As the world becomes increasingly global and interconnected, and as companies continue to expand into new geographies, nationally and abroad, HR professionals have both opportunities and challenges as they attempt to ensure consistency amid what may often feel like chaos.
The pace is not likely to slow any time soon.
As PwC pointed out in an October 2014 report, Global Economy Watch, the value of global trade is expected to grow from about $10 trillion in 2013 to about $18 trillion in 2030. That’s a significant shift and one to which organizations must be poised to both leverage and respond. But, while from one perspective it may seem that the locus of control and impact is expanding, from another it’s important to consider that, as has always been the case, each element of even the largest global organization is inherently local.
That perspective is particularly pertinent for HR professionals. Employees don’t operate globally; they work locally. And, they work in locations that may differ in both large and small ways.
Josh Bersin, a Forbes contributor, pointed out recently that: “There is no ‘global market’ for goods and service, rather there are now a set of globally connected ‘local’ businesses.” That’s an interesting point and one that should resonate with HR pros. Despite the fact that you may work in an organization that operates globally, the HR issues you deal with impact employees locally.
Bersin points to research in the DHL global connectedness study and notes that, while companies may attempt to standardize their operations, including HR practices, the unique differences between locations also requires localization, the recognition that each location operates within its own economic conditions.
Certainly compliance is an obvious area of HR concern where it is clear that global parameters simply can’t apply. Variations exist at multiple levels, down to each local operation. HR practitioners must be able to connect locally while working globally. Organizations with a global presence face a myriad of challenges related to managing a global workforce while ensuring compliance with each country’s employment laws—including local employment laws. From hiring practices, to compensation, to ensuring employee health and safety, HR must have a local focus even—and especially—in a global setting.
Some of the key challenges that HR professionals face on a global basis include:
- Implementing anti-bribery procedures which vary significantly from one country to another;
- Protecting the rights of ex-pat employees, while following individual country laws which may vary significantly from US laws; and
- Compensating and providing benefits to a global workforce and determining to what extent to harmonize grading, terms, conditions and benefits between countries.
The bottom line is that it pays to be proactive. Even if your organization is in the early planning stages of establishing a global presence it’s not too early to begin exploring the issues and opportunities that globalization will bring. Understanding the issues and having a strategy in place for balancing the local/global balance can ensure both compliance and employee engagement.