Linking: Global Staffing
Author: Hugh Scullion
Paperback: 216 pages
Publisher: Routledge; 1 edition (April 19, 2006)
HR professionals in multinational organizations face many challenges as they attempt to master a global environment. In many HR areas, there is a great deal of resistance to designing and implementing global systems and policies because "people are different," "laws are different," and "labor markets are different." As the complexity of designing and implementing effective HR systems on an international scale cannot be denied, there are many areas where HR professionals have shied away from going global, preferring instead to implement local or regional solutions. However, a number of companies have successfully designed and implemented global HR systems and, as more organizations begin to operate on a global (or at least multinational) scale, the need for HR systems that can be used across multiple countries continues to grow.
Any HR system that is not accepted by employees cannot succeed. Four best practices that help to ensure the acceptance of global staffing systems within an organization.
1. Global Systems Are More Accepted in Truly Global Organizations than in Organizations Just Doing Business around the World.
Simply doing business in different locations does not make an organization global. Multidomestic organizations manage overseas affiliates as independent businesses while global organizations use resources developed in one part of the firm to create competitive advantages in another. Global staffing systems will be more acceptable in organizations where more functions and business units operate on a truly global basis. For example, the extent to which managers work on global teams, manage staff in other locations, and source hires globally increases the value of a global staffing system. As our consultant said, "today it really doesn't matter where you sit in Organization X- you click on a button and you're on the intranet and you know the whole world uses the same kind of processes...you talk to your colleagues all over the world every day."
According to Shell, "If you're truly global then you're hiring here [United States] people who are going to immediately go and work in The Hague and vice versa. So in essence you wind up in a global job market and the standardization [of staffing systems] ensures that you're applying the same standards and using the same tools to [obtain] the best candidates who are going to be part of a global community." At IBM, "The more tools we roll out globally, the easier it is to move our talent around the company."
Thus, global staffing systems are more easily implemented if employees are operating in a truly global rather than multinational organization.
2. Investigate Pressures to Differentiate and Determine Their Legitimacy.
Assumptions about the need to differentiate staffing practices across countries or regions are often unwarranted. Although differentiation is desirable and necessary in some instances, a key to creating a more global system is to make sure that the only bases for differentiation in tools or practices are legitimate ones.
Most "differences" do not really exist. Workforce planning leaders at Dow "get much more pressure to differentiate than there is to integrate. Every site thinks they're different. Every country thinks they're different. Every job within a job family thinks they're different. So, there's a lot of pressure to try to accommodate those perceived differences. In many cases those differences don't really exist." For example, when Dow wanted to institute Recruitsoft, an online application tool, in a particular global region, managers cited cultural unacceptability as a reason to resist using it. "Hiring managers beforehand said there's no way people are going to use this online tool...What we found is the number of applicants went through the roof when we went online and the quality of the applicants also increased. We got no negative feedback from the applicants...." As Dow also noted, "local culture is usually only evoked when people don't want to be bothered by something."
Make them prove they are different. When introducing an internal job posting system, Dow "... did not give the geographies an option in terms of how we rolled it out, other than we did roll it out with some language capability...." In the Pacific there would normally have been resistance to employees applying for internal jobs, but they recognized that without a global rollout employees in that region would have been severely harmed in their career progress relative to those in other regions. Dow puts the responsibility on the country or region for "demonstrating that they are, indeed, a legitimate exception ...and it must be data-based and dollar driven. And they generally cannot rise to that test."
Market-test new tools or systems. At Shell, U.S. hiring managers were initially resistant to some of the assessment-center tools commonly used in their European region. Cultural unacceptability to applicants was cited as a reason not to implement a global assessment system. Shell investigated the legitimacy of the claim by market testing the tools with potential applicants and found enthusiastic acceptance rather than negative reactions.
Be knowledgeable about legal issues. At Agilent, "Legal [issues] are often used to prevent changing things. And the best question to [ask] is to say, 'Tell me about the legal risk and what this risk would cost us.' Then you get better information... the term 'legally required' is often used to prevent any sort of questions." They also noted that each business wants to be treated specially, creating pressures to differentiate across business units, not just geographies.
IBM voices a similar concern. "There's sometimes a fine line between somebody saying this is the way we do it and this is what's legally required...because it's been done for so long and that's been a standard, people think that's the legal way, but actually there's no law in place."
