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.
Global HRMS benefit #1 – 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 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.
Global HRMS benefit #2 – 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.
Global HRMS benefit #3 – 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.
Global HRMS benefit #4 – 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 that you have 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.
Global HRMS benefit #5 – 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.
Global HRMS benefit #6 – more opportunities for your people
If your HRMS has the capacity and functionality to smoothly manage HR processes on a global scale that’s also good for the workforce as a whole. Different systems for different territories mean that in terms of employee migration or just secondments and exchanges, you might as well be negotiating deals between different companies or organizations.
When HR systems are synchronized then yes, inter-territory differences will remain, but now your processes are compatible, equipping employees to switch between them more easily. Maybe 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 as smooth and straightforward as it can be – at least any barriers won’t be those thrown up by your own in-house protocols.
Global HRMS benefit #7 – 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.
Global HRMS benefit #8 – 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 in the position of running multiple systems around the world, then the selection and implementation of a single system that is truly capable of meeting your current and future needs are far from challenge-free. However, given the potential benefits on offer, it may just be worth the trouble.
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