The latest generation of cloud HR solutions are offering mid-sized and growing global companies the opportunity to connect employees and streamline human resources management in a way that simply wasn’t affordable before.
We know that one size does not fit all when it comes to managing HR on an international scale, but it still comes as a surprise to many HR teams implementing a global HRIS for the first time, just how different it really is.
Based on decades of experience implementing global HR solutions for companies large and small, we’ve put together a list of some of the main challenges you’ll come up against – and why it’s important for you to choose an HR system that can manage these cultural and legal differences as you expand internationally.
National and regional public holidays
It’s pretty obvious that every country has different official public holidays that you’ll want your system to “know about.” It’s especially important when it comes to booking paid time off, or filling in timesheets. However, there are countless different holidays that apply to employees working in specific regions, or cities, around the world.
For example, in Bari, Italy, employees are given a day off to celebrate the birth of Saint Nicholas, their patron saint; in Andalucía, they get an extra public holiday to commemorate becoming an autonomous region of Spain… and the list goes on. If your system doesn’t let you associate employees to specific geographic areas and set up local calendars to match, you’ll end up wasting hours manually adjusting individual employee records, and recalculating entitlements.
Variable working hours during the year
In countries where the summer is unbearably hot, the working day is often adjusted so that employees work longer hours in the cooler, winter months, but have a shorter day when the temperatures soar. In Spain, this is known as horario intensivo and it’s a pattern our office in Madrid follows. If you are relying on your HR system to calculate paid time off entitlements based on working time patterns, you’ll need to be sure it can cover this level of complexity.
Multiple leave entitlements
In countries like the US and UK, employees tend to have just one paid time off plan (although it’s usually accrued differently – and the UK has separate entitlements to paid sick leave). However, other countries have legislation that awards additional paid leave in relation to length of service, or parental responsibilities, which employers are either obliged to make sure employees take – or are paid in lieu of. It’s often the case that these entitlements are accrued differently.
For example, in Italy, our employees have two holiday plans, one accrued in hours, the other in days. For ease of management and compliance reporting, it’s essential to use a system that allows you to set up as many different absence types as you need, each with their own accrual rules.
It may seem obvious, but not every HR system is smart enough to recognize that employees in the US don’t start their working day at the same time as their colleagues in Spain, the UK, or Australia. When it comes to accurately recording and reporting on time off, or sending out alerts that are date sensitive, it can become a source of huge confusion if your system can’t tell which day the activity really belongs to.
European data protection legislation
The EEA has some very strict requirements when it comes to keeping sensitive information safe. If your data is hosted outside of the Europe Economic Area, or you are transferring data from inside the EEA to countries elsewhere, you need to be sure that you aren’t breaking the law. Unfortunately, since The European Court of Justice ruled that the Safe Harbour Agreement (that allowed the transfer of European citizens’ data to the US) is no longer valid, the rules are no longer clear, so make sure to watch this space.
In the meantime, if you are looking to transfer data, it’s important to ensure that you have model clauses in place, and your processes afford an adequate level of protection of personal data.
Local data protection
Different countries have different rules over what personal information should be gathered for reporting purposes. In the UK and Europe, some companies are obliged to provide information based on the protected personal characteristics of employees. You need to be able to gather and report on the data at a local HR level – while keeping it private from the rest of the business. In Northern Ireland, companies need to monitor the religious composition of their workforce, in France you cannot store ethnicity. It’s important to pick a system that gives you the level of control you need to restrict access to data on a country-by-country, or role-by-role, basis.
Operating in France? Then you need to be aware that, by law, French employees have the right to accrue two hours of training credits per year, up to a maximum of 120 hours. And they can ask to transfer unused credits to a new employer when they leave. Other countries may be less prescriptive about the training you need to provide, but it’s still handy to look for a system that lets you define entitlements to more than just paid time off, and lets you track how that time is used.
Date and number formats
To be sure that your new HR system is used to its full potential, it’s important that it feels as familiar as possible to your employees. Obviously, starting with the local language is ideal, but some of the differences you need to accommodate go deeper than that. For example, your UK employees are likely to feel they’ve landed in a foreign country if they are asked for their ‘zipcode’ instead of their ‘postcode,’ and they’ll be even more confused if they see dates in the US format – as will most of the rest of the world. Some systems relate data formatting to language, but that’s often too simplistic. For example, you’ll want Spanish speakers in the US to see the US date format (mm/dd/yyyy), while those in Spain should see it as dd/mm/yyyy.
Abbreviating names is common worldwide, Sam is easier than Samantha, Bill less of a mouthful than William. In Portugal, it’s normal to have one or two first names, and up to four surnames, all of which you’ll need to hold in your HRIS, so you can include them in any legal documents you generate. Like the rest of the world, Portuguese employees will be perfectly happy (and probably prefer) to be “known as” something considerably shorter when it comes to their personal profile, or email address. The trick is having a system that can record all that’s needed, but enables the personal touch. This could include using both the western and non-western version of the same name, so make sure the system supports non-western character sets, such as Chinese.
Different countries’processes often need to be managed in different ways. This can be because “it’s the way it’s done here,” but it could also reflect availability of resources. For example, there could be an expectation among employees in one country that a performance review must be with the most senior manager, whereas in other parts of your business, involving the team leader is a better way of managing it. Or, maybe you want HR to approve the sick days in one country, but have a regional manager sign off on it elsewhere. To avoid confusion, and keep processes flowing, you’ll need a system that lets you route these kinds of activities in the way that works best for you.
If you are relying on your HR system to generate information for payroll, or provide you with enterprise-wide reporting on salaries, bonuses, benefits, pension contributions and everything else that makes up your employees’ total compensation, then you’ll not only need to be able to record the pay elements in the local currency, but convert it to a base currency for reporting. Having the system do it for you is much simpler than having to manage it all in spreadsheets.
Faced with all of this complexity, it may be tempting to just carry on running your international HR operations using local HRIS solutions, glued together with labor-intensive spreadsheets. However, with flexible, global, cloud HR software now available at a fraction of the price of older enterprise applications, there’s never been a better time to take a global perspective on your employees, and reap the benefits of global HR software for your team.
Any other difficulties you’ve experienced with going international? List them in the comments below!
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