Talent wanted to fuel global growth
During the economic downturn a few years ago, many businesses were stretched thin, had flat head counts and simply buckled down to ride things out. Now with the economy continuing to recover, agility is going to be paramount in helping to attain a competitive edge. For global employers, that means having the right talent in place to turn business strategies into robust performance results.
Rich talent pools needed to fuel global expansion
Expansion into new markets was cited as the number one business objective of respondents in the 2014 Global HCM Decision Makers Survey. Organisations that want to expand globally need to evaluate where their best opportunities for growth lie and develop risk management strategies for entering new markets. Interesting, executives in North America and APAC were more positive about their global growth opportunities than those working in EMEA, but all are focused on leadership and workforce development.
Bench strength is essential to achieving growth plans
Similar to the Decision Maker’s study, over 50% of respondents in a Worldwide ERC® survey revealed their companies global workforce had increased over the previous 12 months – yet nearly all were facing shortages in qualified talent to fill critical jobs or roles. As growth strategies become more defined, business leaders will be looking for HR to help deliver the talent to make that growth possible. HR should have a well-developed acquisition, development, mobility and retention strategy to meet these needs in the face of talent shortages.
Talent top of mind
Whether considering business goals or overcoming roadblocks to success, talent was a resounding theme throughout the survey. It is interesting that two of the five business objectives and three of the top five business challenges for success identified by executives were talent-focused.
While the “war for talent” might be a well-worn expression, the shortage of skilled global talent that can be deployed globally is a serious, ongoing and real challenge. Recruitment and acquisition are only the first steps in a well-rounded people strategy. As globalization continues and companies look to expand, organizations will need strategic talent plans and policies in place to onboard their employees – and sometimes their families – by introducing them to new cultures, languages and policies.
Compliance becomes more challenging across borders
Navigating multiple countries, cultures, languages and currencies is part of doing business globally. Adding to the complexity is the burden of compliance across international borders. Internally, it is difficult for a business to stay abreast of laws and regulations in every country where they operate. Legislation is constantly in flux. Without a focused effort on compliance and oversight, multinationals will have a difficult time anticipating and mitigating compliance risk. Agility, the ability to act decisively in this area, can make all the difference in mitigating risk across international borders.
The compliance conundrum
The Global HCM Decision Makers Survey also found that 54% of global HR executives view compliance support as “must have”. In the same study, 43% of executives identified the need for additional tax and compliance support.
So if global executives understand the importance of compliance and recognise the need for help, what is standing in their way when it comes to appropriately managing oversight and compliance risk across the global enterprise?
Multiple systems can impede risk mitigation
Maintaining compliance across multiple and diverse geographies can quickly become a management challenge, as different jurisdictions amend legislation and pass new laws affecting HR policies. This is made more difficult by the fact that the average number of payroll systems and vendors for a typical multinational company is 24. Add to that an average of 21 HR systems and vendors and it is easy to see how having many different payroll and HR systems per company could have a cascading effect on tasks such as:
- Managing compensation plans globally across multiple currencies
- Tracking employee performance on a worldwide basis
- Managing payroll in compliance with local employment practices and privacy rules
- Generating management reports that include employee payroll and HR data worldwide
Integration between various HR and payroll systems is instrumental in providing the oversight and controls that effectively mitigate risk or support the analytics necessary to make informed business decisions. Unless global businesses tackle this challenge of multiple siloed systems, agility and risk mitigation will be extremely difficult to achieve.
Good execution delivers business results
When asked what areas of HCM are likely to have the greatest impact on achieving business outcomes, four of the top five enablers to success identified were talent management-related. In order to meet and exceed business goals, execution in all areas of talent appears to be essential. Virtually every phase of the employee life cycle provides an opportunity to gain a competitive advantage. Recruitment and acquisition help build and sustain a rich talent pool.
Performance management data can help identify key talent, knowledge and skill gaps, and leadership candidates for succession planning. Training and development can strengthen individual contributors and the leadership bench. In addition, compensation and benefits can help recruiting and retention strategies.
Competitive positioning, future growth and needs, and an organisation’s ability to deliver on its goals are intricately tied to overall people strategies. From identifying and hiring global talent through onboarding and retention, talent management is clearly an area that is rich with opportunities to help drive business results.
However, without simultaneous scrutiny and improvement of HCM processes and technologies, success may be hampered. Business solutions that combine integrated software and an ongoing service component – storing information in the cloud – provide global businesses with a highly efficient way to manage their organisation, regardless of where talent works and resides.