However, multinational companies that, more broadly, invest in training their employees in emotional intelligence and empathetic listening skills can create a workforce that’s better equipped to recognize cultural differences and successfully resolve any conflicts that may arise. And that can help create an environment where existing employees, new hires, clients, and customers from different cultures feel respected and appreciated. Wise (2005) found in a study of line managers and human resource managers in two financial services organizations that there were tensions between implementing formal work-life policies versus informal and discretionary practice. In this case, although HR had taken a strategic approach to developing a policy related to employees taking time off for dependents, there was considerable variability across the two organizations operating under the same corporate policy. Synthesis is arguably more likely when the management allows ideas to percolate up from far-flung operations, which is arguably more consistent with a decentralized and contextual/institutional approach.

  1. This includes a robust review of local labor laws (including hiring and firing practices) and adherence to break times, parental leave, and retirement plans.
  2. As such, there needs to be a significant level of human resources (HR) expertise applied to your approach.
  3. A major advantage of these temporal separation policies is that they allow for feedback and learning over time.
  4. Legislative differences may in part reflect cultural differences, and those differences could similarly drive a wedge between the effectiveness of any specific work-life policy or practice across nations.

If you’re paying someone in one country more to do the same job as someone in yours, be ready to explain and justify cost of living differences. Just as the United States has federal, state, and local laws regarding minimum wage, overtime, PTO, etc., so too do other countries, and they can vary (sometimes greatly) from locale to locale. People Builders is an exclusive community that serves the needs of People professionals and leaders dedicated to building people-centric organizations in a globally distributed world of work. For example, HR managers must consider how a company’s high-level strategy is shared and communicated with everyone if the C-suite executives are all based in one region or country. An alternative synthesis approach lies in incorporating work-life discussions into annual reviews, thereby combining evaluation along other metrics with work-life.

Human resource management transfer challenges within multinational firms: From tension to best-fit

Project management tools, like Asana, and communication tools, like Slack, are equally important for promoting cross-team collaboration. They provide company-wide visibility into projects and conversations that impact multiple departments. Messaging platforms can also create a virtual office environment for casual “water cooler” conversations, offering a sense of spontaneity in employee interactions. Building a cohesive company culture becomes more challenging as global teams increase in diversity. For example, language barriers can make it harder for employees to communicate across teams, hindering important opportunities for collaboration.

Administering Fair and Ethical Policies

When employees come from different countries, there can be variations in skill and training that creates talent gaps across different offices or teams. Building a strong training program will level the playing field across borders, ensuring that all employees have access to the resources they need to be successful. Legal compliance is an ongoing area of development as local laws can change from year to year whenever new legislation is passed. International HR managers must be able to keep up with these changes and adapt as needed. Lack of awareness or training can lead companies to violate regulations by accident—a financially and reputationally costly mistake. Meanwhile, cultural differences can lead to misunderstandings and alienation if not appropriately taken into consideration.

Listen to your employees, ask them directly what they’d like to work on, what skill they would like to develop, and what path they’d like to take.

Culture and Values

A rapidly developing trend in recent years has been the expansion of corporate rights and benefits, particularly in the US, for gay or lesbian employees, and for transgender employees (reported by 91 and 83% of Fortune 500 companies, respectively; HRC, 2019). Almost simultaneously, the legalization of same-sex marriage has occurred in many developed nations (, n.d.). Work-life initiatives among MNEs may be well-suited to respond to these shifts, but may create tension between organizational consistency and the local context if they operate in nations, such as Nigeria, where same-sex marriage is illegal (ibid.). Luiz and Spicer (2019) found MNEs based in developed countries with operations in Africa found it difficult to export LGBT inclusive policies and, while some made the attempt, ultimately local laws and mores tended to be controlling. Managing work-life issues presents a number of challenges for HR departments in multinational enterprises (MNEs) because of the complexity of implementing policies that require sensitivity to local issues such as cultural traditions and legislation.

Very differently, a temporal separation strategy could involve initial experimentation at a limited number of locations, with expansion later, or the development of a time-line for implementing local work-life initiatives, with different locations starting on the time-line over time. Note that IBM explicitly conceptualizes a temporal separation approach, with the intention to expand the reach of policies over time, which contrasts with spatial separation, where expansion of policy coverage is not planned. Although tension-centered theory might be used to analyze a broad range of organizational issues, for present purposes, it is here applied to work-life issues in MNEs. Technology change, cultural differences within and between nations, relevant local and national laws, regulations, and political circumstances, and diverse understandings of gender and sexual orientation each impinge on the tensions that emerge around work-life in MNEs. Nonetheless, these issues are addressed only to the extent they are relevant to the emergence or resolution of tensions around work-life in MNEs.

Evidence of this comes from Chandra’s study (2012) of WLB in Anglo-Saxon and Western European countries which showed that WLB practices and family-friendly policies are distinctly different between western and eastern countries, and managing for these differences presents a challenge for MNEs. For less-developed nations, Heymann (2006) finds that culture, gender relations, and economic circumstances each impinge on work-life balance in different ways across nations. Legal compliance, ethics, and cultural awareness should be at the top of every international HR team’s priority list. Ensure that your team is prepared to manage international labor laws, virtual work environments, ethically-sound policies, development of international talent, cultural differences, and more when conducting international business. Make sure to have in your organization policies for equal employment opportunity as well to comply with newer policies and make sure that your policies comply with the employment laws of that country. Human resource departments must understand the importance of international HR issues and how much damage can come from the failure to comply with international labor laws and lack of cultural awareness amongst employees.

One of the easiest ways to tackle any communication or ethical problem before they occur is by using a centralized HR platform to connect your employees from wherever they are based. When determining what HR platform to use, look for a mobile-friendly system, a central notification center, and a seamless employee experience. It’s the Wild West when it comes to using generative artificial intelligence (GenAI) tools—such as ChatGPT—in the workplace, with many workers using these resources without their managers’ knowledge, according to recent surveys.

Many companies already use some form of compliance software, such as IBM OpenPages, but not all of these are created with global business in mind. Just as you need to take great care and attention to determining legislation in a new area of business, you should also determine what kind of compliance software is available there, and if it’s compatible with international business heading towards the U.S. (most are). Luckily, as data and global business capabilities grow, so has technology to help keep HR teams in line with international compliance rules and regulations. Global expansion has plenty of perks, but also plenty of challenges, especially for Human Resources departments. It ultimately allows for more diverse talent to be found, but not without some necessary evolution and adaptation from HR teams.

Let employees know that it is ok to ask for help and show them that the company can and will offer needed support. Companies can proactively address this by offering time for employees to engage with each other in a live format. These efforts will be especially appreciated by extroverted employees that need this interaction to feel connected and productive.

More subtly, Budig, Misra, and Boeckmann (2012) find that the motherhood wage penalty varies substantially cross-nationally, depending in large measure upon social attitudes regarding mother’s employment. It is plausible to suggest those attitudes are often held by supervisors in a position to provide or deny effective access to work-life policies within a hr challenges in multinational companies MNE. Perhaps the most underrated part about working at a multinational company is the network one builds. Employees who build genuine relationships with their colleagues and business contacts wind up with a rich, diverse, and international network. In 2020, these perks are generally undermined, but as an HR manager, you can do your bit to make up for it.

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