Global human resource management (HRM) is the coordination and administration of human resources (HR) functions in an international context.
When a company operates worldwide, global human resource management includes all aspects of the organization's HR, payroll, and talent management processes.
GHRM administrators must determine how to deliver HR capabilities internationally, addressing each country's unique cultural, legal, economic, and political factors.
What are the key functions of global HRM?
Some common and critical aspects of global HRM include the following:
Staffing and talent acquisition
Global HRM administrators identify and recruit international talent to meet the company’s workforce needs. They must address any challenges related to HR sourcing, recruiting, global hiring, and onboarding employees from diverse cultural backgrounds.
Read more: Can a U.S. Company Hire Foreign Employees?
Training and development
Global HRM includes developing training programs for foreign employees that consider cultural differences and language barriers. These opportunities must also enhance the international employees’ skills and knowledge of their job roles and company objectives and goals.
Compensation and benefits
Global HRM administrators must develop compensation structures and global employee benefits that align with the local market conditions while maintaining global consistency and fairness across the company.
Their global payroll and compensation strategy must address varying tax implications, currency fluctuations, labor compliance, and other financial considerations related to global compensation.
Employee relations
Global HRM also develops employee policies and management practices that comply with local labor laws and regulations. These policies must also navigate any cultural differences in employee relations and workplace dynamics.
Global mobility and expatriate management
Another component of global HRM is managing a company’s global mobility programs, such as expatriate placements or employees on short-term and long-term international assignments. Global HRM managers must address immigration requirements, challenges, and support needs of employees relocating to new locations and working in foreign countries.
Legal compliance
Labor laws vary significantly from country to country, so global HRM managers must ensure compliance with the diverse and complex regulations and employment practices across different countries. Global HRM administrators must manage the legal risks associated with international employment.
Diversity and inclusion
Global HRM can also implement strategies to promote diversity and inclusion for employees at a global level. Global HRM administrators help companies foster an inclusive workplace culture that values diversity, respects cultural differences, and encourages collaborative norms and practices.
Strategic planning
Global HRM policies and practices support the company's international expansion objectives while aligning HR strategies with the organization's overall business goals.
Why is global HR management important?
Global HR management is crucial for companies operating on an international scale. Companies seeking to optimize their international reach, support foreign employees, enhance organizational performance, and navigate the complexities of foreign labor laws must have an effective HR management strategy.
What challenges does HR face when managing a global team?
Global HRM managers must have a deep understanding of cultural nuances, legal frameworks, and effective communication across diverse teams and locations. However, navigating different countries' cultural, legal, and operational aspects also presents unique challenges for global HRM administrators.
Some key challenges HR may face when managing a global team include:
- Fragmented and varied international HR systems, information, workflows, and vendors
- Inexperience setting up HR infrastructures in new markets
- Difficulty managing ongoing HR obligations outside of the home country
- Ensuring compliance with diverse labor laws and regulations across different countries
- Adhering to various data privacy regulations and protecting data privacy
- Understanding local market conditions
- Maintaining equity across distributed workforces while ensuring compensation packages are competitive and compliant in each market
Global HRM FAQ
The below information discusses frequently asked questions related to global human resource management.
What is the difference between HR and global HR?
While global HR management focuses on all aspects of HR administration for multinational companies and their international workforce, HR focuses on all aspects related to managing human resources in a local context.
HR includes general functions such as recruitment, hiring, onboarding and training, compensation, and benefits administration. HR also ensures compliance with applicable local or national laws and regulations.
Human resource management is essential to any company’s operations and success, regardless of whether the company operates domestically or globally.
How does globalization affect human resource management?
Globalization directly affects how a business manages its human resources. If a company seeks to build and manage a remote workforce overseas and expand globally, it must equip its human resources functions to ensure effective and compliant management on an international scale.
Simplify global HRM with Velocity Global
The transition to global human resources management can be daunting, which is why a global employer of record (EOR) partner like Velocity Global can help your business on the path to international success.
Whether you are in the planning phase or ready to make your next international move, our team of experts can guide you through strategic market assessment, regulatory considerations, global hiring protocols, and cultural nuances. We’ll help you assess talent and business environments, analyze the costs for your distributed workforce, and tailor contracts and compensation strategies to fit your talent needs.
Contact Velocity Global today to get started.
