Globalization Presents Complex Challenges for HR Managers

As organizations become increasingly global, HR managers will face new challenges as they try to build productive, cohesive workforces that in some cases span many cultures, countries or regions, according to a paper by the Society for Human Resource Management (SHRM) Foundation.

The February 2015 paper, Engaging and Integrating a Global Workforce, was researched in partnership with the Economist Intelligence Unit. It was highlighted this week at the SHRM 2015 Annual Conference & Exposition in Las Vegas.

“We believe that understanding the fundamental changes impacting the world of work is the first step toward preparing for them—and ultimately leveraging them for competitive advantage,” wrote SHRM Foundation executive director Mark Schmit.

The Foundation described the paper as the product of a “multiphase initiative to identify and analyze critical trends likely to affect the workplace in the next five to 10 years.” Its findings are based on surveys, expert panel discussions and other research.

Demographics and Diversity

The paper explores what it calls the “advantages and pitfalls” that come with managing workers in an increasingly global economy.

For instance, the paper determined that a dwindling youth population in developed economies is causing skills shortages. Some of these shortages are being filled by older workers, more women in the workforce and cross-border migration, the paper said, which means “demographic as well as cultural diversity will continue to define the global workforce.”

“Older workers provide experience, but they also pose challenges for organizations, including providing health care for a population that will experience four-and-half-times as many disabilities as younger workers, creating flexible work schedules and shifting responsibilities away from physically demanding work,” the authors wrote. “The challenge is to identify the right job roles, incentives and retraining opportunities for each worker while avoiding age-discrimination practices.”

Moreover, HR professionals must prepare for the complexities that arise when mergers and acquisitions toss together people from differing company cultures, the report said. It described how, when U.S. pharmaceutical Upjohn merged with Swedish Pharmacia AB, “no one foresaw the resistance to company-imposed policies such as alcohol-testing and smoking, which resulted in cost overruns, a slowdown in product launches and the eventual sale of the company.”

‘Tug-of-War’

When companies expand into new markets—especially into developing regions—business practices that are acceptable locally may be at odds with the values of the company and the laws of its regulatory agencies.

“This creates a tug-of-war between social responsibility and the need to be successful in those markets, which can turn into significant risk,” the paper’s authors wrote. “The challenge for HR is to gain a detailed understanding of local environments and their accepted business practices. It then needs to establish protocols that are customized for each region and communicate these protocols throughout the organization and across its supply chain.”

If local labor laws or practices do conflict with the organization’s policies, HR “needs to be the voice of the individual and ensure that the company maintains its integrity, even when this goes against the potential economic value.”

In addition, it’s up to HR to help employees adapt when they move from a head office to regions with different societal and cultural norms, as well as to identify talent in new markets and geographic locations.

HR managers must also recognize that laws regarding temporary and part-time workers differ from country to country. The laws of Indonesia, for example, don’t recognize any difference between part-time and full-time workers; part-time workers are entitled to all the same rights.

“HR’s challenge … is to understand the nuances of the laws and customs in each of the regions where it operates and ensure that it is treating part-time, temporary and remote workers legally,” the paper advised. “Regulations become murkier when the employment process is conducted through online crowdsourcing or other, less-traditional recruiting methods. Keeping up-to-date with ever-changing and complex labor laws in each country and region will continue to present a constant challenge beyond the traditional visa issues, local versus foreign worker regulations and migration laws.”

Dana Wilkie is an online editor/manager for SHRM.