HR managers and their teams are well aware of the challenges a rapidly growing, multi-region workforce presents. Finding the right international candidate in a foreign market. Updating PTO policies across different languages and platforms. Navigating employee data privacy legislation around the world. These are just a few examples of the challenges impacting international human resource management—a market that is growing at an annual rate of 11% and will reach more than $30 billion by 2025.
As you invest in global HR initiatives, make sure you consider these trends that will significantly impact the way you design and implement policy, process and best practice.
Evolving role of HR
For tenured HR professionals, their role today might look vastly different from just a few years ago, especially if their organization has expanded internationally.
Today, HR is moving away from being a supporting role and is evolving into a more strategic partner. The emergence of the HR Business Partner position underlines this trend. Successful organizations are maximizing the value of this strategic position by shifting their responsibilities from typical day-to-day HR tasks, like updating employment records and reviewing resumes, to initiatives that help achieve organizational objectives.
To manage this shift in responsibilities effectively, HR is either outsourcing core functions like payroll, hiring and benefits or passing responsibilities to other departments. With more time and resources available to them, HR teams can take on dedicated projects as needs arise.
Major business transformation projects, like conducting an end-to-end review of your organization’s recruitment process or maximizing the value of a Human Capital Management (HCM) system investment, can be owned and managed by HR in collaboration with other departments. Cross-functional activities like these can quickly elevate HR’s position within the organization, defining them as an able and willing partner that is agile enough to meet growing demands.
Changing employee expectations
Remaining flexible in order to adapt to a changing global workforce has never been a greater challenge for HR. 2019 marked the first time in history that five different generations worked together at the same time, and 2020 will be the fourth year that Millenials constitute the largest generation in the labor force.
Yet employers are still failing to implement policy and working practices that meets their demands. Even though 75% of U.S. millennials want their work environment to be flexible and fluid, Deloitte’s Global Millennial Survey found that only 39% believe their work environment is flexible.
Given the aging workforce and hyper-competitive job market, this is not an area that HR can afford to ignore. In August, a record percentage of small-business owners reported difficulty finding qualified workers for open positions.
HR talent teams can do more to attract and retain talent across the generations. Ensuring initiatives map back to what these younger generations want from a career can put you in solid standing. Some of their priorities include:
- Flexibility and work-life balance
- Making a meaningful impact
- Experiences rather than achievements
Promoting a flexible work environment is now commonplace in many organizations. But as new generations enter the workforce, the next phase to consider is flexible career options. Offering employees meaningful work experiences, including the ability to move between departments, provides an opportunity for organizations to hire and retain the best talent.
Improved employee experience
Organizations that rank in the upper echelons of “Best Companies to Work For” lists from sites like Glassdoor and Inc. are continually raising the bar on employee experience. The toughest reality for employers is that a majority of them do a poor job of implementing new recommendations. For 2020, CHROs and their teams would be wise to revert back to principles that emphasize the “human” in “human resources.”
The Future Organization, founded by Jacob Morgan one of the world’s leading authorities on the future of work, provides organizations with a quantifying scoring model to rank their employee experiences. Those who score highly on the index demonstrate a strong aptitude to meeting the changing expectations of the workforce, such as providing:
- Vibrant workspaces
- Flexible, autonomous work options
- Fair treatment and a sense of purpose
- Resources and opportunities to advance and learn something new
- Coaches and mentors instead of managers
It’s also well worth the effort to keep a pulse on employees and former employees. Setting up Google alerts for your organization’s name can help you stay up to date as new comments and mentions are made online. Even review sites such as Glassdoor can provide HR with actionable advice that can inform decisions and help you create an industry-leading employee experience.
Employee growth and development
Education is in the midst of a revolution. Traditional learning methods are being shunned as fewer individuals are willing to invest the time and expense to acquire skills that may not be relevant in tomorrow’s workplace. The MBA market has seen demand fall for five consecutive years.
As employees move away from institutionalized education, they will expect their employer to play a larger role in their continued growth and development. HR can offer education opportunities through personalized learning platforms like Coursera or Lessonly to support both personal and professional development. They can also facilitate knowledge-sharing and mentorship programs to encourage employees to share best practices with one another.
A survey by the Work Institute found that a lack of career development is the No. 1 reason why employees quit, so adopting a cookie-cutter training program and making it mandatory across your workforce simply won’t cut it in 2020.
Even small changes can make a difference. For example, employees at Slack are offered annual stipends of $500 for personal development and up to $2,000 every year for professional development opportunities. And Curve, a fintech startup, implemented an “Unlimited Book Policy” so employees can buy and expense any book, provided it’s later donated to the company library for others to read.
HR data and analytics
HR will increasingly become the go-to department for data-driven information that can inform the rest of the organization. The CFO may want insight into the amount of overtime paid in employees in LATAM, for example. No matter the reason, rapidly delivering accurate data is on the list of everyday demands for HR.
As organizations mature in their data proficiency, they will be able to leverage predictive analytics. Rather than reporting on turnover rates, HR can predict why turnover is happening and design programs to address employee attrition before it happens.
Google built a People Analytics department to ensure that all decisions related to people are based on data and analytics. This group has identified “meeting cancellation rates” as an indicator of potential turnover and has helped inform an on-boarding process that increased employee productivity by up to 15%.
Wearable technology and employee wellness
Hitachi was one of the first organizations to use wearable devices within the workplace. They found that employees who experienced more variation in physical activity, as opposed to repetitive tasks, were happier and more productive. This key insight from wearable technology ultimately helped inform their employee wellness initiatives.
When used to track key health monitors—such as sleep cycles and calories burned—wearables can indicate the health and wellness goals of each individual employee. They can also detect major health concerns, like if an employee’s blood pressure increases dramatically.
Although there might be privacy barriers to overcome with wearable devices, the potential benefits could be well worth it. From decreased healthcare costs to increased productivity, organizations that continually search for marginal improvements like these will stand out in a crowded market.
Portable benefits systems
An emerging global HR trend related to the gig economy is the advent of portable benefit systems. In this model, contract workers will be able to port 401(k) pensions and health benefits seamlessly between gig jobs.
If individuals have the ability to transfer their benefits around alongside their employment, particularly in countries without universal health care, we could see an influx of contingent jobs. Organizations offering traditional employment options may find themselves second choice, if this opportunity becomes a reality.
Increased regulations on contract work
Don’t expect the gig economy to disappear from your newsfeed any time soon. As temporary employment grows, scrutiny will continue to intensify and governments will continue to act.
California recently passed Assembly Bill 5 (AB5). This legislation is one of the most revolutionary steps to date in directing how independent contractors are treated in the U.S. The bill sets out to ensure employees are no longer incorrectly classified as independent contractors—a misstep that negates any basic worker protections, such as paid sick days and health insurance. Expect improvements in worker rights to intensify in other states, as well as around the world, particularly in European countries.
To negate the risk of employee misclassification—especially when hiring in countries where organizations have no entity—HR can leverage Global Employment Outsourcing.
These global HR trends highlight many ongoing challenges the HR department will need to overcome to meet changing demands—from both a global workforce and business leadership. A knowledgeable payroll and employment partner can help you navigate these trends, strategize for the future and reach your ambitious 2020 goals. Contact us today to learn more.
Related content: 2021 global HR trends