Is your business riding the ‘third wave’ of globalisation?
Did you know that we are living in the third wave of globalisation? The first was driven by the industrial revolution; the second, post Second World War, brought us the World Bank, MacDonald’s and Coca-Cola. Now the third, driven by the birth of the internet, has allowed even micro businesses to spread their reach, making national boundaries insignificant.
The number of transnational corporations has tripled over the past two decades. In fact, this business model – a central global strategy with operations in multiple countries – now generates a full 25% of global GDP.
With this continued globalisation shift, Human Capital Management is coming into sharp focus. Unsurprisingly, companies are turning to technology to conduct business between any two points on the globe. The digital revolution has seen global companies move top talent around the world more frequently, often overseeing short-term, strategic projects. These brief assignments last months rather than years, reducing the need for traditional relocation packages.
HR needs to support flexibility
This sounds easier, right? But in fact, it’s causing a massive HR headache. Employers suddenly have to become great at tracking and monitoring such moves, not to mention calculating local tax requirements. Imagine if your company decided to acquire a competitor in South Korea with a workforce of 10,000, who all need to be onboarded and on payroll in two weeks?
Being able to manage that successfully depends on having global HCM solutions in place that help to increase employee engagement, improve overall productivity, and manage across international borders. As companies become more global, these HR challenges become central to success or failure.
Managing broken processes on a global scale
And yet we still see organizations struggling on with broken processes, multiple systems (or even multiple vendors) that require endless consolidation. Multi-country payroll suffers greatly here, with global firms managing an average of over 33 payroll systems at once. Not only does this increase costs and run into legal compliance issues, but it also annoys staff and causes them to leave. And as for the over-worked HR professionals given the impossible task of managing it all, most of their time is taken up with the admin rather than providing the strategic insight that their executive team also demands. They barely have any time to support the business at a local level, let alone manage talent on a global scale.
It is vital that global HR and its leaders win back that lost time to focus on the factors that they really need to deal with.
All moving parts need to be integrated
Recruitment Process Outsourcing (RPO) can free up time, achieve overall cost savings of around 43%, improve compliance by 34% and provide greater talent flexibility. As an effective multi-country solution it can address platform compatibility, integrate data, centralize information on mobile dashboards, and provide valuable insight on talent and support. Growing global companies must integrate and streamline all their moving parts – or continued expansion becomes unsustainable.
To achieve this requires a network of in-country HR specialists with deep knowledge of local legislation and HR details. In reality, that requires investment outside of any organization’s core business.
Having a partner to support growth
In order to thrive as you expand across borders, your organisation needs flexible and robust workforce administration and talent management processes in place – from recruitment and performance management to global payroll and HR administration. And this begins with the right technology partner.
There are, quite a few global HR solutions on the market that enable cloud-based management of recruitment, performance, development, and HR administration. The missing piece is invariably global payroll.
The global talent pool now has bigger demands and higher expectations, so attracting, aligning, retaining and developing this new global workforce is both a matter of becoming a brand of choice for potential employees and keeping your existing employees engaged.
Globalisation may pose its own set of challenges. But those companies who are able to employ the right HR strategies and technologies will truly ride the wave of global expansion. Don’t you think?
If you would like more insights on globalization and its impact on HR read the latest ADP report “Globalization of HR and How Digital Transformation can Help”.