What Is Global Human Resource Management? Challenges And Best Practices

The world of work has changed significantly in recent years as technology has helped globalize workforces. For us in HR, this brings a new set of opportunities and challenges to navigate.

Here I’ll cover how HR professionals can ensure the strategies they bring to the table for dealing with a global workforce are the right ones for the business.

What Is Global Human Resource Management?

At its most basic, global human resource management (Global HRM) is the strategic approach to managing human capital across international boundaries.

It involves coordinating and aligning HR practices, policies, and procedures to support organizational objectives on a global scale.

This encompasses the standard suite of HR activities—recruitment, onboarding, performance management, employee relations, etc—but with an emphasis on addressing the unique challenges and opportunities presented by operating in diverse cultural, legal, and economic environments around the world.

Key Components Of Global HRM

Key aspects of global HRM include:

• International recruitment and selection: Identifying and attracting talent from different countries while considering extra factors such as language skills, cultural fit, and legal requirements.
• Cross-cultural training and development: Providing training and development programs to help employees understand and adapt to the cultural nuances of working in a global context, fostering effective communication and collaboration across diverse teams.
• Compensation and benefits: Developing compensation and benefits packages that are competitive and equitable across various countries and comply with local laws and customs.
• Global performance management: Establishing performance evaluation systems that are standardized yet flexible enough to accommodate cultural differences and varying business practices across regions.
• Employee relations and compliance: Ensuring compliance with labor laws and regulations in different territories while addressing employee grievances and fostering a positive work environment across locations.
• Global mobility programs: Facilitating international assignments, expatriate management, and repatriation processes to support talent development and knowledge transfer across borders.
• Managing diversity and inclusion: Promoting diversity and inclusion initiatives to create an inclusive workplace culture that values and leverages the contributions of individuals from different backgrounds and perspectives.

Global HRM Challenges

Global HRM faces several challenges due to the complexities of operating across international boundaries. Some of the key challenges include:

Cultural and communication differences

Managing cultural and communication differences in a global company presents challenges such as misunderstandings due to language barriers, varying communication styles, and differing cultural norms. 

People from diverse backgrounds may interpret messages, feedback, or instructions differently, which can lead to misalignment and inefficiency.

Additionally, differing attitudes toward hierarchy, time management, and decision-making processes can create friction within teams.

Therefore, as an HR team, it’s critical that you evaluate the scale and type of support the business needs in this area so that you can offer the appropriate training and guidance to ensure communication and cultural differences do not become an issue.

Legal and regulatory compliance

Adhering to varying labor laws, regulations, and employment practices in different countries can be complex and requires careful attention to ensure compliance.

When a workforce is in the same location and on the same type of work contract, making large organizational decisions is generally easier. Senior leadership will be familiar with what can and can’t be done regarding day-to-day employee relations and larger structural changes. 

In theory, this means managing change or day-to-day operations should be relatively easy for HR teams.

However, when your teams are geographically dispersed, managing changes and communication becomes more complex.

For example, if you have a team split between different countries and you need to reduce headcount, your HR team needs to be able to coordinate the business needs alongside the legal requirements in each of those jurisdictions.

That’s complex and, as you build and design your organization, you need the skills to support these activities.

The same goes for the day-to-day workforce management. If your managers have direct reports in different countries, you need to support them to ensure they follow process around differing legislation and ways of working.

Things to consider here include different holidays, rights to switch off, probation, and employee relations issues.

So, in these situations, you need to be clear on the most common problem(s) you need to solve, ensure your team is built effectively to support them, and that the right training, coaching, and support are offered to your managers.

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Talent acquisition and retention

Attracting and retaining top talent in competitive global markets requires understanding local labor markets, adapting recruitment strategies, and offering competitive compensation and benefits packages.

As I’ll go into, it’s important to assess how your organization is structured internationally to ensure that your talent acquisition team(s) can deliver success.

Global mobility management

Managing international assignments, expatriate assignments, and repatriation processes requires careful planning and support to ensure the success and well-being of people and their families. Again, the most important thing here is assessing your organization. 

Technology and infrastructure

Differences in technology infrastructure and access to resources across regions can impact the effectiveness of HRM processes such as online training, performance management systems, and communication tools.

Effective global HRM practices can help organizations leverage their diverse workforce as a source of competitive advantage and drive sustainable growth in an increasingly interconnected world.

9 Strategies To Ensure Effective Global HR Management

From my experience, here’s how HR professionals can help organizations overcome the challenges associated with global HRM.

1. Determine your organizational structure

Determining your global org structure is vital because it has a significant impact on how you approach cultural differences, recruitment, compensation, etc. There are roughly three approaches to this:

The “Head Office” model

A big head office that “imposes” the company culture across the group’s satellite offices. HR’s role here is adapting to that way of working and ensuring communication is adjusted to a global tone and that the culture is properly explained.

The “Regionalized” model

Many companies have big regional areas with their own cultures and day to day, so there can be a relatively homogeneous culture in each office or region and the broader global role is about managing the communication between them.

