Managing differences: the central challenge in HR Global Strategy

Alfredo AmoresTalent Management & Training International HR Executive

es.linkedin.com/in/alfredoamores - @AlfredoAmores

Managing Differences: The Central Challenge in

HR Global Strategy

Operational Excellence in Human Resources Summit, Barcelona 2015

“Managing Differences: The Central Challenge in HR Global Strategy” Alfredo Amores Operational Excellence in Human Resources Summit, Barcelona 2015

Understanding how global we really are


The global reality check

25%

7%

10%

20%

20%

35%

3%

17%

1%

21%

15%

2%

2%

17%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Bank deposits

Charity

Direct investment

Equity investment

Exports

Government debt

Inmigrants

Internet traffic

Mail

News media

Patents

Telephone calls

University students

Venture capital

internationalization levels

(*) World 3.0: Global Prosperity and How to Achieve it, Pankaj Ghemawat 2011

Differences matter



Cultural Administrative

Economic Geographic

CAGE distance framework (*)

(*) Prof. Pankaj Ghemawat - IESE

Language Etnicity Religion Work systems Tradition Values, social norms,

and dispositions

Colonial ties Trade agreements Currency Legal system Government policies Political hostility Visa and work permit

requirements Corruption

Physical distance Common land border Time zones Climate Landlockedness Transportation Communication

Per capita income Cost of labor Avaliability of human

resources Organizational

capabilities Economic size

C A

E GCulture differences matter in HR


Language

Diversity

Employee selection(Give more emphasis

to social class, or to education)

Evaluations(Focus on compliance,

or on performance)

Compensation(Wage differences between managers

and workers are larger or shorter)

Leadership(More authoritarian, or more participative)

Motivation(Based on that subordinates dislike work: more coercive,

or more reward-based)

Organizations(More hierarchical and regulated,

or more flat and flexible)

Change management(Tell subordinates what to do,

or explain the reasons for change and involve employees)Management by objectives

(Short-term oriented, or more longterm oriented; individual contributions, or group contribution)

Administrative differences matter in HRC A

E G


Labor union power

Protection of workers duringcollective disputes

Social security benefitsEmployment contracts

Diversity and inclusion

Labor relations

Personnel administrationTaxes

Payroll

Expatriates

Health & Safety

Collective agreements

Outsourcing regulation

Employee classification

Schedules

Holidays

Currency

Subsidies

Visa and work permit requirements

Geographic differences matter in HRC A

E G


Physical distance

Where to localize HR people

Remoteness

Time zones

Communications Transportation

Size of the country

Climate Diseases

Economic differences matter in HRC A

E G


Labor costs

Avaliability of qualified human resources

Standard of living

Per capita income

Organizational capabilities

HR budget

Suppliers of HR services

Access to internet

Market competitiveness(compensation)

Minimun wage Subsidies

Strategies for dealing with differences



What are our globalization options?

Adaptation (to the differences of

the countries)… to achieve local responsiveness

Aggregation (exploitation of

similarities)… to achieve greatereconomies of scale

Arbitrage (exploitation of

differences as opportunities)… to achieve absolute economies

Cultural: locate the corporate university facilities in BolognaAdministrative: locate global payroll department where tax and labor laws are more advantageousGeographic: move the workplace to other geography in order to “get rid of” staff that is no longer valid for the new challengesEconomic: locate global HR information system department to access highly skilled workers at lower cost

Cultural: translate elearning trainings to “International Spanish” for all Spanish speaking countriesAdministrative: manage expatriates globallyGeographic: locate training facilities where there can be more attendeesEconomic: subsidize the use of a common HR information systemin poorer countries

Cultural: translate elearning trainings to local languagesAdministrative: make payrolls locallyGeographic: provide labor advice locallyEconomic: adapt compensation policies according to local marketcompetitiveness

Case Study “Managing Global

Training Programs”



Managing Global Training Programs

Adaptation (to the

differences of the countries)… to achieve local responsiveness

Aggregation (exploitation

of similarities)… to achievegreater economies of scale

Arbitrage (exploitation of

differences as opportunities)… to achieve

absolute economies

Cultural Administrative

Economic Geographic

Translation to languages (adaptation or aggregation)

Cultural adaptation oraggregation

Work systems adaptation oraggregation

Change management Use prestigious providers User friendly tools Competences 80% common

Legal, regulatory and technical adaptation

Calendar adaptation Easy to implement training

solutions Build training contents in a

modular way Centralization or support in

the course management

Local or regional trainershomologated

Global training providers Training contents 80% global Schedules adaptation or

aggregation Locate training venues in

“close in travel time” places Elearning, webinars, and 2.0

communities ox expertise

Previuos leveling courses Move trainers Negotiate fees globally Subsidize the cost of the

training Provide training facilities Support in the course

organization Outsourcing to cheaper

countries the development of elearning contents, callcenters and otheradministrative tasks

How leading organizations are doing to "globally localice" the

HR function


A distributed form of HR is possible

(*) High-Impact HR in a Globally Local World,

Bersin by Deloitte 2013

Expert, specialized HR professionals

located CLOSE to the business

DISTRIBUTED HR program designand delivery, to

be tailoredlocally, by local HR people withcentral support

AGILE and ALIGNED HR

operations, with optimized HR

processes, and measurement of utilization and ajustment to local needs

Evidence based practice and DATA-DRIVEN

decision making

COMMUNITIES of HR expertise in order to work

collaborately to provide

standards and scalable high-

value processesCulture of

EMPOWERMENT in the HR team,

with authority to “call the shots”

BUSINESS-DRIVEN HR

leaders, thatunderstand thebusiness, hold

accountable, and measure impact & effectiveness

HR teams coordinated

through COMMON

HR platforms and standards, that can include local or cultural

needs


Managing Differences: The Central Challenge in HR Global StrategyAlfredo Amores. Talent Management & Training International HR Executivees.linkedin.com/in/alfredoamores - @AlfredoAmores

Operational Excellence in Human Resources Summit, Barcelona 2015

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Managing differences: the central challenge in HR Global Strategy