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Global HRM: Functions & Challenges

Instructor: Brianna Whiting
In this lesson we will learn about human resource departments that work on a global scale. We will look at their functions and the challenges they face. You can then test your knowledge with a quiz at the end.

A First Glance at Global Human Resource Management

Most of us have heard the term 'human resources' (HR). And, most of us realize that human resources is the department that handles the needs of the employees. They recruit, they hire, and they train employees. They explain and administer benefits and help with conflict resolution. But what happens when the human resource department is no longer overseeing the needs of a small, local company? What happens when the HR department goes global? Do they have the same responsibilities? Do they face the same difficulties? In this lesson we will explore the nature of the tasks and functions of global human resources management (HRM), such as recruiting and hiring. And we will explain some of the challenges they may face, like cultural differences and labor laws.

Global Human Resources Functions

Much like domestic companies, the roles for the HR department working for a global company consist of five main functions. Below we will look at each one and explain how they differ when they're being conducted on a global scale.

1. Recruiting and hiring: The goal of recruiting is finding a qualified candidate that can fulfill the duties of the position. It involves understanding the job description and interviewing, after which comes hiring the candidate that is the best match. When completing this function on a global level, there are some important considerations. First, the HR department needs to understand the tasks for the position in that part of the world, and the skills needed to be successful. Education levels and differences are also a consideration, since they may not be the same from country to country.

2. Training: Once the employee has been selected, they need to be trained. Most employees need some training in order to learn the ways a company does things. When the company is global, it is crucial that processes and policies are similar from one global area to the next in order to clearly communicate and to be able to use resources and materials in a variety of different places. Using the same processes and polices avoids miscommunication among offices and staff, and it cuts costs when the resources can be passed around to all of the different locations.

3. Developing and administering: Most companies, global or not, offer opportunities for additional training in order to develop the skill sets of their employees. When this happens on a global level, employees may have an opportunity to visit another country to receive valuable training. This increases the value of the employee because they can now become successful in a variety of locations. As for administration, companies also need to make sure that they oversee their employees in a professional manner. This may mean, training, compensation, or adhering to laws and regulations. On a global level, this is especially important because working hours may vary from location to location. Following the local laws is a priority for global HR departments.

4. Salary and benefits: Whether the company is local or global, they have to compensate their employees. And most offer some sort of benefits package, which include things like insurance, vacation, and sick days. However, companies need to pay close attention to how laws differ in all parts of the world. For example, the minimum wage might be different, and some countries might offer paternity leave for new fathers as a benefit. While the common goal is to pay employees for their work, knowing the standards, laws, and rules for each global area is an important goal for a global HR department.

5. Legal and personnel relations: Like we mentioned earlier, following the laws of each country is a crucial aspect of a global human resource department. This means knowing and following labor laws, tax laws, holidays, and any religious needs. By following the policies of each country, a company is able to keep out of legal trouble where these areas are concerned.

Challenges of Global Human Resource Management

All companies face challenges, but a global company may face some that are unique because of cultural and legal differences. Let's take a look at some of those challenges now.

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