Compliance tops list of international HR headaches, survey finds

Global HR

Keeping up-to-date with employment law requirements is the biggest challenge for international HR, according to XpertHR’s first major survey on managing employees globally.

Seven out of 10 respondents to the survey, which questioned 90 senior HR professionals working for employers with more than one million staff, said that keeping on top of employment law and other compliance requirements was a challenge.

Managing cultural differences (67.8%), recruiting and retaining the right people (60%) and getting hold of accurate pay benchmarking data (58.9%) also ranked high on the list.

Fewer than half (45.6%) of firms operating in more than one country had a specific international HR strategy, while only 37.5% had a global grading structure and one in three (34.4%) had an international reward strategy. Just under two-thirds (64%) reported using an international performance management framework.

With this in mind, a big theme for international HR professionals was the extent to which policy and practice is centralised or devolved.

It is most common for firms to have consistent global policies for performance management, equality and diversity and recruitment, the survey found.

Advice from international HR managers

  • Use clear global principles or strategies.
  • Conduct research, research and more research.
  • Develop a network of advisers and stakeholders, both within and outside the company.
  • Be aware of the resources and time needed to plan and manage people on international assignments.
  • In some areas, assume you know nothing – use specialist advice where needed.
  • Do not underestimate the impact of cultural difference.
  • Bear in mind long-term workforce and talent management implications, such as the impact on the home country talent pipeline.
  • Have contingency plans and budgets for unexpected costs.

Source: XpertHR international HR management survey, 2014

However, when it comes to absence, maternity benefits, termination of employment and pensions, a clear majority of employers do things differently in each location.

A set of common principles can help employers make effective decisions globally, respondents said. As one HR professional noted: “Have some basic but fundamental rules in place at the start, rather than making it up as you go along.”

Alan Measures, global reward director at global engineering firm Moog, which operates in 26 countries, said that his firm had previously taken a “heavily devolved” approach to people management. But it found that “everyone doing things their own way can lead to complexity and cost” and so it is now introducing greater consistency.

He cautioned against swinging the pendulum too far the other way, however, saying that: “Too much centralisation can lead to policies being imposed inappropriately in very different countries, especially where UK or US staff make assumptions about what works elsewhere.”

Care with language is also important. “I used the phrase ‘pension scheme’ in the US until I realised that ‘scheme’ is not a word they use in this way and simply means to plot deviously,” he added.

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