Benefits of HRMS software to global businesses

It’s tempting to assume that larger organizations are all sorted for HR; especially in terms of essential IT support. After all, they’re a world-spanning behemoth; they must have solved any system or procedural issues by now, surely? It would be impossible to achieve global domination without sound people systems. Well, not necessarily…

Global growth – however strategic - is often an organic process; one country, territory, or market at a time. New employees are recruited as and when necessary, and addressing the intricacies of local employment legislation is often ad hoc or done on a ‘bare compliance’ basis. Maybe this is done with a genuine intention to set up more in-depth, coherent, and consistent systems later, but the potential legislative differences in a new territory can be huge, including, for example:

• How personal data is handled
• Minimum wage rates
• Overtime rates
• Limits on working hours permitted
• Number of public holidays
• Statutory recommended or mandated paid days off
• Sick absence regulations
• Parental and caregiver leave
• Healthcare coverage
• Basic working conditions
• Employment contracts
• Termination/end of contract procedures

And that’s just the basics. There’s also the question of managing payroll in different currencies – due to the fluctuations of the international currency markets, you can’t guarantee that two people in comparable roles in different territories are being paid comparable salaries.

Then there are potentially endless cultural differences that will affect employee expectations – for example, what constitutes an acceptable (or excellent!) benefits package in the US will be different from the norm in Europe, India, or Asia.

The organic model of business growth is natural (logical, even) but the downside is the resulting fragmented HR systems. It’s not unusual for a global business to have a different HRMS for each country’s workforce. Unfortunately, that means different service standards, multiple suppliers/vendors, and varying levels of efficiency and consistency when it comes to issues such as payroll, time and attendance, reporting, and even just employee records.

The shift to using a unified global HRMS offers a number of benefits but also requires a more strategic approach:

Consistent services to employees

Operating a global HRMS means having a single employee database as the basis of your automated HR services. This consistency of the database leads to greater consistency of HR services, and of the overall employee experience, as follows:

• All of your HR people (either in-house employees, outsourced service providers, or a combination of the two) are drawing on a centralized set of records.
• Everything is in the same format, regardless of national boundaries and this enables you to carry out some truly global analytics and reporting thus providing the C-suite with broader (and deeper) insights into the workforce as a whole.
• All employees experience uniform treatment by the organization. Managers can use the same approaches to performance management, retention, and payroll and such common experiences contribute to everyone feeling part of the same, broader team (we’re all in the same situation).
• Such consistent management practices – enabled by the software – also contribute to a feeling of fairness (we’re all treated equally).

Although, all that being said, you retain the flexibility of using different systems where legislation or culture demands it.

A single brand

To expand on the “uniform treatment” point above, a single, global HRMS with standardized self-service functions for all employees irrespective of location creates a global internal brand and organizational identity. Put simply, when everybody is logging into the same HR portal, regardless of country of operation, it feels as if they are working for the same employer and not a ‘local version’ that happens to share a logo with other national teams.

This perception not only makes it easier to set uniform (and unified) priorities and create a wider sense of belonging, but it also makes cross-team collaborations easier in that when separate teams come together, they have a readymade set of commonalities – the first bridges have already been built.

Improved engagement and team working

Many HRMS include functionality for employees to connect, communicate, and collaborate. This can be leveraged to break out of silo working practices – for example, by ‘crowdsourcing’ problem-solving across departments, bringing insights together from people whose duties and responsibilities might otherwise keep them apart. Now imagine that benefit on a global scale with instant collaboration across continents moving your most strategically critical projects forward and solving global issues globally.

Streamlining your supplier list

Juggling multiple IT suppliers and vendors can be a headache, especially when you need their disparate products to function and communicate seamlessly. Whereas the scattered, each-country-on-its-own approach gives you a long list of suppliers, going for just one, up-to-date HRMS automatically cuts down the difficulties you need to manage. Everything – upgrades, service level agreements, contract negotiations, etc. – becomes so much simpler when you only have to deal with a single supplier.

Even if you deem it more practical to deal with a number of resellers (one per territory/country?) at least they’re all providing the same system and potential complications are still reduced.

Cost-cutting

Unsurprisingly, the big jackpot when you consolidate HRMS functions for a global business is in the money saved. HRMS contains many costs, obvious and hidden, and those costs multiply when you have multiple systems. Instead of having multiple licenses and maintenance contracts with several suppliers, find and negotiate multi-country use of a global system.

Not only does this streamline your system and supplier costs, but you also have potential savings on legislative compliance; plus the intangible saving of improved communication between teams who may come from different national cultures but are working within a single organizational culture.

Achieve consistent HR services worldwide. Learn about the best HRMS vendors and start shortlisting your top choices today.

More opportunities for your people

If your HRMS can manage HR processes globally, it benefits the entire workforce. Different systems for different territories complicate employee migration and exchanges.

When HR systems are synchronized, inter-territory differences remain, but processes become compatible, making it easier for employees to switch between them. Moving talent between countries is never going to be as simple as transferring a key employee from the third floor to the fourth, but it will be smoother and more straightforward, with fewer internal barriers to worry about.

More time to focus on your business

As with any HRMS, one key beneficial effect is that your managers can focus on their core business (getting done whatever needs to happen to hit your KPIs or strategic objectives) because they’re not wasting unnecessary time on intricate or bespoke HR processes. This is also true for your HR team (assuming that you haven’t outsourced the function by now) who might otherwise be bogged down in unfamiliar employment and tax law. 

Furthermore, when you use the resources of your HRMS to improve your business foundations – e.g. predictive analytics to inform your business priorities – you’re taking the widest possible view of the organization and not leaving anyone behind.

Less stress

Finally, let’s not underestimate the stress and pressure that can be felt by those employees whose roles demand they ‘work across’ different territorial and national boundaries. Fragmented systems mean that they have extra (and unnecessary) issues to take into account.

The last few years have seen increasing emphasis placed on supporting employees’ physical and mental wellbeing. Yes, many well-being factors may well be individual or local, but for people with potentially high-stress international responsibilities, smoothing out the ‘cross-border HR bumps’ makes a difference. Lower stress and burnout rates are a benefit worth having.

Global HRMS strategy

It’s easy to say that a global HRMS can and will support you to manage your global workforce more fairly and consistently but before you google “global HRMS” it helps to know what you’re looking for – in other words, knowing your global HR strategy first will inform your search and lead to (hopefully) an HRMS that’s a better fit for your needs.

Your global HR strategy should take into account:

• Cultural differences – for example, different cultures have different attitudes toward authority and ‘appropriate’ behavior may vary (e.g. cultures vary greatly in terms of what is acceptable by way of personal space, physical contact, etc.)
• Language and nomenclature – apart from deciding on the lingua franca of your organization, there are questions of nuance that can impact greatly; e.g. the use of “expat” to describe workers from the ‘head office country’ working elsewhere is seen as increasingly problematic and even xenophobic.
• Legislative compliance – uniformity is great but some differences are essential and those are often driven by variations in legislative frameworks.
• Think about roles and descriptions – what you need in a good ‘national’ manager may be very different from what you need in an ‘international’ manager.
• Emphasize the benefits of your global setup – for example, one obvious opportunity is the border-hopping career so construct career paths that take full advantage of the organization’s multinational nature.

If you’re currently running multiple systems worldwide, consolidating into a single global HRMS that meets your needs can be challenging. However, the potential benefits make it worth the effort.