The “Integrated” model

Alternatively, some organizations have people mixed together across geographies, which is where cultural differences can have a big impact on teams and communications, especially within those companies that have highly remote or distributed teams.

I’ve broken down some key considerations for each model in the table below:

Model	Comms	Legal	Recruitment & Retention	Mobility	Tech
Head Office	Ensure messages from the head office are relevant and adapted to fit different audiences.	Be careful that global initiatives fit into the local landscape.   Empower key central HR teams for change programs.	Local, well-empowered HR/Recruitment teams to reflect local requirements well and support managers.	Can be a critical success factor in developing people and driving culture.	Get what suits the head office and run the risk of the tools not working as well in smaller regions or multiple systems.
Regionalized	Ensure key comms are well understood and communicated to the right people at the right time.	Coordinating between local and global is a challenge here.   Localized HR teams can operate with some autonomy.	Local, well-empowered HR/Recruitment teams to reflect local requirements well and support managers.	Less relevant but can be a nice-to-have to support and develop key staff.	Can have best-of-breed solutions and centralize data (this needs to be carefully thought through).
Integrated	Critical focus on training and tools.	Needs careful planning as can become complex.  Careful oversight required to ensure compliance.	More skill-focused recruiters.  Responsibility for local compliance should sit with central teams.	Generally less relevant if you can support multiple locations with flexible payroll solutions.	Go global, get flexible systems that fit your needs and a flexible mobile workforce.

2. Adapt your communication strategy

Communication is one of the biggest challenges of working in a global environment.

Different languages and ways of working mean creating a single working culture is hard (some might say impossible).

Managing this communication on a global level is critical, and I strongly advise using your company type to determine how communication should be approached.

• Head office: Sets the tone of voice and the communication strategy, but satellite offices should have a voice and flag if they receive too much or too little communication.
• Regionalized: With various power groups across the globe—each with its own specialty and purpose—it’s appropriate to let those regions lead their communication, set the agenda, and influence culture.
• Integrated: Here you need to rely on a mix of central communication and local managers to integrate their teams and use the most appropriate communication style to reflect their teams' needs.

3. Adapt talent acquisition to suit your model

If you have large groups of the same skill set in particular geographies e.g. manufacturing in X, customer support in Y, then you can easily calibrate your talent acquisition to replicate this.

You can have a regional presence, coupled with recruitment specialization in the same teams, ensuring a well-empowered strategic talent acquisition (TA) function.

If your model is Integrated e.g. you will hire the talent where you find it, then you will need to lean towards your TA team either being skill-aligned and having knowledge about all the geographical challenges, or you build regional TA teams who need to support a range of differing skill sets.  

I think it makes more sense to lean towards building the team to deal with whichever of those (recruiting the skills or the geographic complexities) is hardest for your business.

You’ll also need someone responsible for getting your EVP, benefits packages, and job offers correct in each region.

If you have a Head Office or Regionalised model, TA is a great home for this. However, if you’re more integrated, it probably makes more sense for that responsibility to sit elsewhere or as a specialism within the TA team.

4. Setting global vs localized benefits

Compensation and benefits are very localized and each country has different regulations regarding benefits such as pensions, parental leaves, healthcare, etc. 

Therefore, offering a consistent global package is challenging and you can easily end up offering the “high water” mark for everything which is neither effective nor efficient.

So, in terms of benefits, I highly recommend looking at certain benefits that can be global:

• Wellbeing allowances
• Holiday allowances
• Hardware provision
• Life assurance
• Minimum standard for healthcare and parental leaves.

Agreeing this globally allows local teams to have flexibility in building competitive packages that still have a local flavor.

A great example of this is the United States, where healthcare provision is a critical part of benefits infrastructure, versus many countries that offer high-quality universal healthcare.

5. Decide how you’ll employ and compensate roles in different countries

For determining salary and compensation, one of the critical things to agree on is how you compare the same role in different countries.

You can 1) Choose to ignore differences between countries and pay what you feel the role is worth to you or 2) Localize using benchmarking.

If you have the resources available to benchmark every role locally that’s excellent. However, if you’re very distributed or do not possess that level of resource, I recommend using a tool that helps you to compare different countries based on a cost of living index.

Even something pretty basic can give HR, TA, and managers a rough guide to bring in some objective data to the discussion.

Here’s a process I’ve used before that works for getting a basic benchmark anywhere in the world for a role you have already benchmarked in one country.

