Top 5 HR Challenges International Companies Face
The promise of the tension-centered approach is that is provides insight into the ways these tensions are resolved in practice, and can point toward strategies to improve practices. Since international organizations hire all around the world, your workforce will encounter many cultural differences, such as language, race, and ethical norms. It is of utmost importance to understand different cultures in the international areas your business is operating in. When employees feel unwelcomed and disrespected, employee retention rates and employee satisfaction drop significantly which can lead to even more international HR issues. Always have the competency to understand how to engage diverse employees and navigate cultural norms when working with international employees by constant research and overseeing how workers react to the company’s actions. This can be from understanding how work life is controlled to how recruitment of a new employee is handled in that country.
- While the HR specialist role is wide-ranging, key aspects revolve around implementing the most current recruitment strategies, and communicating benefits.
- A tension-centered approach to analyzing these complexities in MNEs particularly focusing on work-life management and strategy development provide insight into constraints and challenges into organizations operating globally.
- Nonetheless, the value of merger and acquisition expenditures within the total has basically been on an upward trajectory from 2009 to 2018 (from less than $300b to $816b), suggesting that individual MNEs are becoming larger over time.
- When human resource departments get swamped with all the HR systems, skill gaps and trainings can easily be missed or mismanaged.
- Most people just assume that the way they expect to do business and relate to others is the norm, and never stop to question that assumption.
As remote work and globalization expand, so will the need for workforce planning concerning international employees. This will help organizations with building up their applicant pool, pursuing plans into international territory, new competencies and more, but one thing is for certain. Your organization’s human resource department will have to learn to navigate international HR challenges for human resources. Rozenweig (2006) concluded that HRM is the function in an MNE that is most likely shaped by local responsiveness. Earlier work by Rozenweig and Nohria (1984) found that the forces for local responsiveness were strongest for those HR practices in MNEs which are influenced by well-defined cultural norms and by local labor laws. In MNEs, work-life policies and practices need to be informed by local norms and laws because the relationship between work and non-work activities will be heavily influenced by both cultural norms and labor laws (Bardoel & De Cieri, 2006; Edwards & Kuruvilla, 2005).
International human resource management
If your workforce is international, help them feel included and as competent in English as they do in their native language. Encourage them to join free webinars on communication, or offer them training budget they can spend as they wish. All these opportunities are incredible allies that will help you attract the right people hr challenges in multinational companies and retain them for longer. Communicating standards across a company can be challenging even when everyone is in the same building; when workers are across the globe this tends to muddy the matter. There are elements that depend upon communication — application details, job descriptions, interviews, offer negotiations.
However, once you have it under control, this sort of diverse work environment provides daily opportunities to learn other customs, engage in cultural dialogue, and become informed about international politics without even booking a flight. Engaging in cultural exchange is as https://adprun.net/ simple as striking up a conversation with someone in the break room. Don’t just clumsily use Google Translate to reword job postings or position offers in other countries; utilize native interpreters to correctly communicate the context of your text as well as the vocabulary.
Why Do Global Companies Face More Challenges?
Multinational corporations (MNCs) that utilize global HR specialists have advantages in honing the recruitment outreach process in a locally relevant manner. Beckham recommended that HR take the lead in establishing diversity, equity, inclusion, and belonging (DEIB) groups, which are generally staff-led working groups or task forces that develop and promote strategies and initiatives for their workplaces. These can be fertile ground for exchanging ideas and information, and can provide valuable diversity training for all colleagues. Cultural assumptions and biases are often unconscious, meaning we don’t even see them. Most people just assume that the way they expect to do business and relate to others is the norm, and never stop to question that assumption.
Global HR compliance: Dealing with HR issues within distributed teams
Now we know that working from home works, many employees will want to keep doing it when the coronavirus crisis fades. HR is a support function, and similar to any service function, we need people who are great listeners and communicators. We also need people that are very good at multi-tasking with good organisational skills, as the diversity of tasks in HR is very large. Your source of funding for the expansion could mean different tax rules depending on location. Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks. The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually.
International human resource management involves creating strategies for the effective management of employees to benefit an organization. It serves an important role in maximizing the employee experience to improve employee performance and serve broader company objectives. Lobel and Faught (1996) identified a strategic approach to work-life initiatives as involving an integrated set of policies, programs, and cultural change efforts that reinforce business strategies (e.g., lower cost producer or providing superior customer service).
However, there has been limited discussion among researchers regarding the roles and responsibilities of HR managers in MNEs and even less attention given to work-life management in the global context. A tension-centered approach to analyzing these complexities in MNEs particularly focusing on work-life management and strategy development provide insight into constraints and challenges into organizations operating globally. There is evidence that tensions often exist in MNEs between corporate/global HR, local HR, and operational line managers involved in implementing work-life policies and practices.
This diversity can be greatly beneficial, offering a dynamic work environment that promotes different perspectives, creative problem solving, and greater employee engagement. A key problem for global work-life strategies, which is relevant to the “no recognition” approach, is that they may be difficult to monitor and assess (Masi & Jacobson, 2003). Unlike measures of quantity and quality for manufactured goods, it may be costly to ascertain whether work-life policies and practices are useful and effective, and the results might be ambiguous. For example, suppose an MNE created a company-wide policy supporting reduced-hours arrangements as a strategic matter, and that policy created tension with operational needs in some facilities. The opposition strategy involves recognizing, studying and understanding this tension. The key to opposition strategies lies in an explicit recognition of tensions, and not necessarily an explicit resolution.
For a specific example, a US MNE proactively sought to hire disabled employees using a business case rationale. A regional HR director in China responded that the business case did not make sense in China, but ultimately implemented the policy as consistent with corporate social responsibility (Bardoel, 2016). Another example of synthesis involves efforts to cast work-life initiatives as part-and-parcel of broader diversity initiatives. Like diversity initiatives in general, work-life initiatives recognize and respect the unique circumstances and talents of individual employees, and strive to turn conflicts around difference into sources of synergy and success (Childs, 2005; Dallimore & Mickel, 2006). For example, if IBM had developed its global policies in the context of operations in Western, developed nations, the policies might contravene local law and culture in Asian or African nations (e.g., regarding LGBTQ rights).
A Framework for Resolving Tensions in Global Work-Life Management
However, it’s important to gain a full understanding of which elements of the traditional hiring process you may need to address in order to overcome the challenges of multinational recruitment. In most cases, the key is a degree of flexibility — be open to learning about the cultures of other countries and adapting to the differences. As such, there needs to be a significant level of human resources (HR) expertise applied to your approach. While the HR specialist role is wide-ranging, key aspects revolve around implementing the most current recruitment strategies, and communicating benefits. Also important, experts added, is that Human Resources departments make sure it’s clear that cultural awareness trainings or policies aren’t making generalizations or reducing individual people to cultural stereotypes. Recognizing differences is critical, experts said — but so is recognizing the limits of what they say about individual employees.
There can be benefits related to when you file for taxes on money made, and forming an understanding within your industry allows for you to decide when you can legally claim your money in the most economically sound manner. Depending on whether you’ll have a sales office, a cloud-based legal entity, or a foreign partner will dictate what laws you’ll need to pay the most attention to. Staying ahead of the curve with legal compliance will reduce stress by a lot and pay off in the long run. Make sure to audit legal requirements to keep track of any changes that need to be made. For examples of the complexities involved here, De Cieri and Bardoel (2009) find that MNE efforts to attract and retain women diverge depending on local gender norms and economic conditions.