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HR Challenges of International Business

What are the main HR challenges of international business?

Organisations with global operations face complex and relentless personnel issues.

From increased legal risk exposure across borders to dealing with a worldwide scarcity of talent, the HR challenges of international business must be overcome to maintain advantage at scale through a high performing, mobile workforce.

Legal risks

The legal and regulatory environment presents challenges for any business, but where the organisation is active in multiple jurisdictions, the threats necessarily multiply.

All areas of law relating to the management of a multinational workforce must be considered against the backdrop of relevant local laws. HR departments within global organisations are under an imperative to continually and proactively review the legal environment and the obligations placed on their organisation to identify potential risks of non-compliance.

Immigration compliance, employees’ working rights and entitlements, tax and remuneration, in particular, all require organisational policies and procedures to be aligned to and in full compliance with the rules of the specific jurisdictions concerned.

Furthermore, the ever-changing political landscape, in particular, Brexit, have brought significant uncertainty and anticipated legislative change within the UK that will impact on a global scale.

While wholesale reform of UK employment legislation is not expected as a result of Brexit, the UK Government may take advantage of the circumstances to put through some changes, potentially in areas such as working time regulations and TUPE.

Employers should, therefore, be on standby to respond to new or amended employment laws affecting employee rights and employer obligations.

Scarcity of talent

A lack of talent remains a challenge for HR.

In developed nations, lower-skilled roles can be difficult to fill from within the domestic labour market. Highly skilled roles are typically difficult to fill due to a shortage of requisite skills, particularly in emerging fields such as tech. International recruitment has, as a result, become critical to meeting talent needs.

Hiring migrant workers, however, brings substantial compliance challenges which again will be determined by the rules of the local jurisdiction and in many cases, the circumstances of the worker. Governments globally are showing increasing vigilance against employers failing to comply with immigration compliance, with enforcement powers often including substantial fines.

Deploying employees on overseas assignment remains an option of choice where employers require specific technical skills and organisational knowledge, or as part of global leadership development programmes. Across the global mobility assignment portfolio, from relocations, short-term or long-term assignments to frequent business travel, cost control remains a key driver, and the need to ensure international assignments are both cost-effective and commercially viable.

To retain talent and maximise return on their global mobility investment, employers also need to consider more creative ways of encouraging returning assignees to remain within their organisation at the end of the assignment lifecycle.

Through this period of change, employers should be open to new approaches to recruiting and retaining talent. This impacts fundamentals such as competitive compensation and relocation packages, career development and progression programmes and overall investment in the employer brand and employee engagement.

Technology & data advancements

Traditionally the focus of HR has been on people. But modern demands and capabilities in workforce planning, management, development and engagement are increasingly reliant on technical solutions, or organisations risk being left behind.

HR departments have an ongoing responsibility to understand emerging technologies that offer operational advantages. Global mobility software is enabling real-time traveller tracking, capturing data relating to tax and expenses and enabling instant communication and contact with overseas employees investment. Automated systems offer greater efficiencies of HR processes and connectivity across networks and functions. Employee engagement and communication channels have never been so vast in choice and capability.

The effective use of data and analytics are driving workplace cultural shifts and performance transformations, aligned to business goals and needs. Data competencies are fast becoming critical within the HR function. Measuring and monitoring workforce performance and behaviours support informed decision-making and allow for investment to be placed in areas that will deliver improvements, return and strategic value.

The potential is for HR to optimise tech solutions to deliver on the transactional demands of managing a global workforce in a compliant and cost-effective way while allowing the HR function to focus on areas of strategic importance and value.

HR challenges of international business

Given the current global upheaval in political, economic and technological terms, international HR teams are facing an overwhelming array of challenges. This includes staying up to date with legal changes and technological advancements, aligning global mobility policies to evolving business needs, and developing and managing the organisation’s present and future global talent pool with commercially viable incentives.

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