Top 5 HR Challenges International Companies Face

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. Companies that make decisions at the right organizational level and that have fewer reporting layers are more likely to deliver consistently on quality, velocity, and performance outcomes and thus outperform their industry peers. The pandemic has trained the spotlight on the power of fast decision making, as many organizations have had to move dramatically more quickly than they had originally envisioned.

Human resources departments have the challenge of setting uniform company policies and uniting culturally diverse people to form one employee community. Also, HR must must learn local laws affecting employment and keep the workplace safe from terrorism, natural disasters and health epidemics. HR must build a global employee community that’s in step with the parent company’s values and identity. To secure this alignment, companies often send their star performers abroad to head up financial divisions or sales teams. Philip Berry, a global management consultant, cautions multinational firms against overlooking nationals when filling key positions.

RESOURCES

Video calls provide the chance for employees to exchange non-verbal cues which can help build rapport. Providing the opportunity for ongoing training and skill development can increase employee retention. Legal compliance is an ongoing area of development as local laws can change from year to year whenever new legislation is passed. Lack of awareness or training can lead companies to violate regulations by accident—a financially and reputationally costly mistake. For example, a leader-led archetype is mainly shaped by the shift of empowering the leaders and the front line.

• Companies with top-quartile cultures (as measured by McKinsey’s Organizational Health Index) post a return to shareholders 60 percent higher than median companies and 200 percent higher than those in the bottom quartile.
• At the same time, it gives more flexibility to the needs of the individual (the “cafeteria approach”) because leaders have more freedom; it also builds on digital support so leaders are optimally equipped to play their HR role.
• Someone who already has experience managing international projects or traveling several times a year can easily transition into a new role at a multinational firm.
• Several countries, including Italy, Australia, The United Kingdom, Canada, and Indonesia, increased their international hiring rate since the start of the COVID-19 pandemic.
• 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).

For example, where inflexible and long work hours are the norm, introducing flexible scheduling may disrupt production and raise costs in the short-run. Lewis (2000) argues that organizational tensions and paradoxes may be used in two ways to develop insights into organizational phenomena and change. First, tension and paradox may be viewed from a structural perspective and understood as a characteristic of organizational structure that shapes organizational life. Second, tension and paradox may be viewed from an individual/agency perspective, as a social process through which individuals make sense of their organizational life. As Trethewey and Ashcraft (2004, p. 82) explain, “a tension-centered approach begins with the premise that organizations are conflicted sites of human activity” where conflicting demands shape corporate decision making and individual experience. Several recent studies have explored tensions in organizational life, by identifying tensions at both micro- and macro-levels (Ashcraft, 2000; Dallimore & Mickel, 2006).

Tensions in Global Work-Life Management

It’s no small task, but according to experts, HR professionals can not only tackle the challenge — they can make the cultural differences within their firms a major asset. We identified three practices—managers’ coaching, linking employee goals to business priorities, and differentiated compensation—that increase the chances that a performance-management system will positively affect employee performance. To enable this shift, HR should manage talent rigorously by building an analytics capability to mine data to hire, develop, and retain the best employees. HR business partners, who articulate these staffing needs to the executive management team, should consider themselves internal service providers that ensure high returns on human-capital investments.

Strategic/Policy Versus Operational

For example, to engage business leaders in a regular review of talent, they can develop semiautomated data dashboards that track the most important metrics for critical roles. This paper examines the extent to which human resource management (HRM) practices in multinational enterprises (MNEs) from a small, late developing and highly globalized economy resemble their counterparts from larger, early industrializing countries. The results demonstrate that there are significant differences between the HRM practices deployed in Irish-owned MNEs and that of their US counterparts but considerable similarity with UK firms. A key conclusion is that arguments in the literature regarding MNEs moving towards the adoption of global best practices, equating to the pursuance of an American model of HRM, were not obvious.

challenges HR faces in a global company

At the same time, it gives more flexibility to the needs of the individual (the “cafeteria approach”) because leaders have more freedom; it also builds on digital support so leaders are optimally equipped to play their HR role. Alternatively, an agile archetype is strongly focused on adapting agile principles in HR, but it typically also aims to move toward a productized HR service offering and strives for end-to-end accountability. These emerging operating models have been facilitated by eight innovation shifts, with each archetype typically based on one major innovation shift and supported by a few minor ones.

Human Resource Management in Multinational Enterprises: Evidence From a Late Industrializing Economy

It is a plan that managers can follow, implement, and customize to meet the needs of their organisation, division, and/or department. Although the results of future research cannot be known in advance, there are sound reasons, provided above, for pursuing these research questions and a tensions approach to global work-life initiatives. https://adprun.net/10-challenges-hr-faces-in-a-global-company/ 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 key to opposition strategies lies in an explicit recognition of tensions, and not necessarily an explicit resolution.

For example, the leader-led model puts business leaders, rather than HR, in the driver’s seat, allowing line managers to choose the right HR offerings for their individual teams. And for companies that decide to deploy machine-powered HR, the key is building and relying on deep analytics skills. The organizational context for MNEs is characterized by the constant need to respond to global competition and technological innovations which often generate pressure on employees in terms of the patterns and demands of work. At the same time, the contextual and institutional environment in which employees live has undergone dramatic changes in the recent decades (Hein, 2005).