Global Human Resources 101: Essential Tools and Strategies

Global human resources deals with all aspects of HR within the worldwide context, including U.S.-based entities doing business internationally or non-U.S.-based entities operating in their own locale or worldwide. 

Global issues have an increasing influence on markets, supply chains, and business practices. Global employers must develop new competencies, mainly through developing cross-cultural understanding and substantial knowledge in international employment legislation, labor law and economic trends to capitalize on international growth opportunities. 

Developing countries offer increasingly skilled or trainable labor and proximity to growth markets. Emerging markets are rising sources of talent for tech jobs necessary for the future of work. The following HR functional areas have a role to play for all organizations who do business around the world.

Global Business Leadership

Research points to common themes to help HR professionals build a global leadership development program. Part of the challenge of global leadership is adjusting leadership styles to the particular culture(s) where the organization does business. In this SHRM People + Strategy podcast, Nathalie Grenache, Senior VP of People and Culture at Sanofi, a Paris-based global pharmaceutical company, discusses cultivating a thriving global culture.

An effective global leader is one who:

• Has the ability to master international business issues. 
• Can set direction, effectively lead people from different cultures and nations, and align global resources.
• Has a global mindset (i.e., the ability to take an international perspective and be inclusive of other cultures and views). 
• Has a sensitivity toward global diversity (i.e., the various ethnic, cultural, religious and class groups that exist within a global enterprise).
• Respects human dignity and the welfare of all employees — wherever they may live and work.

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The global leader must also be skilled in global integration, a strategy that emphasizes a consistency of approach, standardization of processes and a common corporate culture across global operations despite differences among cultures and laws. 

Mai Lan Nguyen, Senior Vice President of HR at Schneider Electric North America, offers her experience developing leaders in a global business on the SHRM People + Strategy podcast Beyond Borders: Lessons in Leadership from a Global HR Journey.

Benefits and Compensation

As companies aim to streamline their benefits and compensation plans, many attempt to globalize their offerings. What often emerges from this effort is a global philosophy about how employees are remunerated that is flexible enough to be adapted locally. Globalization of payroll technology is an emerging trend.

Incentive plans. More countries that were slow to adapt individual incentive plans are warming up to the practice. While a global incentive plan helps create a more cohesive culture, implementing it can be challenging. Knowledge of local payroll laws and  wage and hour requirements as well as whether U.S. employment laws apply is needed to ensure compliance in other countries. As in the U.S., these requirements may include:

• Minimum wage and overtime pay.
• Income tax withholding and reporting.
• Unemployment contributions.
• Retirement and social services withholding and filing.
• Record retention requirements.

Pro Tip: Incentive allowances (sometimes referred to as location allowances), such as mobility, foreign service, hardship and danger pay, are premiums offered by companies to encourage employees to accept different types of expatriate assignments. To determine the right amount, organizations need to take into consideration several factors, such as housing, crime and remoteness.

Member Resource: Designing Global Compensation Systems Toolkit 

Ethics and Social Responsibility

Business ethics and sustainability are important elements of operating in another country. An organization's practices in this area can be effective in communicating the employment brand to all potential and existing employees as well as to governments in other countries. Corporate social responsibility (CSR) is a burgeoning global trend that HR can influence.

CSR is defined as the commitment by organizations to balance financial performance with contributions to the quality of life of their employees, the local community and society at large. HR has an opportunity to use CSR to brand its employment message globally. Workers actively seek out employers that promote social and environmental responsibility. CSR initiatives help bring together disparate multinational company cultures.

Inclusion and Diversity

Cultural differences, language barriers, religious practices and sexual orientation all factor into the modern workplace. Take this concept global, and even more complicated issues emerge. Transplanting an organization's diversity programs in another country requires researching the issues, which may be vastly different from the ones encountered in the home country.

Pro Tip: Expatriates will need to be familiar with the country's culture to successfully transition into the new environment. The CIA World Fact Book has country-specific information related to cultural differences. 

Employee Relations

Living and working internationally bring forth challenging issues in employee relations, performance, absenteeism and motivation. Understanding cultural differences is imperative to an inclusive workplace and can ease many employee relations issues. 

Many multinational employers offer a global employee assistance program (EAP) — often referred to as an international EAP, or IEAP. EAPs provide solutions in diverse cultural situations to support or maintain maximum on-the-job performance. Consequently, multinational organizations have begun to offer their international employees — including their non-U.S.-based workforce — the benefits of an EAP. 

Labor Relations

Global labor relations, in particular the flexibility of the labor market, is one of the first factors to take into consideration when deciding where to operate abroad. Union representation, called works councils in many European countries, can play a large part when employing individuals in other countries. For example, works councils in Germany have broad information, consultation and especially determination rights. The council must be consulted on many workplace details such as how employee time is recorded. Failure to consult the works council before an employee in Germany is terminated will void the dismissal. 

Questions to ask about international unions include: 

• How pervasive are the unions?
• How powerful are they?
• What industries do they cover?
• What are the restrictions?

