Check out the 8 Top Human Resource Issues in International Business
Updated: Feb 16, 2022
Having a functional and productive HR team at your headquarters is one thing. But expanding to other countries can pose several unpleasant human resource issues. Several HR issues could arise for any company, ranging from complying with international labor and employment laws to recruiting and retaining top talent. The problem of hiring the right skills to manage your base in another country alone is severe enough to discourage any well-meaning business.
We've reviewed these top human resource issues in international business to help you prepare better as you take on a global audience. This way, you will be positioned to make your expansion a success.
1. Talent Acquisition
Recruiting and hiring internationally is a major human resource issue in international business. You'll need to navigate different talent pools, recruiting methods, legal restrictions, and labor market dynamics in the new country. This means that your recruitment strategy in your home country may not work in the new region where you want to hire more staff.
The best strategy for working with local or international recruitment agencies or HR partners. As another option, your in-house HR team can recruit directly, but they must be aware of the nuances of recruiting in the region, ensuring that all legal requirements are considered to prevent future problems.
2. Complying with Local Employment Policies
Employment laws vary dramatically from one country to another. Many different levels of law govern the minimum pay rates, the minimum entitlements of employees, the industry practices, the safety and comfort obligations of employers, etc. Aside from national and local laws, there are also industry policies to deal with.
The industry you plan to operate will most likely have policies guiding their activities, ranging from product development and marketing to issues like price, certifications, and licensing. It would help if you did your research to uncover any gray areas, as failure to comply in any of these areas may hamper the growth of your business in that country or city.
3. Managing Compensation and Benefits
Whether at the homefront or across the borders, workers' compensation and benefits have always been a significant headache to businesses. Many organizations in the U.S. have had to turn to PEO companies to help them provide competitive employee benefits to their employees at affordable costs. Going across the border does not eliminate the issue. Instead, it takes a different dimension.
What obtains in your home country may not work for your new remote hire. To offer fair compensation and benefits to employees working in other countries, you need to research the acceptable standard in the country, industry best practices, the cost of living in the city, and the legal parameters that must be satisfied.
4. Cultural Differences
Navigating cultural differences requires intense research or even collaborating with a local team. It's one thing to produce a fantastic product widely used around the world. Still, another thing entirely is finding people who can help you market your product globally and interact with your clients on a local basis. Here, in-house concerns could range from losing your brand tone and messaging to using offensive terms when marketing.
There are many communication styles in different cultures around the globe. You must understand these styles and use them effectively to build a solid relationship with someone from that culture. Many companies resolve to work with interpretation and localization consultants or agencies for this part, or better still, hire employees who understand the language and culture of the locals. This makes it easy for you to communicate in their native language and acquire more customers without trespassing sacred cultural boundaries.
5. Training and Support for New Employees
Hiring internationally comes with almost the same challenges as hiring locally. It would be best if you had employees who are good at what they do, not people who need intense supervision. However, in some situations, your HR team must provide ongoing HR assistance and education for the new remote employees, at least until they can stand on their own. This is otherwise known as capacity building.
Employees in other countries must understand how to communicate with clients and incorporate your company culture with other staff members and clients. Providing them with enough training and resource materials will help sustain your corporate standards and keep them equipped to handle the demands of the business.
6. Legal Risks
Another essential human resource issue in international business is legal risks. From getting your business registered to comply with jurisdictional and industrial policies and tax filings, there can be quite a handful to deal with legally. It is in your best interest to conduct thorough research before setting up shop in another country.
7. Navigating Language Barriers in Communication
Human resource management for foreign teams must include strategies that navigate language barriers. When looking to expand internationally, ensure to have plans for communication across language barriers.
Sharing information with your global team must be seamless to ensure the smooth running of daily operations. When this is lacking, your problems tend to multiply overnight. Effective communication is key to the success of any international business, so your HR team must have a plan for that.
8. Local Competition
Let's throw in one bonus. This is not exactly an HR issue international businesses face, but it is an issue for global companies. If your strategy is not strong enough, it will not hold up against the fierce local competition, especially if you enter an already competitive market.
You must be offering something the others don't have. Your marketing strategy must be innovative and robust enough to penetrate the market and earn you a fair market share of customers. Your local marketing team must do their homework if your business will succeed internationally.
Hire an international PEO Partner for Your International Business
Working with an international PEO can be all you need to navigate global business HR issues. Hiring internationally doesn't have to be overwhelming or crazy expensive. An international PEO provides an opportunity for employers to employ professionals without necessarily going through the hassles and costly expense of hiring locally. You can learn more here.
At Mission, we offer businesses the services and solutions they need to scale internationally. We also bring our years of experience and rich insight to the table, helping you easily navigate top HR issues for small businesses looking to expand. We also provide your business with answers to all your bugging HR and outsourcing questions. Don't hesitate to get in touch with us if you have further questions about international PEO or hiring employees in other locations.