10 Challenges of Multi-country HR-Reading time: 4 Minutes
Expanding the reach of your business and taking your operations international is an exciting time for any organisation. But with new opportunities come new challenges – and HR is no exception to that rule. Businesses that are upscaling, and even businesses that already have global employees, need to evolve internal systems and processes to ensure HR practices suit multiple cultures, compliance requirements and regulations.
By understanding the challenges that come with multi-country HR, and how these can be overcome, you will be better placed to make the right decisions for your company and employees.
Here are 10 common challenges of Multi-country HR:
1. Significant increases in cost
As your business grows, so too does the demand on your HR budget. On average, $483 is spent per employee, per year, on HR technology. As a company expands into new territories, it's easy to see how that already significant sum can build to unsuitable levels. From maintaining legacy systems to juggling multiple suppliers, cost is a serious consideration and challenge for HR operations.
Investing in a single solution can help mitigate this issue, both by centralising your platform and cutting out the costly enterprise-tier costs associated with many HR services. By selecting the right global HR platform, where costs don't skyrocket as business demands grow, it's far more feasible to keep up with demand whilst not becoming a financial drain on the business.
2. Lack of agility
The ability to be agile and fluid in response to the changing environment is already a prime issue for many businesses of all shapes and sizes, and particularly when it comes to HR. Keeping up with what's going on, quickly adapting to changes in HR processes and laws, and ensuring you're always on top of the next thing happening are critical requirements for global HR leaders.
The rise in the gig economy is a prime example that adds another layer of complication for global HR. An increasing number of highly skilled professionals are willing to market themselves outside of their home location. In some cases, these professionals are hired as freelancers rather than permanent employees, and they move from project to project for multiple employers. This is the future of work and something that HR must become accustomed to. When it comes to taking care of your extended workforce it’s even more important for HR to be on top of onboarding, data, and documentation, to be able to put out fires and make swift changes where they are needed.
3. Lack of HR insights for business decisions
Data is a vital component in providing insights for business planning. Our ‘Future of Work and People’ survey of thousands of global HR professionals revealed that up to 64% of companies are currently incapable of managing basic reporting, and more than 40% have no single source for data. This makes gaining valuable insights that could shape the businesses future far more of an uphill battle. Seeking the right international data to make informed decisions is a challenge that falls squarely with HR and is a must for long-term business success without any surprises.
4. Meeting legal compliance and data integrity regulations
HR must meet compliance and standards defined by different locations around the world, making it vitally important to be up to date and accurate with how data should be stored, and information kept.
Whether all your business locations are within the same continent or spread across all corners of the planet, different laws and local regulations will apply. Having different systems and set-ups in multiple territories can lead to data errors and discrepancies, which becomes more of a challenge when it comes to complying with globally impacted regulations such as GDPR.
5. Enhancing the Employee Experience
The larger and more widespread the business, the more challenging it is for an HR team to provide the same standard of employee experience that they do locally. Keeping in touch with employees, supporting a positive work-life balance and ready access to HR are all requirements of an international HR service. It's also vital that the technical sides of the employee experience are covered, such as accurate payroll and expense repayment.
6. Friction in the international HR ecosystem
For HR employees, the process of expansion can be a frustrating and challenging hurdle to tackle. From failing systems that don't deliver results, to a lack of connected local payroll systems, these challenges aren't just demoralising; over time, lack of centralisation and added difficulty in getting the job done can lead to time-sensitive work falling behind. This leads to more time spent learning new systems than carrying out responsibilities, and potential burnout. Less than practical workarounds can quickly lead to friction, which can impact the business as a whole.
7. The changing and growing requirements placed on HR
The needs and responsibilities of local HR are likely to be very different to what you need when you move your business to an international scale. In many organisations, that means HR steps up to board level, focusing on business strategy and policy. However, that doesn't mean that HR has the tools and means necessary to inform strategy and provide insight. If the basics of HR are not in place, it is virtually impossible for HR leaders to accurately inform business strategy.
There is also the challenge of a shift in focus, which will require either local hiring or a larger international HR team to account for the employee-focused services offered by international HR.
8. Uniting a culturally diverse workforce
One of the primary goals of HR in the early stages of expansion is creating a unified, global community that aligns with the ultimate values, ethos, and identity of their business. Sometimes, local labour laws or business practices that are locally acceptable can conflict with an organisation’s values and policies, creating a tug-of-war between social responsibility and the need to be successful in new markets. The challenge comes in overcoming these differences, and barriers with language, culture, and customs. To handle these challenges, HR will first need to fully understand them – whether that's through consulting, local research, or knowledge support from employees on the ground in each locality.
9. Keeping up with technology and innovations
Global HR technology is continually evolving, and adapting to suit the needs of employees and local requirements and laws. HR needs to keep up with the times and adapt as the business and employee needs evolve. Implementing new technology, digital payslips, and online HR data management for instance, can provide a huge benefit to the workforce, but can be a challenge to implement, especially across multiple locations.
10. Meeting the needs of a globalising or expanding business
Company globalisation means a great deal of work for every department involved in taking the organisation to an international level. HR is one area that experiences a significant impact as a business grows, and aligning HR processes across multiple locations is a challenge. HR must be more centralised and internationally aligned for it to keep up with business ambitions.
With a centralised multi-country HR service and platform, whether supported locally or on a purely central basis, it is far easier to keep up with demand for business growth.
SD Worx offers multi-country core HR made easy. Our SD Worx People solution is a modern, easily accessible, secure place to store all people data, and acts as a solid platform for all other HR processes. To learn more about SD Worx’s Core HR offering, or to book a demo, visit us online.