Even if you’re the kind of leader who loves budgeting and strategy, annual planning for human resources can be challenging. The Covid-19 pandemic has only exacerbated the issue, with global labor shortages and increased stress on team members. It’s important to remember that each challenge represents a significant opportunity to improve your company. A thorough HR business plan will help your company manage international employees through whatever comes next.
Why does your company need a global HR strategy?
Effective HR management is crucial for any company; however, HR can become more complicated when companies have an international presence. A global HR strategy can help companies comply with employment contracts and payroll requirements aborad.
An international HR business plan can help your company in several key areas:
- Staff recruitment, hiring, and training: International growth can help expand your talent pool and market opportunities. Research standard recruitment methods and familiarize yourself with global labor markets before growing to a new country. Because of international skills shortages, training is especially crucial. Global team members may also have different skills and educational backgrounds. Training will ensure all team members are up to your company’s standards.
- Regulation compliance: Global regulations like local and national legislation, Collective Bargaining Agreements (CBAs), and industry policies govern a company’s relationship with employees. Each country has its own standards and requirements for regular working hours, required breaks, vacation leave, benefits, and privacy regulations. Outsourcing legal services can help your company stay compliant across the globe.
- Payroll: You’ll need to hire employees through an established business entity in your country of choice. Many companies outsource payroll to a global Employer of Record. An Employer of Record can help you manage different international currencies and payroll laws. For example, Paye As You Earn (PAYE) systems require companies to withhold specific tax amounts to return to government programs.
- Compensation and benefits: As with labor laws and payroll, each country has unique standards for compensation and benefits. Conduct research before growing globally to ensure you’re compensating employees enough to offset the cost of living. International team members may also expect certain benefits, like paid time off, even though they might not be legally required. You’ll need to follow market standards to compete with other companies.
- Cultural differences:Cultural competence is crucial in global workplaces. Different cultures come with new workplace norms, and a global HR strategy can help you build empathy to make team members feel valued.
What global HR trends could impact 2022?
The pandemic has transformed the workplace. For example, many companies have expanded their capacity for onboarding and managing remote employees, optimized their workforce with automation, or increased HR support. The top global HR trends for 2022 include prioritizing team members, addressing skills gaps, and ensuring employees have modern technological resources.
1. Lead with empathy
The pandemic has led to unexpected changes in the workplace and in employees’ personal lives. It’s essential to center empathy when creating an HR business plan. One of the most effective ways to lead with empathy is to diversify leadership to reduce bias and build a workplace founded on cultural competence.
You can take the following measures to adopt a company culture of empathy:
- Prioritizing team members over tasks: Employees are the backbone of any company. Demonstrate you value your team members by prioritizing their health, safety, and happiness. When you ensure your team members are satisfied in their positions, you’re investing in your company. A study from the University of Oxford found that happier employees are more productive.
- Adopting a growth mindset: A growth mindset focuses on improving skills over time. A company culture that encourages a growth mindset will expand team members’ skills, ultimately increasing the capacity of your current workforce. Growth mindsets contrast to fixed mindsets, in which talents are assumed to be inherent and static. Adopting and promoting a growth mindset will increase productivity and encourage employees to continue learning.
- Providing cultural sensitivity training: Understanding and appreciating cultural differences in the workplace is especially important for companies with an international presence. Diversity is a strength. Therefore, you should consider cultural differences as opportunities. Instead of making assumptions about a team member’s culture, provide cross-cultural training to help your team understand different customs and communication styles.
2. Bridge the skills gap
Companies worldwide are experiencing skills gaps. Because Covid-19 forced many companies to switch to remote work, today’s teams value flexibility, preferring to choose when and how they work. Many people are now pivoting to different career paths in what is referred to as the Great Resignation. In August 2021, a record 4.3 million employees in the U.S. resigned from their jobs, and the trend has spread to the rest of the world.
The Great Resignation has made finding a way to reskill your workforce an instrumental part of any HR business plan. According to a study from McKinsey, 87 percent of global companies are aware they have a skills gap, and the issue will only increase in 2022. Complicating matters, global e-commerce sales increased during the pandemic as consumers practiced social distancing. With the added stress of increased customer demand and labor shortages, companies are searching for ways to bridge the skills gap.
Workplace analytics can help when identifying areas to bridge the skills gap. Rather than searching for the best team members for particular job positions, focus on how data can help you evaluate where there may be skills gaps in your workforce.