Let’s say you have your main engineering hub in the United Kingdom and there you pay the following:

• Head of Engineering - £120000 to £170000
• Lead Engineer - £80000 to £110000
• Software engineer - £50000 to £80000

1. Take a country’s cost of living from the International Cost of Living Calculator.
2. Create 3 tiers of countries (you can have as many of you like) and adjust salaries
   1. Tier 1 = 100%, Tier 2 = 80% and Tier 3 = 60%. You can adjust this according to your requirements.
   2. I’ve given a 5% uplift to nonpermanent but you can shift this.
3. Use the Google Sheet below to automate the calculation in real-time with the latest FX rates (I’ve only included USD, EUR, and GBP but adding more currencies is easy).
4. Instructions for using the sheet:
   1. Add high and low benchmarks as annual salary amounts in B3 and B4
   2. Add country tier (1 2 or 3 in this example) in B5
   3. Choose in B7, B9, and B10 the type of employment you want a calculation for, the currency, and whether you want to see it monthly or annually
   4. The calculation appears in B12 and B13.

Tool can be accessed here (make a copy for editing).

In our example, if you wanted to recruit an Engineer in Kenya on a monthly freelance basis that would give you a rough guide of $3443 to $5508/month.

This tool doesn’t account for local factors other than the cost of living, but it’s an easy way of bringing some basic objective data into the conversation.

You also need to decide how people are employed. The traditional model is employing people either permanently or on a contract basis using an entity in that location. In the main, the head office or regionalized method suits this traditional approach.

The Integrated workforce makes that traditional model more complex, so if you’re really prepared to hire people anywhere in the world then you’ll need support.

Recently, we’ve seen a rise in employer of record (EOR) services which help you to employ and pay people on a permanent basis in a country where you have no legal entity.

If you want to employ people on a contract basis, you still need contracts and payment facilities in these countries, so getting suppliers to manage EOR/contract payroll services can be a critical success factor.

6. Carefully manage expat assignments and international mobility

Clearly, offering flexibility about where people can live and work is a great benefit, promoting employee engagement and boosting recruitment and retention of staff.  

Expat assignments and relocations are a fantastic way to facilitate global knowledge transfer, leadership development, and strengthen international business relationships.

That said, they can become eye-wateringly expensive and are complex to run—requiring reward, legal, and taxation skill sets.

As such, a key factor of success for many organizations is deciding how much money you want to spend on these.

At the same time, you will also have to manage individual requests for people who want to relocate.

If you have a Head Office or Regionalised model then expat assignments are an excellent career development model and you’ll need specialist skills in your team.

If you lean towards the Integrated model, ensure you have an employer of record and flexible payroll solution on hand so you can outsource the legal complexities to them and get your new starters onboarded quickly and effectively.

7. Adopt the right technology

There are many key elements of your HR tech stack that you need to think slightly differently about when operating globally:

• HRIS: Many of these are too localized or overly complex. Be aware of an HRIS that only cater to one country and look for something that you can customize and helps you cover all locations compliantly.
• Applicant tracking system/careers site: You need a recruiting and attraction tool that works for the geographies and the scale you need—think languages, display, and volume.
• Payroll: I refer back to your payroll provider of choice earlier and making sure you have the right tools here to ensure people get paid on time and efficiently is critically important. How globalized do you want to be? Payroll is a critical part of the infrastructure and technology has improved in this area enormously over the last few years.
• Communication tools: This includes an intranet for sharing policies, documentation, self-service, and tools for instant messaging to speed up collaboration and communication across the business. Again I can’t stress enough how important it is to get this right.

Choosing the right HR software in an international setting requires strategic planning, cross-functional collaboration, and continuous adaptation to the evolving global business environment.

8. Document everything 

Setting up a global HR function is complex. We sit in a matrix of global business objectives paired with regional compliance, legal, and cultural influences.

Regardless of the approach you take, remember that no one can be an expert in everything but they do need easy access to the information they need.

It's critical to document everything and put it somewhere accessible to enable the HR team, managers, and workers to quickly find the information they require. 

This provides a better employee experience and saves time and money avoiding answering repetitive questions. Some tips here:

• Document your processes using a tool like draw.io or Slite.
• Save your processes, policies, and anything pertinent on your intranet and ensure they’re sorted by role and or location to enable ease of use for users
• Look at exploring AI tools to allow access to processes and policies with intelligence AI search.

9. Get clear on compliance responsibilities

Each geography needs to have someone responsible for ensuring you’re compliant with local regulations.

You also need someone responsible for checking alignment with key global regulations like data protection. A checklist here:

• Ensure you have each jurisdiction covered within your team.
• Ensure you have access to local legal support in each geography.
• Use online resources like Xpert HR, Rocket Lawyer, or even Chat GPT for templated resources like process maps and legal templates for organizational policies. It’s much easier and quicker to adapt things than to write them from scratch.
• Subscribe to newsletters and podcasts and attend HR conferences, they’re always full of compliance info and regulatory changes
• Have an HR compliance process that helps you to decide what needs changing to adapt to a regulatory change.

It Starts With Self-Awareness

To conclude, what’s most important regarding your global HR strategy is determining what type of organization you are and taking it from there. You’ll end up with more synergy and better solutions.

My experience has been with a range of these models and I wish I’d discovered something like this earlier in my career—it would have made life easier!

Good luck and feel free to reach out if you have any questions about anything global HR management-related.

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