The idea that globalization is dead? ‘It’s a little absurd,’ says Globalization Partners CEO

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Transcript

Alan Murray:Leadership Next is powered by the folks at Deloitte who, like me, are exploring the changing rules of business leadership and how CEOs are navigating this change.

Welcome to Leadership Next, the podcast about the changing rules of business leadership. I’m Alan Murray.

Michal Lev-Ram: And I’m Michal Lev-Ram.

Murray: Globalization is dead. We hear it all the time.

Lev-Ram: But it’s not.

Murray: We read it all the time in the papers. But it’s not. And our guest this week is someone who’s taking advantage of the fact that it’s very much alive and well.

Lev-Ram: Yeah. Nicole Sahin is the CEO of Globalization Partners and, you know, she’s keeping globalization in the company’s name, so I guess something must be working.

Murray: Yeah, it’s a really valuable business, particularly for smaller companies like Fortune, where you have single people in different countries all around the world. It gets very complicated for regulatory reasons to place them. And so this turned out to be a fascinating conversation, particularly when we found out at the end of the podcast that she had conceived the idea on a mountaintop in Guatemala.

Lev-Ram: The highlands of Guatemala is where this came to her, this epiphany. Sort of. Yeah. Fascinating story. She started this quite a few years back and came back recently to lead the company after leaving the role of CEO. And it sounds like, from talking to her, there’s a lot of demand, actually, growing demand in many regions across the world. Maybe the headlines of globalization, as you said, Alan, being dead or dying are not accurate. She’s seeing tons of demand. And some of the regions, she noted, are really interesting, like Colombia. I mean, I think we all know India, but other locations as well.

Murray: Yeah, it’s a fascinating conversation. Let’s dive right in.

Nicole, thanks for being with us. Let’s start with the basics. What is Globalization Partners and why did you start it?

Nicole Sahin: Oh, thank you for asking, Alan. After years of helping Silicon Valley’s high-growth companies expand internationally, I thought there had to be a much easier way to help companies hire talent in new markets without setting up branches and subsidiaries in each country. So basically the vision was that it was based on up to that point, every company, whenever they wanted to hire even one person in Brazil or Saudi Arabia or China, would have to set up a legal infrastructure in that country. And instead of every company setting up a company in the U.K., a company in China, a company in Brazil, my vision was to just set up one company in each country and give all of our customers access to it so that that they could quickly and easily be able to hire talent in each country while being compliant with the local labor, HR, and tax laws. And then also building technology on top to make it automated.

Murray: Nicole, I so wish I had met you five years ago when Fortune spun out from Time Inc. and we created an independent company. We’re a small company. We only have about 300 people, a lot of them in New York, but many of them are scattered around the world. We have people in London, people in Zurich, people in Berlin, in Singapore, and it was a pain in this globalized world, it amazed me how hard it was to hire people in those disparate locations.

Sahin: Exactly. And as you can imagine, since the pandemic, and with really everyone going everywhere in the era of remote work, you know, our industry is just shot through the roof and we just happened to be in the right place at the right time to be able to support companies with exactly that problem.

Murray: We’re mostly talking about small companies here, right? If you’re a big company and you have offices all over the world, this is not a problem.

Sahin: Actually, it’s all size companies, because even big companies, unless it’s like PepsiCo, which I would assume is in every single country in the world, almost all companies, they want to hire people here, people there who they don’t necessarily want to register from a tax or legal basis in that country. Even fairly large enterprise-sized companies, they might have one or two employees who want to go home to Sri Lanka and work there. They might find a great, really talented employee that they can hire in Mongolia. You know, that’s not the norm for us. I would say the norm is really consolidated in the top 60 markets or so. But we hire everyone everywhere on behalf of our customers. And the idea that they can hire someone quickly and easily without dealing with any of the HR, tax, or legal issues in any country, it’s a total game changer.

Lev-Ram: So how are you able to do it? How do you cut through the red tape?

