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4 min read

The 4 steps for a successful global HR strategy

The 4 steps for a successful global HR strategy

We’re going over four global HR strategy best practices that will help you prevent all of these potential struggles of a global workforce. 

As remote work has become a standard for many companies worldwide, HR practices have also extended their reach to the global talent market. It’s now normal for the recruitment and interviewing process to be held entirely online and organizations are starting to see the hands-on benefits of working with a global team.

But with a global workforce come all the challenges and compliance issues that currently chaotic international work legislation poses. Companies are still required to open a local branch and bank account in the countries where they want to hire. Not to mention that bringing in people from multiple areas can lead to culture clashes.

Next, we’re going over four global HR strategy best practices that will help you prevent all of these potential struggles of a global workforce. 

Leveling HR playfields on a global scale

One of the largest problems managers bumped into as they started to hire globally was ensuring fair conditions and rewards for all team members, regardless of their nationality. Remote work is expected to continue its steady growth towards normalization in the future. This will naturally place leaders face-to-face with providing equal opportunities to employees.

With the current approach, most companies are paying workers based on their location. There’s also a visible discrepancy between people hired in the employer’s country and those working as contractors. The former get full statutory benefits and health/pension coverage while the latter have to take care of all taxes themselves.

However, talent mobility and the rising digital nomad trend are posing more questions related to the fairness of having significant differences between the wages of people from two different parts of the world. The general belief is that these break the harmony of a team and demotivate people who are working on the same tasks but receive a lower payment than their counterparts from another country. Leveling benefits, policies, and even salaries seems to be the best approach for any global human resources strategy but the legislation of most countries is still making it difficult for companies to adapt. As they can’t offer the same rewards and benefits schemes, they’re faced with having to find alternatives to ensuring fair treatment to all of their employees.

Ensuring compliance with local laws

Every country has its particularities when it comes to how an individual can work, what benefits they’re entitled to, and other quirks related to payments, leave days, and more. Some common issues that depend on local laws include:

  • Individuals not having a work permit to work in your country.
  • Facing employee misclassification risks. [Particularly as some countries have stricter self-employment.]
  • Having to offer different bank holidays for every person on your team.
  • Income tax differences will inevitably cause net salary variance.
  • Problems related to paying employees in a specific currency and losing money during currency exchange or due to extra bank fees.
  • Significantly different laws when it comes to pregnancy and maternity leave with paid leave anywhere between eight weeks and two years.
  • Particularities of the employment termination process with severance pay and notice periods are dependent on every country.
  • Handling legal issues across borders in case of a contract breach.

Understanding leadership differences

The approach to managing human resources in international business differs due to the various leadership styles. In Germany, for example, managers tend to stay humble and distribute attention evenly across all organization members, regardless of hierarchy. This leadership stance is similar across Europe with countries like France displaying the same style. 

On the other end, U.S. managers opt for an individualistic leadership style. This allows every team member to strive for top performance and come up with new ideas and strategies that can differentiate them from the crowd. These individualistic managers have it easier when it comes to getting to understand every person on the team, finding out their struggles, and catering to everyone’s needs.

However mixing leadership styles can have negative consequences on how employees get along and perform. The best way to approach a global HR strategic plan is to get to know every person you hire and understand their demands before you involve them in a project. 

One-on-one meetings, surveys, and polls are efficient methods of getting into the details of what a person commonly struggles with and what their preferred style of work is. You can then instruct your leaders to adapt their leadership style to every individual or hire people who are a better fit for your culture.

Growing your reach beyond the borders

A successful global HR strategy involves an organization’s faceted abilities to penetrate the market in all target countries. This applies in relation to both customers and employees. But often we’re caught up with finding out what a nation’s buyers want and how we can get them to purchase our products. So we forget about the number one success driver: our people.

With 95% of the world’s consumers living outside of the U.S, businesses can only grow by establishing a global team to help them:

  • Understand buyer mentalities and demands
  • Stop and prevent risks
  • Come up with new strategies tailored to the market’s own particularities
  • Maintain long-term investments and partnerships
  • Stay available for sales and customer support in several time zones
  • Keep team members from multiple countries aligned without obstructing their individuality

Clarifying talent diversity planning is your next go-to step to transforming your business and setting up a successful global HR strategy. 

Article By
HRIS and Remote Tech Specialist
Charlotte speaks with authority as RemotePad’s recruitment and HR tech maestro. With a background in marketing, Charlotte has worked for major brands in the industry, including leading HR software provider, FactorialHR. Originally from Manchester, UK, with a bachelor’s degree from the Manchester Metropolitan University, Charlotte currently resides in sunny Barcelona, Spain.