What is Global HR? An Employer’s Guide
What is Global HR?
Global HR, or Human Resources, is the process companies follow to manage employees around the globe. In order to achieve success with global HR, organizations must manage geographic, linguistic and cultural differences. This is the best practice to fully maximize and optimize productivity amongst staff and overall engagement levels within a company.
Global HR is responsible for:
- Creating competitive opportunities within a company
- Recruiting adequate talent that is skilled, qualified and experienced
- Producing a standardized HR strategy that can be easily integrated across a company globally
- Ensuring regulatory compliance and local laws are followed
- Analysis between markets that investigates retention rates
Why is Global HR Important?
Without a global HR strategy in place, your organization is unlikely to succeed in overseas markets. Every international company needs global HR to ensure cohesion.
As well as reviewing policies and procedures, global HR teams can standardize these so they can be correctly interpreted by teams across the world. This is vital in building brand reputation and ensuring the company’s vision is supported worldwide.
It’s also essential for businesses that want to maintain their competitive edge. Consistent communication and messaging are vital for customers to view a business as strong. One way this is achieved is through a business ethos that is integrated inside and outside the company. Successful HR strategies are imperative to this process.
Investing in talent, offering greater opportunities for well-being and ensuring watertight policies are in place are all things that hugely benefit a company. This is simply because they all have an impact on the level and types of services their customers receive. Done right, they can also make a business an aspirational place to work and even improve staff engagement.
What are the Challenges of Global HR?
Global HR faces significant challenges, especially when compared with local HR requirements. From a vast knowledge of culture to complex laws and regulations, global HR teams always need to be at the top of their game.
1. Cultural Barriers
Entering into new geographic territories without an in-depth understanding of the local culture often penalizes organizations. From lack of communication to unclear expectations, cultural barriers can easily create friction among teams, leading to unproductive working environments. For global HR teams, breaking down these barriers is a vital stage in ensuring policies, procedures and company messaging are clear to everyone, worldwide.
For a business to scale, the central HR team must scale too, and expanding the existing HR team has its own challenges. Tight recruitment turnaround times, ensuring quality talent is hired, alongside onboarding and training requirements, might find teams worse off than when they started. It could even lengthen the process of having a fully functioning global HR team.
3. Complex Legislation and Requirements
Possibly the trickiest task for any HR team: understanding complex legislation and working requirements of other countries. Whether you’re hiring in the UK and need to adhere to the 48-hour working week, or overtime pay laws in Japan, your teams will need to factor these into the organization’s policies and ensure the right payroll processes are set up to capture this. Certain countries and regions also require companies to pay insurance and different tax rates that also need to be accounted for.
Studies have shown that efforts to improve and maintain employee well-being positively impact things like retention and brand reputation. Employees that feel happy are likely to be 12% more productive. For companies investing in global expansion, this is a significant win. Companies that get this formula right may spend less on recruitment and also rehire, meaning talented staff are eager to stay with a company for much longer. Selecting the right well-being and wellness strategy, especially one that translates overseas, can be a challenge.
Finding the right talent is just part of the process. The real challenges lie in the visibility of vacancies, the language used to describe opportunities and the potential to enhance a team with a new role. HR managers also have to contend with the ebb and flow of the labor market, as well as low unemployment figures. On top of this, complying with equality laws, including equal opportunity acts that vary from country to country, proves to be a very taxing task for HR teams.
6. Employee Engagement
Endorsing positive attitudes and cultures across global sites is a lengthy process and only one that can be refined with time and patience. The benefits of employee engagement all lead to improved business outcomes. It takes a significant amount of time to cultivate a positive working environment; that’s why it’s a challenge for HR teams looking to expand quickly.
7. Competitive Job Roles
Making an organization attractive to new talent is tough, but one way it can be achieved is through competitive job roles. Competitive roles don’t need to be country-specific, they can be offered worldwide. Hiring talent from across the globe ensures companies can reach a more diverse pool of individuals that could significantly benefit their business. It is the responsibility of global HR to put a business case forward for these roles.
Did You Know?
If an organization successfully addresses its challenges and concerns, around 75% of its employees stay on for longer. For global HR teams, this means less focus on the recruitment process and more drive towards topics such as development and training.
Success in Global HR: What Does it Look Like?
The possibilities are endless when you perfect Global HR. In fact, the results are incalculable. There are companies across the world that are notorious for their HR strategies, driving results for retention, customer service and brand reputation.
✓ Diverse Culture
A culturally diverse working environment empowers employees to develop talent and skills, while confidently sharing their own ideas. Expanding into new territories means even greater access to more diverse cultures.
✓ Effective Use of Data
Leveraging data enables HR teams to accurately allocate budget, review additional resources required and improve workforce management.
✓ Integrated HR Strategy
Cohesion between a company and its HR strategy ensures compliance while driving profitability, minimizing extra costs and streamlining recruitment across the globe.