Employ effective change management strategies. Several companies noted that cultural differences are often mentioned by HR staff and managers in regions with more highly developed selection tools and processes. For example, several of the companies contrasted introducing a tool in Europe, where well-established staffing tools exist, to Latin America, where the recent nature of their involvement in the region means no tools are in place. Resistance is greater when people don't want to let go of what they already have, and "cultural differences" are often brought up as an acceptable reason for not changing. There are also some cases where the desire to be different -in France or Germany for example-derives from a more general desire to preserve national identity. Resistance to global processes and changes may be greater in these countries not because the change is culturally unacceptable, but because the country will no longer do things in a unique way.
"Everybody thinks they are different, but this leads to tremendous re-work and duplication of effort for very small gains." P&G suggests focusing on "real differences, not preferences." However, "the hard part is defining what is a legitimate local issue and what's just a local preference or pattern of behavior that has existed." At P&G, they try to talk through the issues but don't allow "we have always done it this way, so we want to do it this way" to be a rationale for doing anything.
Be willing to differentiate where necessary. An organization should not globalize something in staffing simply for the sake of saying one has a global system or process. Companies should differentiate where there is a legitimate business reason to do so or on the basis of local law. Ask yourself if a global system really makes sense in a particular area. For example, at Agilent they ask, "Is it in the best interest of who our audience is? Is it in the best interest of the company at this point in time?" Dow has chosen to differentiate in the area of post-employment compensation (e.g., severance pay, outplacement) where local law and regulation as well as local practice mean that a global system does not make sense. P&G suggests differentiating only where there is a legitimate business need or "where the longer-term benefits outweigh the short term concession." They shoot for a goal of 85:15 or 90:10 ratio of standardization to customization.
3. You Can Consistently Implement Staffing Well. It Is No More or Less Difficult than Anything Else that Involves Individual Discretionary Judgment.
Allow a degree of individual discretion. While multinationals can smoothly implement global standards and processes in areas of manufacturing, quality control, and finance, HR remains an area where global implementation is seen as too difficult. One reason for greater resistance to global staffing systems is the "human factor." Managers tend to be resistant to anything that might override or lead to a different conclusion than their own judgment on a "people issue."
Managers can, and do, ignore staffing standards whether they are global or local. Resistance will occur if what you are instituting is interpreted as an abrogation of the power of the local manager. "If something you are doing is seen as...in some way impinging on a historical level of authority, then you're going to get resistance." P&G puts it another way: "Anything that looks like you're putting an assessment or a technology between a person's human judgment based on a relationship is suspect."
One key to successful implementation of a global staffing system is to allow sufficient discretion to satisfy hiring managers and other decision makers while not compromising the integrity of the selection system.
Don't force a global system on local people. Motorola suggests that many locations are not receptive to mandates or policies that force them to implement corporate tools or processes. Local hiring managers want to have tools that they feel are best matched to their culture. "I think everybody wants local norms, they don't want to be compared to the United States, they want to be compared locally for selection... it's their applicant pool really from which they draw." Motorola also suggests that the toughest people to convince are staffing or HR people because "it creates more work for them, since they have to source additional people...."
4. A Strong Corporate Culture Overrides Geographical Differences.
Each of the organizations had a strong corporate culture, which can help tremendously in efforts to develop and implement global staffing practices and tools, because individuals throughout the globe have a shared understanding of what is important in the organization. Across the world, past differences between cultures are slowly disappearing due to the degree of centralization of processes, information, and communications in which global organizations are participating. Thus, no matter where a company's employees may be in the world, they are exposed to a similar corporate climate. With a strong corporate culture, local culture doesn't amount to much of a difference. Although most systems, technologies, and processes may have been formed in the United States, a strong corporate culture, such as at P&G, can result in "unusual adherence to most directives." In addition, global organizations expose many managers to tools that may not be familiar to their country, but over time, become commonplace to workers in that location.
However, corporate culture can also result in greater difficulties in implementing global HR systems. For example, at Motorola, a long history of decentralized decision making leads to the company culture working against global standardization.
A number of best practices had to do with development of HR systems. These are also best practices were primarily related to flexibility in system design and global networking or relationships.
5. Develop a Global Network.
Build good relationships with local staff. A key to successful global systems is the development of a global network. Building a strong team, with a resolution of reporting, reward, and control issues up front is critical.
According to the consultant, the most critical factor for success is "creating an infrastructure of partners around the world that you use for support, for buy in, for organization of local activities, and to help you better understand their own systems and their own challenges" although too often this is viewed as a time- and resource-waster. Dow respondent noted, "You're really relying on the local people to tell you, 'Does this make sense....Will this work? Why not?' Those sorts of things that you can only do if you've really developed a very strong network and are able to communicate with people constantly."
