We are living and working in a global economy. Working in human resources, we are not only faced with navigating the employment law changes and economic shifts in the United States, but also in the locations where our global talent resides – both virtually and in global offices. Global talent management is integral to any company doing business outside of the U.S., from HR policies to hiring and regulations based on the laws of the country in which we’re operating.
In human resources, global talent management refers to the use of HR actions to ensure access to needed talent by multinational enterprises competing in a global environment. It includes HR policies and practices related to planning and forecasting, as well as obtaining, selecting, motivating, developing, evaluating, retaining, and exiting employees consistent with a firm’s strategic direction. This is done while considering the evolving concerns of the workforce and regulatory requirements.
Each country not only has different employment laws, but different customs, cultural nuances, and business laws. For example, in China, your company offices must be owned and established by a citizen of the country. In most cases with other countries, you must have established relationships with banks and other entities in order to process payroll and compensate your employees.
There are eight key global talent challenges you’ll want to consider when it comes to global talent management:
- Organizational linkages
- Location planning and management
- Attraction and selection
- Training and development
- Performance assessment
- Retention, cutbacks, and reduction
- Cultural expectations
Global talent challenge #1: Organizational linkages
Talent management actions can only result in a global competitive advantage if they are linked to the actions and strategies of the organization. When considering a location outside of the U.S., it’s important to have an idea of how that location’s employees will communicate with your company’s headquarters and other locations. Will travel be required? Will a shift in alignment be necessary due to time zone differences? What virtual training and communication channels are available?
Even when you’re operating within the U.S. with remote employees in other areas, the same considerations apply to communications strategies.
Global talent challenge #2: Location planning and management
Multinational firms considering expanding or relocating operations confront challenges related to location planning and management. These may include assessments of the location and employer legislation in that country, timeframe, outsourcing, cultural changes, as well as traditional HR planning, forecasting, and talent marketplace analyses.
Global talent challenge #3: Attraction and selection
Each country has its own laws governing advertising and marketing, with regulatory requirements extending to traditional recruitment marketing and online advertising. When attracting overseas talent, a global employer must ensure its advertising complies with all local and national laws. The must also be aware of issues such as required disclosures, intellectual property rights, and user privacy protections. For example: the GDPR in the EU.
You’ll want to carefully consider how to structure the interview process, especially when it involves scheduling across time zones or making travel or reimbursement arrangements for candidates requiring in-person interviews or on-site meetings. It’s also important to understand any customs or interviewing practices in any particular country, which can vary greatly. You’ll also want to consider any language requirements involved in the interviewing process, which might require the involvement of an interpreter or intermediary.
One important note about attraction and selection – each country’s laws and employment norms are very different. For example, in India the expected notice time to give is 30 – 90 days, which makes recruiting, onboarding, training, and planning for new talent a challenge. You can’t simply launch a business in a new country and expect to be established and running in a week or even 45 days.
Global talent challenge #4: Training and development
In locations where competencies fall short of what your company may require, training and development programs can be used to improve the quality of talent available. This can be done while increasing your company’s appeal as an employer. In many countries, the opportunities to learn new skills and have access to advanced education is a high appeal factor for candidates. The promise of professional development is especially attractive to passive candidates currently employed by a company that may not offer the same development opportunities as yours.
Global talent challenge #5: Performance assessment
When it comes to rating and offering feedback on productivity and performance, many global companies have already set a precedent. The key element in all of them is the use of technology for training, as well as a globally standardized feedback loop for employees.
For example, all of Facebook’s 12,000 global employees have access to internal proprietary software that allows teams to be on the same page. Managers are trained to avoid micromanagement, and are instead directed to stay up-to-date with how projects are progressing, offer real-time feedback, and provide any necessary assistance. Through a single platform, coworkers can give each other ad hoc feedback and are encouraged to use the designated “thanks” section to express gratitude to colleagues.
Using software that allows a constant feedback loop can be helpful across cultures, as the “formal review” process we’re so accustomed to in the U.S. (i.e., sitting down with your manager on a bi-annual or annual basis to review goals and accomplishments in order to receive a pay raise or promotion), is gradually falling out of favor. In today’s talent marketplace, we’re moving much too quickly to wait a year to offer valuable feedback on performance. Instead, organizations are adopting real-time input channels to provide relevant feedback.
Global talent challenge #6: Compensation
According to a SHRM report “When Should Pay Go Global?”, companies with multinational operations need to develop compensation plans for employees that are in line with their global business strategy. Companies that articulate a clear global pay philosophy developing corresponding compensation programs, are best positioned to effectively execute that strategy.
An effective global compensation strategy creates consistency in pay management and facilitates global employee mobility. Establishing guidelines and practices with consistent communication of key messages is vital to the success of the compensation program.
Although multinational employers are striving to globalize their compensation practices, local and regional approaches to international pay are still most common. While the talent marketplace in some countries isn’t as competitive as it is here in the U.S., past performance isn’t necessarily predictive of future behavior. For example, in 2008, demands for compensation increases by workers in China caused some multinationals to move and/or consider moving operations to Vietnam and Bangladesh. This was in addition to keeping some of their operations in China, producing what is often referred to as “China plus one strategy.” It’s important to stay tapped into the culture of the countries in which you are operating when assessing compensation packages.
Global talent challenge #7: Retention, cost-cutting, and reduction
Retaining talent is one of the biggest talent management challenges for global firms. A high percentage of employees worldwide (23 percent in the United States alone) plan to leave their current positions next year. A study by AchieveGlobal, a business skills training firm based in Canada, found that population shifts are having significant effects on talent retention.
In Europe, vacancies are multiplying due to low birth and immigration rates, resulting in a deficit of younger workers. In China, the one-child policy that lasted from 1979-2015, has led to an employee deficit – ts aging workforce is stretched even tighter over its expanding markets. There are retention challenges specific to each country that should be taken into consideration before developing a strategy for employee engagement in each location.
Workforce cutbacks can involve the reduction of work hours, days, overtime, pay levels, pay increases, benefits, new hires and holidays. It can also result in the increased use of attrition, unpaid leave, assignment for local volunteer work, sabbaticals, and contract employees and outsourcing. In contrast, workforce reduction refers to the use of layoffs or other measures that result in permanent job loss. For multinationals, decisions about which HR actions to use must reflect the concerns of local unions, governmental regulations, cultural norms and corporate values.
Global talent challenge #8: Cultural expectations
Knowing how to conduct business in the local market in which you will be hiring is extremely important in relation to the seven previous areas I’ve mentioned. Cultural differences impact communication and retention strategies, attraction, compensation, training and development, and your overall recruiting strategy. You must be willing to invest significant time and energy with regards to culture in order to pursue an overseas venture.
Cultural awareness is important to more than just face-to-face meetings. When working virtually with people from other cultures, it is critical to closely observe how they are communicating, because that is the style they prefer for communication overall. For example, if someone from another culture sends a long, formal email, it could be construed as disrespectful to reply back casually without the same formality.
What’s crucial in all of these areas is to educate yourself on the nuances of operating in a global marketplace. This can be accomplished by working with a consultant or an attorney who is familiar with establishing and setting up businesses in new countries.
Jessica Miller-Merrell is a workplace change agent and author focused on human resources and talent acquisition. She lives in Austin, TX and is recognized by Forbes as a top 50 social media influencer. She’s the founder of Workology.