✓ Utilize Technology and Software
Moving away from manual processes is essential, especially when streamlining recruitment, onboarding and employee engagement programs. For companies with global expansion in mind, this will relieve some of the administrative burden.
✓ Employing the Right Leaders
Inadequate leaders are more likely to lower retention rates and employee well-being. Investing in the right talent supports company-wide efforts, such as culture building and clear communication between worksites.
✓ Unbiased Attitude
Approaching every situation in a neutral state of mind is vital. It enables teams to hear all sides and make constructive decisions that better the company. This is especially important when dealing with cultural barriers, meaning global HR teams can understand the full situation.
✓ Effective Talent Acquisition
Around 9 out of 10 employers struggle to fill jobs. Without a level of aspiration to work for a business, these figures remain low. Effective talent acquisition targets the right individuals, filling jobs faster. Opening up potential job roles across the globe could attract an even greater pool of talent.
✓ Cross-Cultural Competence
Mastering the cultural requirements of all overseas sites, as well as your home site, is vital. Cross-cultural competence ensures effective communication of company messaging across the globe, leading to better interactions between employees and customers.
✓ Opportunity for Career Development
Progression and development have never been more crucial. In one study, around 87% of millennials claim it’s vital to them. With proper planning in place and open dialogue, companies are more likely to retain employees if there’s transparency around progression.
Global Human Resource Management
Global HR management is incredibly different to local HR management as it requires a diverse set of skills and knowledge to achieve. For instance, local HR only needs to consider country-specific legislation and challenges as part of its overarching strategy. Those working in global HR will need to manage this alongside expectations and regulations from each country the business operates in, ensuring a cohesive strategy and message that travels worldwide.
What are the Functions of Global HR Management?
Global HR management oversees important functions within a company or organization. These include:
- Addressing communication barriers due to cultural or language differences.
- Implementing an HR strategy that translates across the world and throughout the business.
- Exploring and understanding cultural barriers and putting solutions in place to avoid these hindering business operations.
- Ensuring compliance and employment law are adhered to across all operational sites and countries.
- Leading employee recruitment drives to secure adequate talent with the correct skillset.
- Coordinating HR systems, processes and data that are disparate and time-consuming.
- Promoting culture, diversity and inclusion practices across all sites and companywide.
- Assessing employee engagement and wellbeing requirements through salary
What Does it Take to be a Global HR Manager?
The ever-changing landscape of HR requires an individual that can multi-task and have a mind for detail. What’s more, a significant amount of specialist knowledge needs to be held in order to meet industry standards, country-specific legislation and compliance requirements.
Where Does Global HR Consulting Fit In?
Global HR can be a tough job for one person or one team, that’s why consultancy is often the best step forward, especially when entering new geographic territories
Consultancy offers businesses an outsourced solution when it comes to global HR and its demands. Essentially, it enables organizations immediate access to individuals who are already well-versed in global expansion and compliance requirements.
As a solution, it’s designed to work alongside an existing HR team, allowing them to focus on the priority tasks while the more complex issues are resolved by the outsourced HR consultancy company. It eradicates the risks of companies being penalized or experiencing lengthy lawsuits for conducting HR that isn’t fully compliant.
More importantly, companies shouldn’t feel the need to struggle with global HR on their own.
Did You Know?
A successful global HR strategy will improve brand reputation. Strong company reputations tend to attract 50% more qualified job applicants.
Common Errors Made in Global HR
✗ Following Every Process Manually
The right software exists, removing the mundane, monotonous and non-essential tasks from HR teams. This frees up your teams to complete the most essential and high-priority projects first.
✗ Breaking Local Employment Laws
Without due care or research, companies can easily break local laws as well as international laws. Pay attention to working hours and minimum wage requirements, as well as country-specific legislation to help you stay ahead.
✗ Lack of Training and Development of Talent
During the onboarding process, there should be progression and training plans in place for each employee. Companies that fail to do this typically see a higher turnover of staff and poor brand reputation.
✗ Failing to Manage Multiple Leave Policies
Leave policies are hot agendas within parliaments across the world now. From recognized bank holidays to paid family and medical leave, you’ll need a good system that oversees this, as well as a good payroll system that keeps track of leave days.
✗ Forgetting to Recognize Time Zones
Although businesses that are spread across the US are used to dealing with around six to eight time zones, those looking to expand for the first time won’t be. Structure is vital when conducting business across multiple time zones.
✗ Doing Everything In-House
Expanding is a huge task. It can be incredibly stressful, often burdening on free time. Companies make the mistake of doing everything in-house, which, under tight deadlines, can cause errors to be made. Seeking an outsourced solution is often the smart choice for smaller HR teams too.
How Can IRIS FMP Help?
Expanding your organization into new markets and geographical territories is vital, especially if it’s part of your wider business strategy. At IRIS FMP, we’ve supported businesses across 135 countries by establishing an HR strategy and approach that works for them. Get in contact with us today.