Form global teams. In many companies, such as Agilent, the composition of global teams is particularly important. "For whatever reason, we always managed that we could have these partially ugly discussions, but we never lost the personal trust and faith in each other." Global teams formed for specific purposes (e.g., system upgrades) are particularly helpful in introducing HR staff to their counterparts in other regions and building good relationships.
However, global teams are not without great challenges in coordination and in decision making. Building the team for a global project may take much longer than it would for a U.S.-only project. Compromise may also be necessary in many situations in order to work as a global team or to develop tools that can be used globally.
Involve more people. One difference from global to single region HR system development is the inclusion of more people-seeking the input of more people than simply a representative sample. This is something that our best-practice organizations do extremely well. For example, at Agilent they believe that greater participation is key-with greater testing of systems "you get participation, you get buy in, and you get a better quality product". Dow tries "to include every site in [the job analysis] or at least give them the option of participating. When we do it in the United States, we just chose a few larger sites...." For example, the eight administrative employees in Korea were included in a validation study, not because of any psychometric value or because of any conclusions one could make about Korea but because inclusion in the process leads to acceptance of the outcome. Dow also includes sites that will not be hiring in the near future. "It's so important that they feel that this is truly a global process, not exported from the United States. And, the only way you can do that is involve them in the development process."
6. Treat Geographies as Equal Partners Rather than as Just Implementers.
Leverage local systems and processes. The multinational model is one of doing the design work in the United States and rolling it out globally; a global process involves looking at what everyone is doing globally and leveraging the best ideas. In the SIHRM literature, this is the contrast between exportive and integrative orientations. Shell has found that "the things that you learn by [considering] what is being done around the world just enrich the answer that you come up with. You wind up with something that's more than the sum of the parts." If one truly is using global input into a system rather than exporting, the final product should be better than what is done in any one country.
Gather global input. Another integrative approach is to develop a global team that has equal input into design decisions. An IBM respondent noted that "When it's global, people in the geographies are actually full members of the team...." For example, IBM projects that have been most successful are the ones where employees outside the headquarters country felt "an equal partner at the table right through the design, the development and the implementation".
The consultant pointed out that successful projects involve "partners in each one of the geographies and we worked with them from the very beginning to gather information and understand their philosophies, their policies, their practices, their processes...."
7. Measure the Same Competencies Globally but Allow Flexibility in Methods of Assessment.
Truly global organizations evidence some degree of flexibility in their global systems. As Dow puts it, "Philosophies generalize, but administrative detail often does not." While companies may strive to standardize tools globally, the critical point is to standardize what is assessed but to be flexible in how it is assessed. P&G states it this way: "Principles and guidelines can be effectively used. If policies become too prescriptive, they do not work and become very complex trying to accommodate variations caused by structural, legal, practice, culture, or organization differences. [You] need to provide an intent, principles, guidelines, examples, and then allow for reasonable variation."
Train people to make good decisions. Successful global companies focus on creating systems with some flexibility and then training people on how to make good choices. If you develop something very structured, it is unlikely that everyone will use it the same way. But if you train people how to make decisions and choices, based on an understanding of what is being assessed, then it can work well in different countries.
Use different tools, as appropriate. The same competencies, knowledge, skills, etc. can be measured in different ways while still maintaining a global standard. For example, at Dow, teamwork is an important competency in a number of job families globally; however, it is not measured the same way around the world. Instead, measures are used that are culturally appropriate and have local norms-sometimes even locally developed measures are used.
Agilent noted that "we didn't put the kibosh on globalizing templates" because of requirements in Canada regarding presenting information in French. Instead "we put a work-around in place for Canada that was specific to Canada. But we still have the global practice in place."
The need for different tools in different locations is sometimes driven by a lack of existing or appropriate products. Off-the-shelf products or tools need to be chosen not because they are the best, but because they are the best that can be used worldwide. The evaluation of a tool is not just its ability to predict job performance, but issues such as cultural interpretations and appropriateness across cultures, existence of translations or ease of translation, availability of norms for different populations, and delivery and invoicing capability across countries. Both Dow and Agilent have experienced difficulties in finding partners who could work globally. Many vendors or test publishers claim to be global, but a deeper look reveals they are not capable of delivering a product on a global basis.