Sahin: So the traditional ways companies would do it is that they would have to set up their own entity in each country, which would take three to 12 months in each country. Instead of customers doing that, we have companies on the ground in each country which are licensed to hire people on their behalf. The employee feels like he or she is working for the customer, but at the end of the day, their local employment contract is with us. In most countries, the customer has chosen the compensation, the benefits, the salary, but we’ve just made it really easy. So when they go on to our software and they build an employment contract for that employee, they’re presented with what benefits are locally required and whatever they want to offer. But basically when the contract goes out, the locally compliant employment contract that goes out from our company on the ground in-country and the customer pays us and we pay the employee. If you can imagine like an umbrella over the globe that drops down into each country and each customer gets to plug into this legal platform with software on top to skip over having to deal with legal, tax, or HR Issues. That’s essentially what Globalization Partners is.

Lev-Ram: Are they developers mostly? Designers? Sales? Like is it, across the board, what kind of employees are they?

Sahin: I mean, it’s all kinds of employees. Customers often want to hire sales talent all over the globe without necessarily setting up actual operations all over the globe. We also have a lot of engineering talent coming on board. And I’d say over the years, it’s like the mix has changed. It used to be lots of sales talent and now I think because engineering talent or AI talent is so hard to find, if customers can find great talent, they need to be able to hire those people anywhere they can find them in order to be competitive and build their business.

Murray: I saw you made the Deloitte Fast 500 list. Congratulations on that. You’re growing very rapidly at a time when the conventional wisdom says that globalization is over, we’re retreating, everybody’s onshoring and friendshoring and de-risking China. So how is it that you’re doing so well at a time when, in theory, globalization is in retreat?

Sahin: Yeah, I mean, I read the news sometimes about globalization being in retreat, and I think it’s a little absurd, actually. I think that there is a movement or like the idea of, “Hey, you know, I want to buy from my local grocer. I want to grow my food in my backyard.” And I think that’s wonderful, and people should do it. Or, “I want to buy American.” But the reality is that our entire economic ecosystem is so interwoven so closely together that any business of any scale ultimately has people and talent from all over the world. And you just can’t build an enterprise-level business or even any, any high-growth company has talent from all over the world. So I just don’t I don’t believe that globalization is in reverse.

Murray: Globalization is alive and well. It’s just different than it was.

Sahin: Very different and accelerating.

Murray: Can you talk specifically about China? Because a lot of the deglobalization is focused on really on de-risking China. Supply chains became so dependent on the Chinese and the geopolitical questions around China and the Taiwan Strait, etc., have caused a lot of people to say, “Hmm, I think I better back off a little bit.” How does that affect you?

Sahin: We’ve been doing this for over 12 years now, and it’s so interesting to watch the movements of times and the trends of people and where companies are hiring where. And I just think that companies always need to de-risk in a global environment. So it’s not just China. They also need to be really careful of where they’re hiring and consolidating their resources in any place. So smart businesses often try to, especially when they get of any size or scale, they’re really spreading out where their talent is a little bit so that their risk isn’t so consolidated in any geo area.

Murray: And that’s good for you.

Sahin: Yeah, it’s great for us. It’s great for us, and we’re happy to support our customers in that way and add to their security.

Lev-Ram: I’m curious to hear a little bit about both your path to founding the company because it wasn’t a traditional path. Tell us a little bit just about your sort of leadership trajectory and how you’ve made these decisions.

Sahin: Sure. When I was right out of college, I thought I wanted to be an anthropologist and I went and lived in the highlands of northern Guatemala and lived with an indigenous family.

Lev-Ram: I’m glad we’re getting to this now.

Murray: Yeah, yeah. Was that the first Globalization Partners office in the highlands of Guatemala?

Sahin: I think it was probably where it was seeded, Alan. That’s for sure. Anyway, I was hanging out in this village in the northern highlands of Guatemala, and I was trying to learn this this ancient language, it’s Mam, it’s a Mayan language. And trying to follow in the footsteps of an anthropologist from the 1950s, Maud Oakes. And after a certain period of time, I realized that being a 20-something year old young blonde woman trying to study shamanic traditions in the northern highlands of Guatemala and learn an ancient language nobody had ever heard of probably was better for National Geographic than real life. And not as fun as I thought it was going to be.

