Ragu Bhargava is the co-founder and chief executive officer of Global Upside Corporation (GUC), leading company strategy and operations.
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It’s fun to play a game of “telephone” at a party and see the way information changes dramatically as it is passed on from one person to the next. But business is not a game of telephone. Facts and information can’t change as they move from person to person, department to department or software program to software program. Facts and figures need to engender absolute trust, and that’s why having a single source of truth (SSOT) is a critical building block for any successful enterprise.
For HR directors, reality has become far more complex over the past few years with the migration of information systems to the cloud, the rise of the gig economy and remote working arrangements that began during the Covid-19 pandemic — and will certainly outlast it. The complexity is only increasing as more companies go global, hiring individuals and teams in other countries as they compete to attract and keep the best talent.
Too many HR professionals have struggled to keep up — and maintain the all-important SSOT —because their human capital management (HCM) software systems were built for the past when important processes took place on-premises, companies mainly hired locally and employees started their day by clocking in at 9:00 a.m.
That’s not the world we’re living in anymore. Fortunately for HR teams, technology and human expertise are available to not only help them cope with change but to stay out in front of it and thrive.
Managing Human Capital In The Future
In 2005, Pulitzer Prize-winning author and commentator Thomas Friedman published The World Is Flat, the book that outlined just how global business had become. When it comes to commerce, he said, international borders are not the barriers they used to be.
Those borders are even less of an obstacle today than they were in 2005, especially when it comes to hiring the best talent. Companies do not want their recruitment efforts to stop at the border, but rather want to fish from the largest possible pool of candidates. And the pandemic — which has illustrated how much important work can be done remotely — has only made the world “flatter.”
HR professionals will increasingly be tasked with streamlining processes and keeping important information intact even as their workforce grows to include individuals and teams in overseas locations. But this doesn’t have to mean setting up a new HCM system for every new location or mastering the laws, regulations and customs of these countries. Companies can leverage new technologies and partners to expand overseas with minimal friction while easily maintaining a single source of truth for a growing body of information.
The Reimagined HCM System
HR directors need HCM systems that flex to accommodate a workforce that is increasingly global, and one that includes a growing number of remote workers. This functionality can be achieved with a two-tier system.
The HCM platforms that are most widely used today serve many purposes adequately, provided they only need to cover employees in the U.S. and large headcount countries, where it is cost-effective to implement and maintain. When hiring a small team in other countries, HR directors must handle talent acquisition, onboarding, compliance, benefits administration, payroll and proactive strategic HR planning. These are typically the countries where they are likely unfamiliar with local laws, regulations or customs. This means possible exposure to fines for non-compliance with local laws.
To gain full visibility across their workforce, HR directors like the HCM systems they use to manage the workforce in their home locale. Fortunately, for international employees, that does not necessarily mean cobbling together multiple new programs. Instead, HR departments can add a second tier that plugs into the system they already leverage.
Second-tier systems like these handle every aspect of HR — including compliance and payroll — and some of them really are built to manage a global workforce. Adding another tier to the HCM system that is already used and trusted means far easier expansion to any country.
The Human Element
No problem can be solved entirely with technology though. Most problems also require a human touch.
Some of these problems come into play when companies go beyond hiring individuals or small teams and decide to penetrate new markets by establishing more of a presence there, even opening new offices. In such instances, the right HCM system is a good first step, but there are a number of issues — for example, whether or not it is necessary to set up an actual legal entity in another country — where only human expertise will suffice.
That’s just one of a number of questions that companies must grapple with, and for each company that answer will be different, as it is contingent upon the company’s long-term goals with overseas expansion.
Some organizations already have an overseas presence and can partner with an HR department to be their “boots on the ground” to handle benefits administration, compliance and other ongoing HR functions in local jurisdictions. These organizations can also help guide important decisions, for example, the best course of action based on growth plans.
Leveraging the right kind of partners and technologies is more important than it has ever been for HR teams because the pace of change will not slow down. Companies will continue to look overseas for the talent they want, and HR directors will increasingly be asked to bear the brunt of managing multiple jurisdictions.
HR teams can preserve information consistency while spearheading a frictionless and comparatively simple international expansion. It doesn’t have to be like a game of telephone.
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