Use different processes, as appropriate. IBM provides process components that are the same across the globe, but details such as who conducts the interview (e.g., hiring manager versus recruiter) or whether the prescreen is by phone or in person, differ by country. IBM also mandates use of a toolkit, but not which tools to use. "They chose as a country which tools of the toolkit they use and that's what gets mandated by the country."
"You will screw up if you try to be global on everything." As one goes down in levels of detail, the set of universals becomes less. "It's all a matter of picking where do you break off trying to inflict a specific policy or process and move [instead] to guidelines and templates." However, when offering a tool or benefit (e.g., interviewer training, employee assistance programs), there are quality standards that must be adhered to globally if one is going to offer that tool or benefit.
It is often best to do as P&G does and let "local HR employees representative of their own cultures shape and manage the direct execution in ways that reflect the cultural sensitivities".
8. Focus on Commonalities in Designing Tools and Allow for Regional Additions.
Aim for a global system but be flexible regarding local additions. Focus the design for a global selection system on commonalities across countries. However, if a job analysis indicates something is really important in one region or country but not in others, then include a measure of this particular skill or ability just for that region or country. For example, at Dow, employee groups in a number of countries in the Pacific are very small, prohibiting the translation of all corporate manuals, policies, and so forth into the local language. For those countries, a test of ability to read English is part of the selection system, whereas it is not in other non-English speaking countries with larger employee groups.
At Agilent, the two things they focus on in designing global tools are (1) what is the candidate's experience? and (2) what is the hiring manager's experience? Getting the global team to focus on those leads to a focus on commonalities across regions.
According to the consultant, "The core of the process can be global, but then again you have to understand how different countries... have different regulations and laws that they have to adhere to" and allow for additional requirements.
9. Allow for Integration of Global Tools into Local Processes.
Don't impose a new process-offer a specific tool for local adoption. There is a consultant suggested "working with the local people to help them integrate it [new global tool] with what they have-with their own processes. You don't want them to break all their tools and all their practices, but help them to see how your tools or program or practices fit into what they have or help them make any adjustments that are needed to make it work for them."
Many companies find themselves in a situation where the local organization plans to implement a system, tool, or process regardless of whether or not it fits with the global system. Best practice companies, such as Motorola, handle this by building a system for the local organization that includes the nonrecommended components but weighting these very low to minimize their influence on hiring decisions. "Anything that's been done locally I would try to not to just reject it outright but to be sensitive to the fact that those people are still around that have brought it in and [try to] integrate it or minimize the impact of something that's really not all that good."
10. Work from a Universal Set of Value Principles and Design Integrative Processes to Support Them.
In line with the notion of a strong corporate culture overriding national boundaries, widely held corporate values can aid in finding commonality on a global level. For example, at Dow the "philosophy of treating individuals with respect is a universal ... [so] we are able to have a global selection and a global separation process." There are local nuances because of works councils, unions, U.S. labor law, and so forth, but the values drive the similarity in process. Dow notes that integrity is one of their fundamental tenets; thus, global process is secondary to abiding with the law.
In another example, at P&G, a basic value of the company is to hire at entry level and promote from within almost exclusively, and this drives all strategies. Shared values for staffing enable integrative processes to be designed.
11. Cultural Differences Are Not Impediments to Having Global Systems, but Ignoring Them in the Process of Designing a System Will Lead to Failure.
While all companies felt one could design global systems, many provided examples of the importance of considering how culture impacts interactions throughout the process of developing a system. Even after preparing to work cross-culturally and giving training and having a cross-cultural psychologist as a technical advisor, the understanding of the need to be open to differences does not come easily. Becoming a "scholar of culture" through working globally, as well as continuing to read about and study a culture. The differences impact everything that you do, every activity, every phone call, every meeting. Differences across countries extend beyond just those of interpretation to include such factors as governmental regulation and education systems. Thus, it is critical to understand the many different cultural systems that influence the feasibility of designing and implementing new practices or policies.
The best practices in implementing global staffing systems. While the essence of these four practices might be important considerations for any local effort, their importance increases when going global.
12. You Can't Communicate Enough.
Communication is certainly part and parcel of any implementation effort, but the level of communication needed for global projects presents great challenges. There is a need for constant contact with the decision makers in each country, as well as the people who will be implementing and using the system, and current incumbents in the jobs for which you will be hiring. As Shell states, one should "get face to face and do that early and do it often, and maintain those personal relationships among people who are responsible for policy and for implementation around the world".
