Client Q&A: How To Manage The Global Expansion Of Your Workforce
Recently, we had the opportunity to interview Audra Bright, Senior Manager of HR and Internal Systems at Textile Exchange, about the successful global expansion of their workforce outside of the U.S. Read our Q&A to learn about the expansion strategy, challenges faced and how the business overcame them.
Q1) What country did you first expand into and when was that?
A) Audra: I’ve been with Textile Exchange for about four years, and my very first task coming onboard was how to employ international people on our team. We had been remote for over 20 years, and that was very important to retain. The first country we went into was Sweden. We started with one employee and then it snowballed from there.
Q2: Since then, have you expanded your workforce into other countries?
A) Audra: Over the past three and a half years, we’ve expanded into the Netherlands, Germany, the UK, Italy, Spain, France, Canada, and quite a few other countries.
Sweden was easy compared to other countries. It went very smoothly. We estimated eight weeks, and we did it in four, but it gave us some unrealistic expectations for other locations.
Q3: What was the first thing you did when you found out about your organization’s plan to extend operations globally?
A) Audra: My very first thing was a slight panic attack, but once I got through that, I got to planning. The biggest thing was giving myself a timeline and knowing that there were going to be contingencies. For example, when we expanded into Italy, our original timeline was three months, but it took us six months.
Q4: What was the greatest (HR) challenge with your global expansion?
A) Audra: A big challenge has to do with tax and local labor laws. You must know how you need to set everything up. Is it just taxes? Do I need a full entity? There are so many different options to being able to expand with different providers and knowing what your budget is. You have to keep informed about the local taxes and labor laws. They change every single year, so having a partner who knows the laws and having that open communication with them, is crucial. The last thing any HR or any organization wants to deal with is an international incident.
Q5: How did you overcome that challenge?
A) Audra: Resilience is the key. It is going to be hard. The paperwork is going to be tough because it might be in a different language. You might need to get power of attorney if you’re doing wages and taxes. Governments work at their own speed, which is part of the challenge as well.
Being resilient and being flexible is essential. Once you get to the finish line, take a minute to take a breath and celebrate the win.
Q6: What advice would you give to another HR professional that is embarking on a global workforce project?
A) Audra: Make sure you have everybody who needs to be involved, involved from the start. Know your timeline and give yourself the time you need for your expansion.
We are a non-profit, so budget is also always important. We must consider the statutory requirements where certain benefits or pensions are required, so the entire compensation package is under consideration as well as any processing fees.
Make sure you know your timeline going forward. When do you need to submit payroll by? When do you need to make changes? For contracts, what’s necessary? For onboarding, what is legally mandated, and when are the timelines for that? For example, in Italy, you must onboard your employee so they can be registered with Social Security 10 days before they are hired.
Q7: What strategies do you suggest onboarding colleagues in remote locations to help them feel included and integrated?
A) Audra: During onboarding, we really make sure that we are in contact and let them know they are seen and heard. We always tell our employees, especially global employees, if they ever want to meet with someone in the organization or get to know them personally, they can always set up a “coffee chat” with them, which is a quick 15-minute session that anyone can use to facilitate communication.
We do an all-team meeting in person, and we pick a central location at least once a year. We are constantly updating our engagement strategies to make sure that even though we’re remote, we’re still a community.
(Additional response from Daniel Grace, Global HR expert at IRIS): That’s a great question, but it’s a difficult one because the culture in each country can be so different from your own country. Where you can, I recommend an in-person onboarding session so they can understand your company and understand what is happening within your organization.
Use video cameras. The employees who do not show their face when they’re first meeting the team, can really dampen the culture and team spirit. I also recommend sending out a goodie bag with things like a company t-shirt or rucksack to help people feel like they’re really part of the organization.
I’ve even seen one company choose to print out their employee handbook. It’s not something you do these days because everything tends to be digital, but it was a beautiful book that made employees feel like they were part of their brand.
Q8: How do you handle compensation in countries that have fluctuating exchange rates?
A) Audra: We base it on USD because we are a U.S.-based company. Every year we look at the average exchange rates, and that’s what we use. But we also benchmark our team every year to make sure we’re meeting medium to higher compensation for each employee, just to ensure that we are being equitable and fair.
Daniel: That is a very complex question, but what we’ve seen in areas that have highly volatile currency, is that you baseline the payments to a standard currency like the U.S. dollar. That way, you will give them their salary in the U.S. dollar, and then they will always earn that relative value in their currency no matter the swing in the market value of their currency.
Q9: Do you mirror U.S. benefits and pay uniformly for international employees?
A) Audra: Setting up benefits is its own game. It goes back to the statutory requirements. How we base benefits is by taking what we offer in the U.S. and making sure it matches an equivalent for our international employees. We don’t look at the dollar amount because, for instance, health insurance can be crazy costly in the U.S. compared to Canada or Sweden. You must remember that some things, like pensions, are not normalized or even available in every region.
You also must consider the cost to your organization. For example, in the UK, if you offer health benefits, there is also a tax consideration that must be considered.
Q10: Are the same considerations used to determine employee or consultant or independent contractor classifications?
A) Daniel: No. They’re vastly different. You must be very careful because often, if you have an independent contractor working for you and only you, most governments will interpret that as an employee/employer relationship. This will result in fines and penalties, and they may force you to have an employment contract.
When using contractors and consultants, they really need to be consultants. Consultants should work for multiple agencies. They won’t work under your direction full-time. If they work for you full-time for months or even years, it can become very troublesome for you and your company, and you should seek assistance as soon as possible.
Q11: Do you have any recommendations or strategies for implementing DEIB and better supporting global teams through DEIB initiatives?
A) Audra: You should absolutely hire a consultant to get help with a DEIB strategy because they will be invaluable. They will help make sure that everything you are doing with DEIB across your network is universal.
Daniel: You’re talking about Diversity, Equity, Inclusion, and Belonging, right? It’s a challenging topic because different cultures have different views on how that looks. In most countries, it is regulated. Things like gender pay gaps and discrimination have employment laws to help protect your employees. Different countries have regulations to ensure you are treating your staff fairly.
There are some great software platforms that can help your organization ensure you are being diverse and that you are using equality within your operations. You should look and explore those options, especially if you are a growing organization. This will help you hire the right people for your company while still being fair to all people.
It’s quite a challenging topic. Most countries do things so vastly different, that it’s hard to have a standard or at least a baseline. Most importantly, you need to make sure you’re treating your staff the right way, and that reflects in your culture and values.
Q12: Do you have any specific strategies we can employ to establish and sustain engagement and alignment within a globally remote team?
A) Audra: If you have an in-person branch or remote workers, it is important to engage them within that culture audit. It helps the organization know where we are right now. Surveys help us see where priorities are and which things can wait for later to be addressed.
Q13: What is the biggest piece of advice you would give anyone starting?
A) Audra: Mine’s pretty simple. Hire consultants. Hire someone, like IRIS, who is an expert that can really support you, especially if you are a small organization or a small HR and operations team. A consultant will be invaluable, and you will learn so much for the next round or the next country. Consultants are there to help you.
Click here to watch the webinar “How to Navigate Global Workforce Expansion with Confidence” with Audra Bright and Daniel Grace.