High Expectations for HR in Companies Going Global

By Joanne Deschenaux Jun 27, 2011
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LAS VEGAS—“Why take this class?” asked Lance Jensen Richards, SPHR, GPHR, to open his June 26, 2011, session “Global HR 101,” held here during the Society for Human Resource Management’s (SHRM) 63rd Annual Conference & Exposition. Richards, senior director of workforce strategy and evolution for Kelly Services’ Outsourcing and Consulting Group, then told a story about the HR director of a U.S. telecommunications company.

The CEO of her company, he said, met the CEO of a French telecommunications company while waiting in line to use an airplane restroom. They began talking, and a year later the companies merged.

The HR director told Richards that she had always felt like a competent HR professional, but “now I haven’t got a clue.” She had employees she had to relocate from Montgomery, Ala., to Paris and, even more difficult, employees she had to relocate from Paris to Montgomery.

Something as commonplace as “two guys standing in line for the bathroom” can lead to big issues for HR, Richards said. Many companies are becoming global—sometimes rather suddenly.

Richards then turned to three questions in turn. “What is globalization? What does it mean for HR? What do HR professionals need to focus on?”

‘Distance Is Dead’

Globalization is “the creeping inexorable growth in distance between producer and consumer,” Richards said. “In the 1700s, if your horse needed a shoe, you couldn’t go farther than your horse could walk.” But in 2011, because of leaps in technology, “distance is dead.”

Globalization has been occurring for centuries, and nothing has slowed it down, noted Richards, who called it “bulletproof.” HR must adapt to this situation. “That which you cannot avoid, welcome,” he said, quoting a Chinese proverb.

HR’s job is managing the supply of talent, Richards said—“having the right people in the right place at the right time at the right cost doing things right and doing the right things.”

CEOs don’t want to hear HR professionals say that they can’t do something because of border issues or tax issues. “They expect us to have worked that out,” he said.

So what is global HR? It is far more than managing expatriates, Richards explained. It’s about:

Managing and leveraging the differences and similarities in the diversity of national and business culture.

Attracting, retaining and cultivating global human capital.

Driving global HR strategies that are tightly interwoven with business strategies.

Ensuring that strategies for movement and utilization of people and work are in place.

Where HR Should Focus

So, what does the CEO expect from HR in a company that has “gone global”?

HR has a mandate to set and manage expectations at all levels—corporate, business development and country managers, Richards noted. To do this, HR must first understand the nature of the business. “We say, ‘Now that HR is aligned with the business ….’ We should change the word ‘aligned’ to ‘interwoven.’ HR must be interwoven with what the business is doing,” he said.

Additional steps HR should take include the following:

Avoid pushing an “HQ-centric” agenda, which may irritate locals at best and demotivate them at worst. Ask yourself, “How have we changed our corporate expectations to reflect the culture, realities and learning from this new country?”

Understand local labor issues, including legal constraints on the ability to hire, manage pay and separate employees.

Learn about cultural and historical issues. Do you fully understand the political climate?

Study local compensation and benefits practices. Ask yourself, for example, “Is it appropriate to implement a pay-for-performance culture? What are our competitors doing regarding benefits?”

Also teach the folks back home what you’ve learned, establish networks, and learn from others.

CEOs are worried that “globalization is rewriting the rules.” To succeed, HR must understand these new rules, Richards concluded.

Joanne Deschenaux, J.D., is SHRM’s senior legal editor.

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