What does International Human Resource Management do? And why should you make it part of the way you work?
Business has a people problem. There simply aren’t enough workers to do all the work. According to a 2020 report by McKinsey, 43% of organisations report existing skills gaps. 44% expect to experience skills gaps in the next five years. Your HR team has an important role to play in recruiting, onboarding and training new people, but there’s no escaping the fact that the raw material of HR – people – are in short supply.
That’s just part of the reason for International HR Management.
What Is International Human Resource Management?
International Human Resource Management (IHRM) takes your HR activities to a global scale to effectively address two issues:
- When your organisation is global, IHRM ensures you have a joined up and consistent approach to hiring, onboarding, training, appraising and more across all the territories in which you are active, subject to local requirements.
- IHRM also enables you to hire workers outside your domestic market – because in a connected world, one way around local talent pipeline challenges is to source talent in places that are a long way from local. IHRM is effectively how you manage anyone, anywhere.
What’s the difference between Human Resource Management and International Human Resource Management?
- Location: HRM keeps HR operations in a single country. IHRM sees HR span workers two or more countries.
- Culture: HRM in a single country is relatively simple. The more countries you fold into an IHRM system, however, the more cultural differences you encounter. From local employment customs and payroll conventions to much broader differences in expectations regarding, for example, paternity leave, public holidays and progression, an IHRM is a structurally more complex arrangement that needs to incorporate the (sometimes contrasting) requirements of the parent country (where the HQ is based), the host country (where a subsidiary may be based) and third countries (where individuals may work).
- Legal: In a domestic HRM arrangement, the only HR legislation you’ll need to comply with is that of your home country. With IHRM, you may find your organisation needing to comply with a range of international legislatures.
What does International Human Resource Management Do?
Recruit: Hiring and onboarding are at the core of every HR manager’s role. The same is true of IHRM, although the recruitment assumes a global perspective. That brings a range of cultural, language and legal challenges, with different job ads required from territory to territory to ensure they resonate with local candidates, different employment contracts to take account of local laws, and different expectations of onboarding.
Engage: From benefits management to staff surveys, it’s important to be able to engage your people in a locally compliant way.
Manage: They may be the ‘nuts and bolts’ of the HR role, but the consistency of admin and document management, absence management and reference templates takes on renewed importance in an international context. IHRM helps ensure a common approach wherever possible.
Offboard: Standardized leaver processes and template communications ensure a common approach tailored to local requirements.
Why choose international HR services?
Opening larger markets – or engaging the services of a global workforce – can be an extremely exciting and energising time for a business, but it can be challenging too. The more countries in which you operate, the greater the complexity. That’s why working with an international HR partner can prove so valuable.
Staying compliant: Operating internationally means you have to work in a compliant way, everywhere. It’s not easy for an HR team to manage that. Nor is it easy to build the right overseas partnerships to make it easier. An international HR management partner can help guarantee compliance in every territory, which protects you from risk.
Knowing what you don’t know: For many businesses operating overseas, the biggest challenges come not from the things they’d anticipated, but from the things they didn’t even know should be on their radar. The right international HR partner can provide local intel that tells you more of what you need to know.
All in one place: The right international HR support can ensure all your documents are kept in one central location, so it’s easy to access the information you need for every territory.
Real partnership: The right external partner is one that works with you, alongside your in-house teams. They don’t assume control; they’re simply there to help with the sort of tailored know how that can make handling international hiring exercises, collective bargaining or questions of employment law easier.
If you’re expanding operations or hiring overseas, talk to us about streamlining your international HR management.