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How Four of the World’s Largest Employers Manage Their International Workforces

By November 12, 2020No Comments
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International expansion allows companies to reach new customers, hire employees with unique skillsets, increase revenue, and build a global brand. But operating in multiple countries also presents an array of challenges—from maintaining a healthy company culture across international offices to creating consistency while allowing for cultural differences.

This post examines the global workforce management practices of four of the world’s largest employers: Walmart, Amazon, Volkswagen, and Berkshire Hathaway. Read on to learn how these companies expanded internationally—and how they overcome the challenges that come with overseeing an international workforce.

Walmart Uses Technology to Optimize International HR

With 2.2 million employees across the globe, Walmart employs the world’s largest workforce.

Founder Sam Walton opened the first Walmart store in Arkansas in 1962. Walmart began its international expansion by opening a store in Mexico City in 1991. By 2002, Walmart had entered Canada, China, and Japan, while topping the Fortune 500 list of America’s largest companies. The retail giant now employs workers in 27 countries worldwide.

While Walmart maintains a centralized company HR strategy, the company empowers its regional HR directors to customize their approach to account for local differences—from cultural and religious expectations to local labor laws. This approach helps Walmart deliver consistency across the world while providing local HR leaders the flexibility to accommodate their workers’ unique needs.

Walmart relies heavily on data-interpretation software to assist its HR processes. By collecting and analyzing data from every store across its vast global network, the company allows HR to forecast how demand for workers changes with evolving circumstances, such as market conditions or seasonal patterns.

Walmart also uses technology to refine its internal employee assessment systems. The company implemented a digital tool that helps managers and employees set goals and track progress in real-time. “We want to be able to identify potential in our people, give them the tools to do their job really well, and let that potential shine,” says Jacqui Canney, Walmart’s Chief People Officer. Through technology, Walmart identifies what its employees and stores need to succeed—no matter where they work.

Amazon’s “Two-Pizza Rule” Streamlines Global Teams

In 2019, Amazon employed just over 630,000 workers. Spurred by a dramatic increase in e-commerce while much of the world went into lockdown during the COVID-19 pandemic, Amazon’s workforce grew to one million in 2020.

Jeff Bezos founded Amazon in 1994, taking the company public just three years later. The following year, Amazon began selling in the United Kingdom and Germany, which today rank as the company’s two most profitable international markets. Today, Amazon operates offices in over 30 countries across the world.

Amazon offers a wide range of services, from online retail and digital streaming to artificial intelligence and cloud solutions. As a result of its varied offerings, the company must hire workers with highly specialized skill sets. Managing workers with diverse capabilities and responsibilities adds to the inherent challenges of overseeing a global workforce.

To simplify the management of its international employees, Amazon concentrates workers into smaller, more focused teams. The company practices a “two-pizza rule,” in which meetings should not include more employees than two pizzas can feed. In doing so, Amazon improves efficiency and limits bureaucracy while empowering workers on an individual level.

At the same time, Amazon unifies its global teams by significantly investing in its organizational culture. The company consistently holds trainings to keep employees aligned with its overall business philosophy, values, and strategy. Furthermore, Amazon invests in programs that help employees learn the technical skills necessary to grow within the company.

By promoting cohesive company culture, breaking employees into small teams, and providing career-accelerating training programs, Amazon keeps employees engaged—and increases their likelihood of staying with the company long-term.

Volkswagen Refocuses on Company Culture Following Adversity

Volkswagen Group employs over 670,000 workers spread across 31 countries, giving it the largest workforce of any automaker worldwide.

Volkswagen launched in Germany in 1937. The company began its international expansion by exporting vehicles across several European countries in 1948. The following year, Volkswagen founded its financial services division to help customers buy and lease its automobiles. Today, the company sells vehicles in 153 countries worldwide while providing financial services related to auto insurance, banking, fleet management, and more.

Volkswagen is well-versed in the challenges that come with managing a large international workforce. In 2015, the automaker admitted to falsely passing emission tests by altering diesel engine software in 11 million vehicles. Volkswagen’s misconduct cost the company over $37 billion in noncompliance fines and caused employees to lose trust in the company.

To counteract the diminished morale of its workforce, Volkswagen vowed to implement “more transparency, more accountability, and greater tolerance of errors,” according to Chief Executive Herbert Diess. Volkswagen took several steps to deliver on these goals, including:

  • Instructing senior management to discuss the scandal openly with lower-level employees.
  • Holding numerous discussion sessions about the scandal and increasing training programs for employees.
  • Revamping its whistleblower program to reflect the international nature of its workforce. Before the scandal, Volkswagen only offered the program in two languages. Now, it accommodates 19 languages, allowing 90% of Volkswagen employees to report issues in their native language.

Thanks to these improvements in transparency and communication, Volkswagen employees report increased satisfaction in working conditions, company culture, teamwork, social awareness, and more.

Berkshire Hathaway Flourishes With a Decentralized Structure

Berkshire Hathaway is a Nebraska-based holding company with multiple international business interests and over 390,000 employees worldwide.

Berkshire Hathaway began when two Massachusetts textile companies merged in 1955. Present-day CEO Warren Buffett bought Berkshire Hathaway in 1965, gradually shifting its focus from textiles to acquiring a diverse array of other businesses. Today, the firm owns companies such as GEICO, Benjamin Moore Paints, and Duracell, along with self-created entities like Berkshire Hathaway HomeServices.

Berkshire Hathaway’s international workforce management strategy is tied closely to Buffett, whose business acumen has earned him the nickname “the Oracle of Omaha.” Buffett holds his workforce accountable to general guidelines rather than strict expectations. “We count very heavily on principles of behavior rather than loads of rules,” Buffett said at a shareholder’s conference.

Buffett’s approach informs the company’s decentralized structure. Berkshire Hathaway employs only 25 people in its headquarters in Omaha, putting significant trust in the leaders of the company’s worldwide entities. By distributing decision-making responsibilities to executives who best understand their own companies, Berkshire Hathaway empowers its subsidiaries’ leaders—and keeps its central operations lean. Salaries and operational expenses at company headquarters total only about $10 million annually, compared to the roughly $250 billion revenue the company generates each year. As a result, Berkshire Hathaway minimizes business costs while empowering the leaders of its worldwide teams.

Simplify Global Employee Management With an International Expert

Managing an international workforce presents challenges for even the world’s most established businesses. Though larger companies have more employees to oversee, they also have more resources to address management issues. That’s why smaller companies looking to grow internationally benefit from partnering with a global expansion expert.

Velocity Global helps companies of all sizes expand into over 185 countries worldwide. Whether you need help charting your expansion strategy, managing international payroll, establishing a foreign entity, or more, we are your single-source provider for every global growth initiative. Reach out today to learn how our expertise can streamline your expansion.