Human Resources Challenges
One of the benefits of my career is that I get to work with different types of companies, with many challenges, in various global markets. This always makes for interesting conversations and I love it, but one thing that concerns me when meeting with my prospective clients is their payroll and HR are reactive – they need help!
Let me give you an example. I walk into the conference room of XYZ company. The Global Human Resource Director sits across from me, and to her right is the global payroll manager, “Debbie” (names have been changed to protect the innocent) who looks like she could use some help but doesn’t know where to start. I ask an open-ended question most consultants ask to get the party started, “What brings us here today?” Boom – the floodgates are opened! Now the truth comes out – XYZ company started as a small business in the United States and is having great growth, but the company strategy to grow internationally through new hiring and acquisition is causing problems.
During a short period of time, XYZ has acquired companies in Canada, Netherlands, U.K, and Australia, and they are looking to expand into 3 more countries. At first, it wasn’t difficult to handle employee information and payroll with only 1 employee in Canada, and 2 in the Netherlands. But as they have grown there are now 4 different ways of processing payroll, and managing employees. I told them there is a better solution. Now I can understand why Debbie looks so overwhelmed!
Debbie explains during the company’s rapid growth the team became reactive. She has to manually submit payroll to each provider in the country. Then generate excel reports for headcount-by-country, compensation, etc. Manual, manual, manual is all I hear. I have heard of some companies taking 2 weeks to generate this information – 2 weeks! Unfortunately, most companies don’t know how easy it can be.
How do you fix these payroll problems? What if HR took a proactive approach to payroll? I know they are trying. I am suggesting that if we look at the internal structure of a business with the same strategy that we do the external structure? A process of strategically thinking forward and reasoning back. Most companies do this in every other area of business but HR. Why? Time or Cost? Let’s figure it out. Leaving HR teams in reactive mode instead of proactive makes everyone unhappy. What if you became proactive? You will find a happier work culture and long term sustainable growth.
What does Proactive HR look like?
Let’s start with knowing your growth strategy for the next 5 years. Break this down, 5 years, 3 years, 1 year. Is the global strategy to Hire? Acquire? Those are big differences. Do you know the costs and the pros/cons of each one? If you’re hiring, you need to know country-specific business registration and banking guidelines.
Once you know your strategy, you can start looking ahead. What countries are phase 1, phase 2? What are the social norms for that country? What are the payroll norms? Most countries are on a monthly processing cycle. Some countries require employee contracts, some do not. How do you manage? What are the accounting regulations? Being proactive means knowing set-up timeframes, registration, bank account set-up, establishing entities, and then deciding if that alters your plan.
Be proactively looking at solutions. Do not just accept that how it is handled today is ok. Do not start your search 4 weeks before hiring, and paying employees. In the era of globalization with 48% of companies looking to expand globally, HR professionals have more resources, technologies, and consultants available to them than ever before. What to look for if today you have one employee but in 2 years you are going to have 10 employees in three countries. Plan ahead and find a solution that allows for flexibility and can run your HR anywhere. Look for a provider that offers consulting services – establishing accounts, tax, accounting, legal, etc. Try to get as many services from a single provider to save money and time.
Strategically thinking forward, we can now reason back. What we are willing to spend, what the expected timeframe is for implementation, who needs to be involved in decision making, and ultimately is this the best strategy for sustainable growth or a means to an end. I recently heard a great quote, “Leadership drives strategy, resources drive tactics.” Great leaders are the proactive strategists, that motivate their teams to handle tactical tasks, by providing the best resources.
A call out to Leaders, don’t be reactive, be proactive. Think strategically and reason back to where you are and where you will be. Create a culture of resources to help your team be strategic. Do this in the beginning, and the foundation of growth will be set. I have included links to a few great resources for reference.
Jason Cadle is a Regional Sales Executive with Blue Marble Global Payroll.