Today’s economy is extremely globalized. Many factors contribute to realizing success as a truly global business.
Expanding into other markets isn’t simply a matter of sending a sales team on an overseas mission. There is so much more required. According to a recent report by Accenture, companies need a human capital and HR strategy that is fully aligned with the business growth strategy. Often, the HR component of a business strategy is looked at as a follow-up measure to consider after the advanced team has established some presence in a new market.
To be successful, however, senior leadership must agree that this component isn’t a follow-up, but something that is part of the globalization vision from the very beginning. Additionally, it is critical to find the right balance between international structures and local processes. So, while HR systems will play an integral role in creating global operations that can function in accordance with local norms, establishing local credibility will be a matter of hiring the right people. Local credibility can only truly be achieved through the employment of a relevant and able workforce.
Ideally, it’s nice to think that hiring in a global economy is truly a borderless process. However, this is not the case. Different visa restrictions and legal policies in countries can often prevent the continuous seamless transfer of employees. It is becoming more difficult to bring talent into the United States.
For companies that want to succeed globally, management and leadership need to be well-versed with different countries and cultures. Diversity of board makeup is very important. For example, the board of directors at MasterCard, include executives from the United Kingdom, India, the United States, Mexico, Belgium and Hong Kong. Philip Morris International Management’s board includes members not only from the United States and Europe but also from Mexico and China. Thus, it is often best to bring this talent in from overseas to appropriately lead and orient teams who will be working with a specific region.
Unfortunately, visa requirements are abundant, and companies are finding it increasingly difficult to diversify the way they desire. While H1-B visas are limited and based on luck, another way to bring in talent, even temporarily is through the O-1 visa, for people with “extraordinary ability.” This is especially useful for company superiors and is more acceptable as it does not threaten local jobs. HR professionals need to be aware of possibilities such as these, that allow for a transfer of leadership talent when necessary. In this way, to be both globally efficient and locally responsive when necessary, a company must adapt HR models that are more agile.
A good example is the London-based Diageo, a premium beverages company with offices in 80 countries and a presence in about 180 markets. Diageo created appropriate HR operating models for different markets by using a customized shared services model that provides consistent service to employees and can quickly be adapted to adhere to local market requirements. The company has two centers (in Europe and North America) that serve as virtual hubs, providing faster service to employees, in terms of processing paperwork, legal requirements and more, wherever they are. For instance, a knowledge repository helps standardize functions and process transactions in accordance with local laws for any of Diageo’s offices/markets.
Virtual hubs like that of Diageo’s are only possible due to the major technological advancements in today’s day and age. Digitization has allowed for a plethora of opportunities in terms of streamlining work processes, boosting productivity and efficiency overall. One of the many benefits of digitization that is especially poignant to hiring in a global economy is the ability to work remotely. According to a recent report, 43 percent of American employees spent at least some time working remotely in the past year. So even if it isn’t possible to immediately hire local help in case of a work emergency, or for an entire team to relocate to another country for a short assignment, cross-continental telecommuting is a viable solution. Ease of access today helps with communications amongst worldwide offices, allowing for “borderless” workforces.
Still, working remotely when it comes to leadership positions is not the smartest business decision, let alone very inconvenient. To be successful in the global economy, global experience and exposure is not a luxury, but a necessity. Sometimes, this sort of experience requires sending American personnel overseas for work. This is often in the form of long-term overseas assignments for employees.
However, there are more creative ways of facilitating this. Take the example of Royal Dutch Shell cited in the report by Accenture. Julian Dalzell — recently retired after 43 years in HR leadership roles with Royal Dutch Shell, employed a different approach. At one point, he had 11 people from his HR team, each with less than five years’ experience, working overseas on short-term assignments in Singapore, Canada, Holland, Brazil, Turkey, Qatar and Kazakhstan, among other locations.
This worked in a myriad of ways. More people were agreeable to sign up for shorter assignments, visa laws were more amicable to short term placements and there was less worry that outsiders were coming in to compete with local talent. Even though overseas assignments require a lot of preparation, Dalzell said “the unintended consequence was that they [employees] came home keen to share the incredible experiences they had and what they had learned. So it sparked an enthusiasm and an energy that we could not have created ourselves.”
In this way, HR processes must be in sync with the growth strategy for any company to succeed globally. Companies must create processes and work in ways that encourage innovation and efficiency at the local level, fostering an attitude of transparency amongst global and local offices, without compromising global set standards. To do so, hiring the right people in the right manner is significant for proper execution. As the world becomes more globalized, it’s easy to overlook some of the barriers that prevent a truly “borderless” workforce. However, with the correct human capital and HR strategies in place, companies will be able to get as close to “borderless” as is possible.