Safety and Security

An organization's safety and security policies, procedures and practices may need to be developed, revised and implemented as a consequence of its presence in a foreign country. Understanding and following a host country's relevant laws and regulations and establishing the organization's own safety and security measures are essential.

Example: The COVID-19 pandemic is an example of how employers in different countries all were forced to adapt to a global health and safety crisis. Ever changing guidance that varied around the world made managing the health risk even more cumbersome hen operating in other countries, which have their own labor and safety regulations. For example:

• The  European Agency for Safety and Health at Work (EU-OSHA) serves a similar function as OSHA in the EU.
• The  United Nations Globally Harmonized System of Classification and Labelling of Chemicals has addressed chemical labeling and classification. 

Understanding various global risks is necessary to formulate appropriate safety and security policies.

Example: Threats of terrorism against certain country nationals doing business in particular countries are a fact of life. In some areas, expatriates, particularly executives, may need security protection.

Geographic, cultural and technological factors pose challenges in developing safety and security plans that integrate a variety of jurisdictional imperatives and cultural norms.

Staffing Management

Globalization poses challenges in global staffing management for multinational corporations. What works well in one country might not work nearly as well in another country—and might even be illegal. Some particular staffing management challenges associated with global HR include:

• Global recruiting.
• Global relocation.
• Global outsourcing.
• International assignment management.
• Repatriation.
• Offshoring.
• Technology.

Current rising geopolitical tensions are also affecting the global workforce as Michael Froman, president of the Council on Foreign Relations, discussed in a recent Tomorrowist podcast.

Global Recruiting

Global HR professionals are being asked to source candidates for numerous positions—not just IT and support, but management, research and development (R&D), sales and marketing—from around the world. HR will need to identify, screen, test, interview and move talent into jobs more quickly and seamlessly than ever before, challenging HR professionals to figure out which recruitment strategies work best in which cultures. 

Pro Tip: When hiring globally, it is necessary to understand the differences in local nationals, expatriates, third-country nationals, and inpatriates. 

As in the U.S., misclassification of employees and independent contractors can be costly.

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Global Relocation and International Assignment Management

Concerns about family and trailing-spouse issues continue to dominate the reasons why employees turn down expatriate assignments. Careful selection, preparation and communication can help ease the transition. Each destination comes with its own logistics and support challenges.  

Member Resource: Expatriate Policy and Procedure

International assignment management is a complex function but one that offers the HR professional many opportunities for growth as well as the chance to contribute positively to the expatriate employee's experience and the organization's bottom line. 

A failed assignment can be quite expensive: The cost of a three-year international assignment can easily exceed $3 million. The increasing importance of global business to a company's bottom line means that international assignment management will only grow in value as a critical skill for HR practitioners.

Due to family concerns and the lack of robust repatriation programs, many employees are reluctant to take international assignments. HR professionals are responding by getting creative with shorter-term assignments or commuter options for employees, depending on the scope of the project.

Member Resource:  Managing International Assignments Toolkit

Repatriation

HR professionals can take a number of steps to ensure that expatriates enjoy a smooth return home and that the company can maximize the expatriates' valuable international experiences. To improve retention and satisfaction of returning expatriates, HR professionals should consider the following suggestions:

• Conduct post-assignment career planning before the individual leaves the foreign post.
• Facilitate mentor relationships among senior executives and expatriates.
• Assign a home-country mentor and an overseas mentor to expatriates.
• Maintain strong, regular communication during global assignments.
• Require home visits, and encourage expatriates to use them to network professionally.
• Keep expatriates in the forefront of succession planning.
• Provide repatriation assistance to address assimilation and reverse culture shock when returning home.
• Tap repatriates to serve as trainers for future expatriates.
• Provide forums for repatriates to share their experiences.
• Develop a tracking system to determine if repatriation turnover is a problem.

Offshoring

Offshoring is the relocation of business processes and services from one country to another. As technology allowed for more white-collar jobs to be offshored to India, China and Eastern Europe, many U.S. companies rushed into the practice, lured by promises of major savings in payroll.

But reality quickly set in as cultural challenges emerged, quality of service and products declined, and a consumer backlash set in. Offshoring of HR, IT and R&D will continue, but companies will need to consider the pros and cons, the training and knowledge transfer, and the cultural understanding needed to make the practice successful. 

Technology

Between a growing global economy and the shift from production orientation to a knowledge and service orientation, organizations increasingly seek avenues that offer greater flexibility to remain competitive. Recruiting and retaining the best talent—wherever that talent may be—is one of the best ways to compete. Accordingly, HR needs to leverage technology to enable employees in dispersed locations to work together in global virtual teams. By using virtual teams, companies can take advantage of competitive synergies that teamwork offers along with the advancements in information and communication technologies. In this People + Strategy podcast, Nicole Sahin, founder and CEO of G-P, the creator of the employer of record (EOR) industry, and the co-founder of Gia, the world’s first AI-based global HR compliance advisor, explores how AI can simplify HR complexities across geographies, from onboarding to cross-cultural communication.