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HR in a Global Environment

HR professionals are faced with addressing global issues on an ever-increasing basis. This is true even for organizations that historically only operated in a domestic environment. Issues include global competition for products and services, global talent management, risk and privacy, understanding global diversity and cultural issues, flexible reward systems, leadership challenges, and managing international assignments. While many of the HR competencies apply to domestic HR practitioners, new and heightened global skills are required for HR practitioners to deal with international issues.

This article will provide an overview of several key issues and competencies required for global HR practitioners.

Global Talent Environment

Challenges include working with an ever-increasing mobile workforce with trade and visa restrictions generally making it easier for employees to move from country to country. HR professionals must understand the various forms and methods of visas and the employer responsibilities to effectively promote and manage talent across borders, including employee taxation issues.

Technology advances have also increased the ability of remote access, telecommunications, managing employees on a 24/7 basis and project transfer to “follow the sun” as operations move from one geographic region to another during the workday in other regions.

Different generations in the workplace, combined with country and cultural differences impact all aspects of talent management including recruitment, selection, onboarding, coaching, training, performance management, compensation, and retirement issues. A “one size fits all” approach is not effective so a balancing act between globalization and localization is critical. Among the talent issues to be addressed:

  • Dealing with 24/7 global operations
  • Millennial / generational differences regarding values and workplace expectations
  • Intellectual capital and knowledge transfer
  • Mobility issues
  • Market skill shortages and competition for talent
  • Phased and early retirement issues

Technology and Privacy Issues

Global technology, data collection, and privacy regulations must be understood and followed. Identify theft, hacking, privacy notification, and data security factors must be taken into consideration. HRMS tools must be configured to determined appropriate system design accounting for tracking personal data, currency conversion, language, pay rates and frequency methods combined with data encryption.

Global Economy

New competitors, changing labor markets, labor force availability, currency and inflation factors, tariffs, customs and import laws, grease payments and corporate social responsibility within global markets must be considered including:

  • New and emerging labor markets
  • Inflation and corporate/employee taxation
  • New skills sets
  • Unemployment levels

Understanding Cultural Diversity

A key trait of effective human resource management is to understand and reconcile cultural differences within the organization and harmonize these relationships. Different cultural norms and nuances, color and numerology issues, gestures, societal norms, power/distance relationships, recruiting efforts and performance management must be clearly understood on a country by country basis.

Agility with Reward Systems

On a country by country basis, total reward systems (base compensation, variable pay and benefits) must be effectively applied. A total reward philosophy statement may provide guidance to assist in developing global systems based on what is provided by the home country, normative practices, taxation levels and employee expectations. For example, in some countries the government provides comprehensive health care, life insurance, disability and retirement plans. In other countries, minimum health care may be provided by the government with a common practice to have the employer provide supplemental health insurance.

Managing Global Leadership

Effective global leaders have several key characteristics, many of which are similar to any leadership role such as integrity, trust, interpersonal communication skills, people development, vision, problem solving and strategic planning. Some of the key differences are greater flexibility and agility to adapt, appreciation for subtle and not so subtle cultural nuances, diversity and inclusion awareness, influencing skills, international business experience along with the ability to travel internationally.

Managing International Assignments

Most organizations do not handle expatriation and repatriation well. In general, there is a lack of assignee assessment and preparation including family interviews, broader cultural and language training, ongoing feedback and discussion, visa requirements, knowledge of local customs and laws, tax reconciliation and identification of the repatriation process. International assignments typically cost three times the individuals base salary and roughly 60% repatriations result in the assignee leaving within six months after return. Awareness of culture shock and reverse culture shock will assist in managing assignments. Having additional resources to assist with managing travel, emergency evacuations, language and cultural training along with balance sheet evaluation of appropriate compensation and living expenses, tax equalization and lodging assistance are invaluable.

Communication Skills

Proficiency in multiple language skills are a huge plus. French, Spanish, German and Flemish are preferred in addition to English. But beyond language skills, understanding cultural nuances and avoiding US based idioms or phrases may create difficulties and relationship challenges. Executives with experiences in living in multiple countries will provide greater understanding of the issues.

While the above are only a partial list of global HR competencies, certification with SHRM-SCP or HRCI – GPHR will also assist HR in understanding many of these concepts and critical issues.

About the Author

Larry Morgan, MAIR, SPHR, GPHR, SHRM-SCP
Larry is an Adjunct Associate Professor for the M.A. in Human Resource Management at Saint Mary’s University. He has a BA from Augsburg College in Communications and Political Science with a minor in Psychology and an M.A. in Industrial Relations from the University of Minnesota. He holds the Senior Professional and Global Professional in Human Resources (SPHR and GPHR) and the SHRM – SCP (Senior Consulting Professional) designations and has over 30 years of HR experience with a broad range of industries including consulting, retail, engineering, high tech, medical device, health care, manufacturing, transportation, insurance, financial services, public sector and not for profit organizations.