Analyze both soft and hard data to get a complete picture of a team member’s career trajectory. You can also hold conversations with your teams to gain valuable insights into areas for improvement. Additionally, regularly checking in with employees will provide them with an opportunity to voice concerns about wellness and make them feel like a valued part of your team.
3. Innovate with technology
The pandemic has contributed to global labor shortages, leaving employers scrambling to find the workforce they need. With retirements, border and immigration restrictions, and a demand for increased flexibility and better pay, 2022 may only exacerbate the labor shortage. Optimizing processes with automation can solve the labor dilemma while also cutting costs.
For example, many companies now use robots to clean floors, freeing up labor to complete more valuable tasks. And automation continues to evolve. Business automation software streamlines processes ranging from inventory management in retail to hiring and onboarding employees internationally.
You should also invest in modernizing technology to ensure your employees have the best resources possible to work efficiently. Many global employees want to work remotely. You should evaluate whether your teams have the technology, resources, and skills they need to do so. Company laptops, headphones, monitors, and webcams can help remote teams stay connected and feel more valued.
How do I create a Global HR business plan?
So, how can we create a 2022 global HR strategy to guide us through whatever might come? Use the following checklist to help you get started.
1. Audit your 2021 activity
Begin looking forward by taking a moment to look back. Audit your allocation of resources last year. Gather all of your KPIs on an organizational level and sort performance ratings, voluntary churn, and involuntary churn by manager and country group.
Make a list of five or ten things that went wrong, and consider why. Look at what worked well, and assess your strengths and weaknesses accordingly. How accurate was your 2021 planning? Where were you more than 5 percent off from your budget? Make sure you thoroughly understand the year that is almost over to learn from your mistakes and recreate your successes.
2. Talk to employees about the current state
As much as we might wish it, leaders cannot be all-knowing. Your prior year’s audit will tell you a lot about what happened, but talking to your employees will hold the keys to why it happened — which is just as critical to know.
First, gather whatever quantitative employee voice data you might have, such as the results of Net Promoter Scores or engagement surveys you may have conducted, focusing on the comments for clues about your climate. Then, take the time to do some qualitative spot check-ins with employees at every level of your organization and every country in which you operate.
3. Talk to leaders about goals for 2022 and beyond
You may think you have a handle on what’s coming in 2022, but it’s good to sit with senior leaders to discuss their plans and goals. Find out how you can lay the groundwork now for long-term changes. For example, there may be a plan to launch in new global locations in 2023 that you should know about now. Talk to leaders about their aspirations for growth.
4. Talk to department heads about 2022 needs
Reach out to department heads, managers, or anyone tasked with planning for various global locations or practice areas. Ask them for anticipated personnel changes, hires, and exits, and allow them to share any issues that need resolution or ideas for new initiatives.
5. Conduct a gap analysis
Once you have established your current state and the company’s goals for 2022, conduct a gap analysis to see where you need to make changes to support the organization. Look for opportunities. What can you automate? What can you outsource? What can you bring in-house? What are the top risks and challenges? Which countries use most of your resources, and how can you address that?
6. Develop your 2022 strategy
Now that you’ve established your benchmarks and identified shortfalls and opportunities, you’re ready to create your 2022 global HR strategy. You will want to include the following sections:
- Summary: Articulate your overall vision for 2022.
- Top HR business priorities: List the top priorities for the coming year. Include three major corporate-wide priorities along with a list of minor priorities by location.
- Top HR initiatives: List the top three to five departmental priorities for the upcoming year.
- Top HR focus areas and locations: Identify areas for special focus that may fall outside specific annual business goals but address processes, systems, or long-term improvements. It is also useful for some global organizations to recognize key countries or locations for additional consideration throughout the year.
7. Create your 2022 budget
Once you have your strategy in hand, it’s time to create the budget to support it. You now have a base to discuss with your executive team and align with your organization’s priorities and initiatives through your budgeting process.
Globalization Partners can help you build a global HR business plan
An Employer of Record can help you stay compliant with international labor regulations and identify global HR trends. After you find the perfect candidate, Globalization Partners will handle onboarding, payroll, and compensation. Our experts are available for 24/7 support if you have any questions. Contact us today to learn how we can help you hire compliantly through our global employment platform.