In the past 5 years, global HCM and payroll has been a hot topic in groups such as SHRM, LinkedIn and Quora. The main question is – Why is everyone talking about Global Payroll?
Current State of the Workforce:
For the first time in history, it is projected that the U.S. will have 0 to .5% growth in the workforce from 2010-2030. This is going to cause a productivity problem for US companies. Economists explain that productivity growth happens in three key areas; more workers, better R&D in tech/machines, and HCM-Education/Training.
With the U.S. in a declining state of work force population and inflated education costs impacting the younger U.S. work force, where are U.S. companies looking? Globally!
US GDP Growth:
Global projections indicate that the U.S. will be growing at an average GDP of around 2.5% for the next 40 years. While the world GDP growth rate is projected to grow at 3.1% with three countries leading the way; China, India, and Brazil.
So, why is everyone talking about global HCM? The demand for products, services, and workers is growing around the world. Companies that will compete and grow will need to think global, or already have. There are 3 questions companies should consider when thinking of expanding globally.
Should you go global?
1.) Can your company be a first mover to these emerging markets?
2.) Does manufacturing or expanding globally give your company a competitive advantage? Can what you produce/provide in the U.S. be manufactured or distributed cheaper abroad?
3.) How does leveraging distribution overseas give you a competitive advantage?
Making it work
One common question I hear amongst peers and clients is how are companies going to manage their global workforce? Multi-national HR executives must be resourceful if they plan on executing a global workforce. However, many HR Executives are not equipped with the tools, budget, and resources to manage a successful global workforce – especially in small to mid-sized companies that have fewer internal resources. When smaller companies are looking to expand or manage employees already operating overseas, they should look for payroll aggregators that can help with business consulting, payroll, and accounting in each country. As the global market has grown, more resources are available at cost-effective pricing, which in turn has led to even more buzz than ever around Global HCM/Payroll.