Also, something I learned about myself is that I’m an applied anthropologist. I love meeting people from all over the world. I love the cross-cultural nuances of international business. And I’m a doer, not necessarily an academic, and a thinker and a creator and a builder more than an academic. So yeah, I left Guatemala, and I ended up applying for business school shortly after that and got an MBA in international management.

Shortly after that was advising the high-growth companies in the early 2000s like NetSuite and Tesla and Infinera and was ultimately like an outsource international compliance advisor, helping them set up their companies and manage their headcount all over the globe. And in doing that, I was managing lawyers and tax advisors and accountants in like 60 different countries and kind of doing the same thing over and over again. And I just thought if I could build this once in a way that every company could have access to it, I would have a much more scalable business platform.

And combined with that, in doing all of that, I really always believed and felt that like there’s incredibly talented people all over the globe, but it goes back to the early 2000s, the idea of like cheap talent in different countries. A lot of those people could not find, you didn’t have access to opportunity, like my friends in the Silicon Valley or London or Boston would. And so ultimately, now, 20 years later, we’re really at the forefront of an era where anyone, anywhere does have access to opportunity with the right education and a good Wi-Fi signal. So I think this is the future. I’m excited about it and really excited to be part of it.

Lev-Ram: Awesome story. I’m glad we asked. What are the kind of up and coming hubs though, that you’re seeing? I mean, where are which regions are our customers most interested in now as they’re de-risking a bit?

Sahin: So I would say India is really interesting and compelling. I mean, that country has been just such a marvel to watch. I first traveled there over 20 years ago and was really just touched by India as a country. But I also, from a business perspective, in the early 2000, companies were always outsourcing there and it was considered like cheap talent. Now what we’re seeing, and especially in the last five years, the digital economy and like the modernization of the economy that they’ve built from the ground up in-country is really incredible. And also the career opportunity for what I’ve always seen is like a really scrappy, highly motivated, highly educated people who want to work really hard but were seen as cheap talent and not given the same opportunity. Now we’re seeing engineers in India being paid the same as engineers in Ireland, for example. And it’s just it’s awesome to see like a whole nation come online in the course of a couple of decades. We’re seeing more Colombia now than we used to, you know, major difference compared to five years ago. Indonesia, you know, became on the top ten list at some point, too. Those are all surprises for us. But just incredible to witness.

[Music starts.]

Jason Girzadas: Thank you, Alan. It’s great to be here.

Murray: Jason, we live in an era of disruption, technology disruption, geopolitical disruption, workplace disruption, and it makes accurate predictions about what’s going to happen in the future more difficult than it has ever been. Yet the polls that we do together with you show that most business leaders largely remain optimistic. Why do you think that is?

Girzadas: I think optimism is a result of fact that we’ve been through an incredibly tumultuous three years. And so, I think business leaders realize that they’ve built resiliency into their organizations. The prospect of even more disruption isn’t as foreign of a concept, and I think there’s more confidence in their ability to adapt and to be agile. Secondarily, there’s been tremendous investment in technology and new capabilities that client organizations and executives broadly are optimistic about those creating more value and more opportunity. So it’s a function of what we’ve been through, as well as the investments that have been made that give a sense of optimism despite some of the headwinds.

Girzadas: Well, disruption is the new normal. I don’t think there’s any placid water on the horizon or calmness that we can predict. So it’s a function of getting accustomed to the discontinuities that are ahead of us, whether it’s around technology or geopolitical change or workplace changes associated with the future of work or the demands of the talent workforce. Change is the new normal. As a result, it is requiring executive teams to actually look holistically at those challenges, be facile with doing scenario planning and being on the lookout for where and how to capitalize on disruption versus being concerned by it or seen as a barrier to their success.

Murray: Jason, thanks for your perspective and thanks for sponsoring Leadership Next.

Girzadas: Thank you.

[Music ends.]

Lev-Ram: So I want to pivot a little bit to culture, because I think it’s a really interesting one to address with you. I’m assuming that kind of by nature, the employees you’re working with across the globe are remote, obviously. But just wondering, like, what are you seeing as the trends?