13. Harnessing Technology Effectively Can Enhance Global Delivery, but You Must Consider the Level of Technology Investment and Global Access.
Technically sophisticated tools are frequently used in staffing processes. Companies such as P&G believe that "Technology is an essential enabler. Companies that do not embrace changes in technology will be left behind as the global talent pool becomes more mobile and changes in demographics and skill capabilities drive more intraregional staffing needs." However, companies must also be cautious about attempting to implement the latest technology on a global basis.
Use technology only where it makes sense. "It's a misconception that computerized testing is an advantage...it's appropriate in some situations, but it's certainly not-and [Motorola] gets this feedback all the time from our staffing people-it's not for group testing. It gets pretty difficult and costly with the hardware." On the other hand, "technology might enable better standardization globally."
Shell "... found the technology to be more of a hindrance than it is an enabler....technology, at this point, has not assisted us in our recruiting. We think that long-term it can and it should." Furthermore, "if we actually determine that the technology is a hindrance on a global basis, the preference would be to go to state of the art regional solutions."
Technology can make things harder. Most online tools (e.g., interviewer training) need extensive supplementation, requiring more development than a traditional tool. For example, Dow has found that creating global reports can be challenging, even with the same technology, as there are local and cultural differences in what things are labeled and what gets entered into a system as data. "Technology does not make global simpler, it makes it a lot more difficult."
14. Put in Place a Geographic Infrastructure.
Global networks are necessary for implementing global systems, but organizations vary in the size and extensiveness of their geographic HR structures. There is a general recognition of the usefulness for some geographic representation in the mix. Regional HR counterparts can go in and find out what needs to be done and can also do all of the essential legwork. Having people in geographic region roles, and having country HR individuals who have experience at a geographic region level, leads to a different way of thinking and a lot more buy in to consistent processes. Shell notes that it helps to have "a global practice leader who has the authority and the will to create the environment for integration and for collaboration, or you need a really strong sort of center-of-excellence kind of leader."
15. Dedicate Resources for Global HR Efforts.
As with any HR effort, resource issues are important to globalization. It is often difficult asking HR in countries to do things (e.g., job analyses, data gathering) that take up their time, especially where they do not have extra resources for staffing research and development. The lack of infrastructure outside of the headquarters country may also create greater challenges in working with timetables.
Have a geographic HR budget. The lack of a global staffing budget makes a great challenge to working as if one were global rather than creating something in one location and offering it to others to pick up. "Some countries can pick things up because they've got the money and other countries can't...so if we want to be global ....you have to have a geography budget. Otherwise, you know, smaller countries just can't participate." (IBM)
In summary, designing and implementing global staffing systems is a challenge, but an integrative approach enables companies to be better at staffing around the world. The best practices outlined here represent the collective wisdom of a great deal of experience with a wide variety of staffing practices and tools and in a wide variety of countries. None of our respondents expressed any lessening of "global approaches"; instead, many talked of plans for going global for other job families, with other tools and in other aspects of staffing.
Note that the above analysis focused on best practices for designing and implementing staffing systems, rather than on best practices in terms of specific tools or criteria for hiring. Researcher analyzed hiring practices in 10 countries and concluded there is a trend toward convergence in what are considered best bases for assessing qualifications and what qualifications to assess, but there are considerable differences. There are scholars noted that advances in IHRM will not occur by examining single practices outside of their multiple embedded contexts; the analysis shows that global staffing designers are aware of polycontextuality, as they develop global staffing systems that have commonalities but allow for regional differences.
While some elements of the best practices for system acceptability, development, and implementation hold for local or regional staffing systems, they remain critical elements of a successful global effort. The cases here have enacted these practices-sometimes in hindsight after less successful efforts-to be able to create truly global staffing systems. As organizations become global and not just multidomestic, the advice herein is of great value to the staffing professional.
This book provides a multi-disciplinary, integrative and critical discussion based analysis of current and emerging issues in global staffing. It critically examines best practice and leading approaches, drawing on research from a range of disciplines including international strategy, management, HRM and organizational theory. It also considers the growth of inpatriation and the impact of emerging markets on global staffing practices. Unlike other texts in the area, this text takes a truly international approach that is integrated, extensive and critical, thus allowing reader of HRM and international business an indepth understanding of the processes of global staffing.
~Cited from Ann Marie Ryan, Darin Wiechmann, Monica Hemingway. Human Resource Management. Hoboken: Spring 2003. Vol. 42, Iss. 1; p. 85-94.