Carol Duque, SPHR, recently read with interest a story posted on the Society for Human Resource Management (SHRM) web site about HR professionals entering the global arena for the first time. It piqued her interest so much that she wrote to SHRM asking how her company, Valiant Petroleum in Corpus Christi, Texas, should proceed with its HR initiatives in a foreign country. Valiant is contracted to build a pipeline infrastructure in the Republic of Ghana in West Africa.
Her questions were varied: “What resources are available to me to learn about the local customs, salaries, vacation, tax implications etc? What questions should I be asking and whom should I consult with?”
In addition to pointing the HR director to the Knowledge Center as well as SHRM’s free legal helpline, and other resources, SHRM Online staff decided to have her pose more specific questions to global strategy expert and one of SHRM's 61st Annual Conference & Exposition Master's Series presenters Dr. Anil Gupta of the Robert H. Smith School of Business at the University of Maryland at College Park; Ron Adler, a member of SHRM’s Human Capital Measurement/HR Metrics Panel and president of Laurdan Associates, Inc., a human resource management consulting firm in Potomac, Md.; and to Dr. Neal Goodman, president of Global Dynamics Inc. Warren Heaps, a frequent contributor to SHRM’s HR Talk bulletin board and a partner with Birches Group LLC in New York City, also weighed in. Heaps has more than 25 years of HR experience, most of it in international HR. He’s a contributor to the International HR Forum, a blog for and about global HR.
Here are some of her questions:
Question: From the HR perspective, what is the prime driver in moving our organization forward and helping achieve strategic success in a multinational setting?
Answer: “To achieve success, Gupta said, “A company needs to be far more open to, and far more knowledgeable and proactive in pursuing market opportunities outside the home country.”
“If there was one thing that was most important in being successful … Carol should take the time to understand how things are done there and why they are done the way they are and not to assume that whatever you do in your home country is going to be the same,” Heaps added. “Countries are different, and culture plays a really important role in doing business in countries overseas. Oftentimes, people are way too naïve about the impact of culture and how you conduct business.”
Question: What techniques are suggested to perform due diligence?
Answer: “Learn about the country,” Heaps said. “Cultural wizard is a tool you can use. Created by RW3.com, what it enables you to do is … build a culture profile for yourself and compare your culture profile for the one you’re operating in. Carol can look at a cultural profile for the U.S. and look at one for Ghana and see the differences,” Heaps suggested. Additional resources include the CIA World Factbook, the United Nations, the Chambers of Commerce—in the U.S. and in Ghana (if there is one), the U.S. Consulate, the U.S. Department of Homeland Security, and in Duque’s case, the Ghanaian Embassy and Ghana’s national web site.“You wouldn’t want to rely on any one source as the absolute fact, but Wikipedia is [also] an excellent starting point,” Gupta said.
“All of those sources are good sources,” Heaps added, noting that the World Bank publishes a Doing Business Guide where they rank countries from high to low in the number of days it takes to establish a business and how to get a business registered and the regulatory and red tape factors.
He said checking the U.S. State Department’s web site for advisory bulletins is helpful as well. He suggested touching base with corporate security experts and the National Foreign Trade Council. “They are devoted to free trade and promoting trade overseas,” Heaps said. “They help companies deal with international assignment issues; there are also consulting firms that work with countries that are expanding overseas. So if Carol’s company has never had an overseas subsidiary they should look into them—like High Street Partners. They help companies expand internationally by working with them to set proper entity or subsidiaries or branches to comply with the various registrations, tax filings, setting up payrolls, benefits; they obtain market data on compensation, accounting firms, etc.”
Adler suggested Duque “contact … the National Institutes of Health (NIH) to see if there are any special vaccines” employees might need before traveling.
Question: How can workforce metrics and tools measure global talent acquisition and mobility costs in addition to fully demonstrating results against strategic objectives? What sources are available to enhance multinational hiring effectiveness?
Answer: “When we are talking about getting the best people abroad, keep in mind that the company may be well known in the U.S. or in its home country, but it may be a tiny player in the foreign market,” Gupta said. “Invest in labor market branding,” to distinguish yourself from the competition. “The second thing is that a multinational company brings something to the table that a local company cannot–the ability to provide training and development at a higher level and be able to offer global assignments.”
Adler agreed. “You’ll look at these key metrics …time to hire, opening and location. How long does it take to hire people to fill positions? That’s an acquisition type of metric. Its value depends on the situation. Metrics in Africa or anyplace else will be different,” Adler said. “[For] some jobs a person can become productive in hours, others may take months,” he said. Other metrics include translation of languages, availability of key players 24 hours a day, time spent on cross-cultural or multicultural training.
Said Goodman, “When you’re going off into a new country, you’re like a Martian landing on a new planet. There are different rules and regulations and compliance issues but there are unseen rules and regulations that you may not be familiar with,” he said. Simple things, like who sits where at the table, can be important. “It’s not an official rule, but in some countries, if you’ve sat at the wrong table, you’ve offended people,” he said.
Question: What source(s) of information can be obtained about a cost-efficient, quality-of-hire and the speed-of-hire process system?
Answer: “It varies extremely heavily from market to market and it varies very much by the type of job for which you are hiring,” Gupta said. “The person you are trying to hire is in the local market. So what happens is going to be hugely driven by the characteristics of the local labor market.”
Question: In conducting a SWOT [Strengths, Weaknesses, Opportunities, and Threats] analysis and determining the external factors, what is the most valid form of information available? Specifically, I am looking for legal compliance in specific countries, labor market conditions, assignment logistics (e.g., visas, work permits, pre-decision trips), culture, compensation and benefits offerings.
Answer: “All of these are critically important factors, but legal compliance, labor regulations, and supply chain issues” are all issues for lawyers and consultants, Gupta said. “The best place to go to is the State Department,” Adler added. “There is a significant amount of information available on most countries.” He suggested tapping into the European Union as well.
Said Heaps, “One resource is a survey that my company conducts in Ghana. It includes compensation, benefits, labor laws, social security programs, and various employer requirements. Beyond that there are some resources available from accounting firms on tax and tax planning,” he said. “Regarding visas and work permits, you can get that from the Ghanaian government’s web site. You then need to engage an immigration law firm–you need immigration lawyers [in that country] to work with you.”
Question: How do I determine the industry standard for number of days to fill a job in a multinational setting?
Answer: “First the industry standard would vary from country-to-country and vary depending on the type of job,” Gupta said. “There is no global industry standard.” The best bet would be an HR consulting firm or Chambers of Commerce in the U.S. and one that might be operating in Ghana, Gupta said.
Question: What sources are available to enhance multinational hiring effectiveness?
Answer: “Make sure that when you hire people…you look beyond their technical skills… and don’t overlook the difficulty people might have with moving from the U.S. or Western Europe to West Africa,” Heaps said. “Ghana is not a difficult place [to live], but it’s still a developing country. Companies often find a really good candidate to do the job, but forget that person has a spouse and children and health needs, and unless you’re addressing all those issues … it’s not going to work.”
Aliah D. Wright is an online editor/manager for SHRM.
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