One of the biggest challenges for any multinational organisation operating across regions and in diverse cultures is how to devise an HR strategy that sits comfortably alongside local laws, behaviours and customs.
Global HR strategy
Jane Hollman is a strategic global HR executive who has worked for the AFL and Citigroup in Australia and various companies in the US, including AMEX and MasterCard.
Of developing an international standard, Hollman says that coming up with a global HR strategy is the first (easy) step; rolling out the policies at a local level is where the education begins.
“You try to be consistent across the globe but sometimes it doesn’t work like that. We set up a global HR system at Woolmark, the whole point of which was that it was connected so, for example, I could go into the system and get information on attrition levels or see where someone was up to in filling in performance reviews.”
The one-size-fits-all approach
Garry Ridge, CEO of WD-40 Company, believes that the days when companies could adopt a top-down, one-size-fits-all HR strategy are numbered.
When your company operates across 187 different countries as his does, the challenge of running a coherent and effective global HR strategy is always evolving says Ridge.
“We learnt over time that HR policy needed to be relevant to a local region, particularly in the area of compensation, so we could attract and retain the right people.”
“In the US, for example, equity compensation such as stock options is very common,” says Ridge, “Whereas in Europe, the taxation system makes it less favourable.”
When a company moves into new territory, there has to be a process in place to identify HR issues specific to the country as this will impact upon what you can do, advises Ridge.
Challenging cross-cultural experiences
“There’s the complexity of time-zone changes for example, when you call up in the morning and their mindset is that they’re ready to go home. Also, there are simple words that don’t have the same meaning in both countries or don’t mean anything at all for one culture.”
Even areas of HR that would seem to be suited to a standardised global policy, such as employee engagement and wellbeing, can be subject to local conditions.
BUPA operates in 190 countries and employs 52,000 people worldwide. Penny Lovett (FCPHR), BUPA’s people director, Australia and New Zealand, says that for a service organisation, employee engagement is vital as it impacts upon customer experience and performance.
Lovett says “BUPA has baseline standards that we apply around the world, but what we’re seeing is countries exploring wellbeing in different ways. In Spain, for example, they are building a program specifically around improving fitness and hydration in direct response to closely observed local needs.”
“Whereas in Australia and New Zealand, the approach is based around the importance of movement, fitness challenges and good nutrition.”
When things go wrong
In 2005, when Citigroup sold its asset-management business to another US company, the Americans assumed their Asia-based employees would be fine with it as jobs were being transferred rather than lost. They were wrong.
“Working for a company such as Citigroup in Asia is very prestigious,” explains Hollman. “Suddenly the staff were being moved to a company that none of them had ever heard of.”
“They felt a loss of face about no longer working for a prestigious firm. I had to help the US acquiring company understand that this was a real issue for them. Even though the staff had no choice, I told them they had to send people out to sell this, otherwise many of the Asian staff could resign,” she recalls.
Global HR policies
But how prescriptive should global HR policies be in each region when it comes to codes of conduct, labour representation, discipline, discrimination and harassment, smoking, safety protocols, email monitoring, crisis response … the list goes on.
These aren’t easy questions to answer, says Donald Dowling of global law firm White & Case, based in New York.
He says selecting the best approach really depends on the policy topic and outlines three choices faced by any multinational HR department: the single cross-border approach, the dual “them and us” approach or the multiple variation, tailored to the local territory.
“There are merits and disadvantages in each case,” Dowling suggests.
“As every country’s laws are unique, tailoring aligned local HR policies or crafting individual ‘riders’ for each country to account for variations in law and human resources policy should be the most effective strategy,” Dowling says.
But issuing many different versions of one essentially global HR policy can get unwieldy – and expensive – he cautions, particularly if everything has to be translated.