Sahin: So I think this is an issue that we’re all struggling with a little bit. In an ideal world, we would all go back to going to the office where we can meet together and collaborate. But when you say ideal world, ideal for whom? Ideal for the employees? No, nobody wants to go to the office. And then ideal for the company? Well, in a romantic version of life, sure. But actually, that’s not the way our talent pools are spread out now. Because if I think of a company headquartered in the Silicon Valley, very few people are based in the Silicon Valley that you could hire enough talent to cover the aptitude of a global market from any geo location. You could try to hire people in hubs and have them go into offices, but it’s so unpopular with teams that what we find is that companies lose their talent when they try to make everybody go to the office.

Now, just the culture changed so quickly after the pandemic. I know a lot of companies are trying to go back to the office, but I haven’t heard of many that are having great cultural success with it. That said, what’s right for every company is different.

Sahin: So I think that the reason companies are using our platform is because they have employees who need to be able to work in whatever their home jurisdiction is without coming into the office. So inherently, our industry has grown exponentially by the flood of talent that is now able to be captured because the world has become the talent pool instead of just, you know, a 50-mile radius of an office location.

Sahin: That’s a great question. The employees of our customers tend to almost always identify, in fact, always they identify as part of the corporate culture of the end customer. They put that on their LinkedIn profile. They would say, “Hey, I work with such and such a company.” We’re really just an administrative and back-office component of those employees work in the vast majority of locations and companies. And I do think culture is incredibly important when building a remote-first organization. It’s also incredibly challenging. I mean, that is the one thing. There is something missing when you don’t see your colleagues in person. So we do encourage people to travel and meet their colleagues all over the globe as much as, not as much as possible, but within a reasonable amount and have some in-person meetings. I think that is a nice combination.

Sahin: I think the number one most effective way to make employees feel welcome is human connection and investing the time with that individual to have a clear, concise, kind of like a welcome meeting, making sure that they have video-on kind of coffee meetings with people throughout the organization so that they can just get to know some names and faces within the organization. And really investing in what their experiences in onboarding and getting to know the organization and getting to know their work, understanding training. Because what we’ve seen or what we used to see many times was companies would hire, you know, let’s call it one guy in Singapore, 12 hours away from the U.S. where the rest of the company was headquartered, and then spend no time whatsoever onboarding that person, helping them understand the job. That’s really hard. It’s a huge leap of faith when somebody takes a job in another country where there’s no other people to rely on and no community or connection. I think the more people invest in great onboarding, the better off and more successful any company can be.

Murray: So Nicole, Michal and I have just set a kind of 2023, 2024 personal record here. We’ve got 20 minutes in this conversation, and neither of us have used the letters AI, but we’re going to do it now because I know it’s part of your business. I know it’s important to you. Can you talk about how AI is accelerating what you’re doing?

Sahin: Yeah, absolutely. It’s incredible, actually. Every time I meet with our AI team, I mean, just to witness what they’re able to accomplish in a short period of time is remarkable. So the vast majority of our business can be fully automated. I think about 95% of our business can be automated. And that’s because onboarding an employee in a country, it’s like the same questions every time. How many vacation days does this person need? What’s the benefits requirements? So a lot of that can just be managed through AI. There are human issues that come up, you know. So let’s say an employee gets hurt, has to, you know, something happens on the job, of course, that always requires human intervention. So we use AI within our product platform with the first you know, we call it GIA, and it’s the first of its kind global intelligence assistant, which basically, it’s software, obviously, but it makes it fast and easier for companies to hire, manage and manage all of their global legal, HR, and tax compliance globally in combination with our platform.

Murray: That sounds like a huge productivity advantage.

Sahin: I agree.

Murray: I’m so glad to hear that globalization is alive and well and living on in a more perfect form thanks to the great work you’re doing. Nicole, thank you so much for that conversation. And I’m going to introduce you to Fortune‘s chief people officer as soon as this podcast.

Lev-Ram: Thank you, Nicole.

Murray: Leadership Next is edited by Nicole Vergara.

Murray: Our theme is by Jason Snell.

Lev-Ram: Leadership Next is a production of Fortune Media.

Murray: Leadership Next episodes are produced by Fortune’s editorial team. The views and opinions expressed by podcast speakers and guests are solely their own and do not reflect the opinions of Deloitte or its personnel. Nor does Deloitte advocate or endorse any individuals or entities featured on the episodes.