Running a global company has many challenges, and human capital management is usually at the top of the list. How do you manage a workforce in multiple countries while ensuring compliance with the laws and regulations in each country?
With elaborate laws in each country that usually favor workers vs. companies, setting up appropriate statutory requirements is a vital step to ensuring compliance. Human Resources documents like employment contracts, termination agreements, and employee handbooks should be created with company policies and specific regulations for each country if necessary. These documents can help create culture across a global organization, even if some of the language varies from country to country.
If you are starting up in a new country, the location and demographics of your staff (expats vs. locals) can have a huge impact on your compensation and benefits, local tax liabilities, and fees. Getting started with expats can seem like the easiest way at first, but expats can cost 3 times as much versus hiring local talent. Create a transition plan to get expats home as quickly as possible to avoid over-spending on human capital.
Software platforms can help tremendously with compliance and simplify operations. Payroll, time and attendance, and HR solutions can integrate with your current systems and help with compliance, audit, and reporting. Talking with a global consultant before you purchase software or hardware can help you select the right products for your business and make sure it is scalable as well.
Some global changes coming in the coming months include Brexit, which will affect the movement of capital and talent, GDPR changes to data privacy, compliance, and maintenance, local jurisdictions that have revisions to laws each year (India has changes each year), and changes to International Labour Standards. All of these updates and changes can have a dramatic effect on your HR compliance if you are not prepared.
Avoid these top 3 pitfalls when expanding into new markets:
- Entity Set-up: setting up company structure properly is extremely important – corporate vs. NGO vs. non-profit, can you operate without contracts, etc.
- Contractors vs. Employees: can you hire contractors or consultants instead of becoming an employer? There are different regulations based on how you hire talent and pay appropriate taxes.
- Compliance/Culture: your US employee handbook may not transfer to your overseas employees. There is country-specific language that can help balance between US requirements and be respectful of the cultural differences overseas.
If you are starting to expand your business overseas, or would like to enhance or optimize your global workforce, we can help! Our global consultants can find solutions for your challenges, or help you get the most out of your global workforce. To watch our most recent Global Compliance webinar, CLICK HERE