International HR Day: Challenges of Managing a Global Workforce

As HR professionals around the world celebrate International HR Day on May 20, they are reminded of the evolving complexity and global reach of the profession. No longer confined to managing employees within a single jurisdiction, HR leaders today are operating across borders, cultures, and legal systems. With this expansion comes a host of challenges — particularly in the realm of international employment law.  

Employees Across Borders

When multinational companies manage offices across borders, the biggest challenge they face is “resolving the ‘uniformity versus diversity’ challenge,” said Donald Dowling, an attorney at Littler in New York City. It is natural for a company to want to align its employment practices and policies on a global basis for the sake of consistency.  

However, countries are “stubbornly local, imposing roadblocks” at every turn, posing compliance challenges to a global HR structure, Dowling said. He added that along with managing different languages, cultures, and values, HR has to negotiate differences in pay rates, employment laws, and employee expectations.  

To handle differing labor standards, HR teams need to have a strategy in place. This may mean “homogenizing the policy, or watering it down, or making local country-by-country tweaks,” Dowling said. For example, when a company decides to launch an AI policy, it likely will need to compromise or alter the policy so that it works across borders. Dowling noted that this may involve “compromises or tweaks that the employer would prefer not to make.”

When introducing a new policy across borders, HR leaders need to consider how appropriate the particular concept is for a global policy. It is easy enough to create a policy forbidding bribery, insider trading, or disclosing company secrets.  

“But lots of other HR topics are not readily susceptible to a single global policy” due to differences in local laws across countries, Dowling said. He gave examples including pay scales, time off, health care benefits, and unions.  

There are also topics “where a single global HR policy is possible, but a challenge where compromises or local tweaks are necessary,” Dowling said. These include discrimination and harassment, sales commission plans, AI and social media use, and workplace health and safety.  

‘No Shortcut’ for Employment Contracts 

When employing workers in distant jurisdictions, employers must ensure that employment contracts comply with relevant local laws.  

“There is no shortcut,” Dowling said. “An employer drafting an overseas employment contract needs local-law input,” especially as legal norms vary widely by country. 

It may be tempting for companies to employ remote workers in another country, but they should be aware of the legal risks. The biggest of these involves employing a worker in a country where the company has no branch or subsidiary. Offshore payrolling requires careful compliance with local labor laws and tax regulations.  

Major Legal Shifts

International employment law is anything but static. Rapid advances in technology and shifting worker expectations continue to reshape the international legal environment.  

“There is a lot of talk worldwide about regulating AI,” Dowling said, but he has yet to see fundamental changes to employment law.  

Worker classification, another hotly debated topic, has seen more legislative efforts. “The International Labour Organization is considering a new resolution on platform work,” Dowling said, and employers may expect to see that in “a year or so.”  

European-style privacy laws regulating personal data, including HR data, have “proliferated beyond Europe over the last 10 or 15 years,” Dowling said, “but the pace of new countries passing these laws is slowing.” The U.S. has not passed a national law that is as expansive as the European Union model.

The Future 

Dowling believes that over the next five to 10 years, HR professionals should prepare for a new area of employment law to expand: Gender pay disclosure and pay transparency laws have grown to international significance, and “the new EU directive on this topic is supposed to be ‘transposed’ (implemented in European countries) next year,” he said.  

When planning to introduce a policy across borders, HR teams should think beyond headquarters. “Pause before reflexively exporting some headquarters-country solution into a foreign country” that may not share the same underlying concern, Dowling emphasized.  

For example, a company based overseas and expanding into the U.S. should know that U.S. employees may not expect generous paid time off, he said. Likewise, U.S. companies should understand that foreign workers will often not expect health care benefits.