensive, average wages may not reflect salary expectations for specific roles. For example, Mexico has a relatively low cost of living, but its tech industry offers competitive pay with global rates.

Startups can use the Deel Salary Insights tool to check the median salaries for different roles in areas of interest.

Be sure to adjust pay according to currency fluctuations and changing salary expectations to retain talent. Experts from our global hiring summit say emerging markets grow twice as fast as mature ones. It’s essential to stay continuously updated with pay trends to avoid falling behind competitors and losing your best workers to them.

Planhat sourced talent from over 14 countries through Deel.

See also: How Deel Simplifies Granting Equity to EOR Employees

Lower operational costs

Global mobility strategies are most effective in remote and hybrid business environments where location dependency and in-person working are kept to a minimum. With fewer expenses like rent and utility bills, you can reduce your overhead costs and reallocate funds to critical areas of the business. By just going hybrid, you could save up to $11,000 (USD) per worker per year.

Remote startups often face the challenge of ensuring workers have suitable working conditions and equipment on a tight budget. According to a 2023 survey, 82% of people work from home, and 63% don’t have a dedicated office space. They can’t perform their jobs to the best of their ability unless you can offer them a generous remote work stipend.

Startups can support a remote working model on their limited means by using a global people platform. For example, Deel offers the following features:

• Equipment management: Deel IT allows you to send candidates a catalog of pre-approved office equipment so they can choose what they need while sticking to your budget. We then handle everything from shipping to reassignment
• Co-working space memberships: Through our partnerships with global coworking spaces such as WeWork, we can offer employees access to workspaces in over 600 locations worldwide, from South Africa to China
• Global workforce management: We’ve launched a series of workforce management tools aimed at managing and engaging dispersed teams, such as Deel Plug-Ins that help to improve employee engagement and productivity, Deel Engage, an AI-powered people suite to manage development, performance, and training programs, and Deel HR, an HRIS, which is custom-built for your entire team, so you can easily manage HR for workers compliantly in 150+ countries

It is best practice to clarify all remote work processes early so managers and workers know what’s expected of them. To get started, see our 2024 guide to hiring and managing remote workers.

Discover how Voiceflow freed up around $10,000 using Deel IT.

Higher talent attraction, retention, and productivity rates

Implementing a global mobility strategy can enhance your startup’s ability to attract, retain, and engage an international workforce since it caters to the growing preference for remote work and location flexibility. An effective strategy will enhance team members’ quality of life and ensure they have a positive employee experience which will improve worker loyalty and reduce your spending on talent attraction and retention.

Startups can achieve cost savings in various areas, including:

• Recruitment: A global mobility program can give your startup a stronger employer brand that attracts more candidates, which means you can invest less in recruitment activities. Studies show that job seekers are less inclined toward startups, so it could help you gain an edge
• Compensation: Some candidates may be willing to accept a lower salary in exchange for remote work and location flexibility
• Turnover: If your team is satisfied, they’re more likely to stay and spare you the cost of replacing them. A Gallup report estimates this can cost up to two times a worker’s annual salary
• Labor: Happy employees are more likely to be productive, which means you become more efficient and run leaner teams. Studies indicate teams can increase their output by up to 18%

See also: A Guide to Work From Anywhere Schemes: Best Practices, and Compliance

Enhanced agility and resilience

Implementing a global mobility strategy empowers your organization to explore new markets, expand your customer base, and diversify revenue streams. This proactive approach ensures that if revenue declines in one locale, you can rely on other markets to sustain your business.

Additionally, a well-crafted global mobility strategy allows you to quickly capitalize on emerging market opportunities, gain valuable insights into local conditions, and maintain operational coverage across multiple time zones.

Research from Great Place to Work indicates that diverse workforces consistently rank among the highest-performing teams, reinforcing the importance of inclusivity in driving business success.

Looking for an efficient solution to manage relocations and cross-border assignments? Discover Deel’s Global Talent Mobility Policy Template for a streamlined approach.

Build your global mobility strategy with Deel

Implementing your global mobility strategy is a breeze with a global people platform like Deel. You’ll have all the support needed to excel in cross-border talent management, build a thriving multinational startup, and reduce overheads.

Deel’s all-in-one platform provides:

• Visa and immigration support from experienced mobility teams
• Employer of Record hiring for employees
• Contractor of Record hiring for independent contractors
• Global Payroll
• Compliance management
• Global HR and workforce management

Want to learn more about how Deel can support your startup’s long-term success? Check out our Deel for Startups Partner Program, or request a demo.