What claims to be the largest survey of employment practice of multinational companies in the UK recently underlined the importance of having an international HR management structure.
The survey of 302 firms, compiled by King’s College London, De Montfort University’s Leicester Business School, and Warwick Business School, says the existence of structures such as an international HR policy committee, regular cross-border international networking among HR managers and international monitoring of a range of HR data has a big impact on employment practice.
Roffey Park’s chief executive and previous group HR director at FTSE100 company De La Rue John Gilkes says one of the advantages of having these structures in place is that it maximises organisational learning.
“Knowledge management is even more crucial for multinational organisations with complex structures and communication channels. The more successful the organisation is the more likely it is to learn from its mistakes and take steps to ensure that history doesn’t repeat itself,” he says.
According to the report, the impact of these international HR structures is also felt on pay systems, performance management and the diffusion of innovative practices across national borders.
Gilkes says the key challenge for HR working at this level is to decide what processes, policies and systems are internationally transferable. “Development and performance management processes are often common as these are equally applicable in New York, Rome or Moscow. Issues relating to individual employees cannot be handled in the same way, as these are affected by the different cultural working styles and are far better dealt with at a local level,” he says.
The CIPD’s international manager Frances Wilson says many of the HR challenges facing multinationals boil down to effective cross-border communication. “Many companies, for example, grapple with global pay issues and find it difficult implementing policies locally. HR has a unique role in global companies and sits in a pivotal place to advise different parts of the organisation and develop policies,” she says.
According to human capital management consultancy Penna’s managing director of HR consulting Grahame Russell, employer branding can be particularly challenging for multinationals. “To aid retention, employees need to feel like there is a mother ship looking after them as sometimes it can feel like you are working for several different companies. A global HR strategy is needed so that the same benefits are provided in each part of the company and employer branding is strengthened, but without losing respect for local cultures. This can be a difficult balance,” he says.
Wilson says HR working in domestic roles should look to HR practices in multinationals for inspiration. “There are some important lessons to be learnt around how to help people work effectively together in diverse teams and using project work to bring teams together to solve problems. Because there is such a diverse mix of teams in multinational companies, they need diverse solutions and these can provide some good examples of best practice.”
Russell agrees. “In global companies it is that much harder to join up the dots and get people to see the part they play in the success of the organisation. National organisations suffer from the same issues on a smaller scale when unifying HR polices across the regions, so looking at global HR strategies can provide useful insight,” he says.