‘Micro-multinational’ companies needing to hire skilled workers abroad face a new set of challenges as the Covid crisis endures. Tristan Woods investigates the issues, reflecting that the future of work is looking increasingly global.
HR leaders are rethinking what the workplace and the “future of work” mean for their organisations and workforce.
The new world faced by HR leaders, which is characterised by a distributed workforce with employees working remotely at least part of the time and some working permanently in another country, was taking shape long before the pandemic.
Collaboration tools made remote work more accessible than ever, while the globalisation of economies allowed HR teams to readily source talent and personnel from anywhere in the world. In fact, by early 2020, many UK companies had already upgraded their workforce technology in anticipation of Brexit and the resulting challenges for those who are now international hires.
But the pandemic’s outbreak created a unique business environment in which HR directors in all countries – not just the post-Brexit UK – are seriously re-examining today’s global economy and considering how to import or export more of their labour and talent.
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Looking back at the past year, where does your organisation fall on that distributed workforce spectrum? Can you support and manage employees who never come into the office? Can you support employees who live and work permanently in a country where you don’t have an entity? Suppose you were to grow and expand into other countries – could you support employees in multiple countries?
In this new climate, it’s unlikely that many chief human resources officers expect to revert to the traditional 9-5 office-based work structure. Instead, their workplace is now the cloud, and most will be hiring talent in multiple countries, effectively classifying their organisations as emerging- or micro-multinationals.
Yet, smaller emerging enterprises face the most significant obstacles. Although they have the apps and other technology to make remote work possible, they’re inadequately equipped from a human resources standpoint to hire and pay employees compliantly across different countries. Typically, their HR teams have little to no market intelligence in countries beyond those where they have experience and usually within the countries in which they have an in-country entity. The other source is through working with partners that can support their growth through global employment outsourcing.
For the companies just now entering new countries or scaling up their global workforce, success and growth will depend on three business fundamentals: people, processes, and technology.
Having the right people in place
Acquiring top-tier talent – especially within the knowledge economy – may not have been a realistic option in the early days of your business. But as you scale
beyond a startup, you must have that talent in place to keep the company moving forward. It’s challenging enough for HR teams within their home market to identify the right candidates. And now, even more so when working with a global talent pool that has access to global employer options.
Do you have people on your team with experience going international, doing business outside your country or with local knowledge about employing in another country? You may not have those people in place, but they are critical as part of your infrastructure before you can expand. They will be your eyes and ears as an emerging multinational organisation. But suppose they can’t be found right away? A third-party “employer of record” (EOR) could provide the same local expertise and hiring support.
Companies need to be sure that employee experience doesn’t suffer when they grow and expand; without upgrades in processes and technology to meet new workforce dynamics, the HR team spends most of its time on tactical work and less on employee engagement. In other words, your ability to retain top talent largely depends on the strength of your HR processes and technology, especially when managing remote employees in other countries.
Getting your workforce data in order
To demonstrate the potential challenges as you take on the responsibility of being a multinational company, let’s consider a common scenario in which you can only find the talent you need elsewhere. There may be multiple countries where qualified talent is available. Still, you have no local HR connections in those countries, locally established banking to make payroll payments and no easy way to manage local tax and regulatory compliance. At this point, hiring managers might feel overwhelmed, give up on company expansion or settle for a local candidate.
What you need instead is a process redesign to make it quick and easy to see your entire global workforce (data and information) in a single view, along with the tools to manage and manipulate that data. For example, the payroll team should not be spending their time performing language or currency conversions for employees in other countries; these should be automated tasks in the payroll software and easy to convert back and forth.
Another common example would be managing holiday or paid time off, which can vary for employees across different countries. Your workforce management software should easily integrate this sort of regulatory auditing into the company’s time entry and payroll processes for a smooth, seamless employee experience.
There are too many HR variables, specific to each country, across all employees for you not to invest in designing processes for a new business environment redesign. The key to HR process design is to put data first and build additional capabilities to manage employee data and information. Manual or patchwork processes (like toggling between payroll spreadsheets) may have worked for a smaller organisation but will not scale to organise a truly multinational workforce. With your data and information in order, your organisational intelligence will be controlled by IT systems – not by humans – and your HR team can focus on finding the best talent – and keeping existing talent engaged.
The key to HR process design is to put data first and build additional capabilities to manage employee data and information. Manual or patchwork processes (like toggling between payroll spreadsheets) may have worked for a smaller organisation but will not scale to organise a truly multinational workforce.”
Technology and the future of work
Like many companies, Covid may have functioned as a stress test that measured your ability to virtually manage a distributed workforce. Some companies passed the test with flying colours, while others quickly realised they needed new HR and other technology solutions to meet the needs and challenges of today’s distributed workforce.
As your HR team prepares for the future of work, you may be held back by existing HR technology or your inexperience with the technology purchasing process. It may be comforting to know that you’re in the same boat as many other companies as you figure out how to build and manage a virtual office that can support top talent and productive employees from anywhere in the world.
Talent acquisition and retention should be your end goal for workforce management in a global economy. But that starts with applying new solutions to the everyday business processes you need to function, such as hiring and payroll.
Is your company ready for success as a global employer?
For CHROs and their HR teams, the future of work often gets complicated by buzzwords like emerging or micro-multinational. But beyond the terminology, the future of work looks very much like what it already is: globally distributed, optionally remote, virtually collaborative, and yes, multinational. And the solutions it calls for – like making international payroll payments quicker and easier – do not require significant investments or purchases.
What has changed since the onset of Covid is the collective sense of urgency and consensus that business is now a global reality. Unless HR leaders implement new strategies and solutions, they will lose access to the talent and other human resources they need to grow and be competitive.
Let the global pandemic and post-Covid economic recovery be a watershed moment and a call to action for your company to take a hard look at the management, processes and functions needed to build a workforce on a global scale.
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