The management of an external workforce is arguably the most straightforward within the United States, and for that reason most organizations begin there when creating a formal external workforce program. These are typically managed within the Procurement function, and are a means to standardize and automate the entire engagement process with flexible workers. Doing so can help companies get visibility into this workforce, creating the opportunity to cut costs, increase process efficiencies, improve worker quality and reduce compliance risks.
Once companies start to realize the benefits of a formal program, the next step is to establish a plan for expansion, eventually ensuring all global external workers are managed through it. This can be a lengthy process, as each country has its own unique laws, regulations and cultural nuances associated with the flexible workforce. In order to ensure that everything goes smoothly, it’s important to have a clear understanding of how labor practices differ, how cultural nuances can be recorded, tracked and managed, and to create and follow a checklist for hiring across borders that works for your company and can be replicated when needed.
Varying Cultural Norms will Impact Your Program Expansion Efforts
There is no universal process by which to manage external labor because of differing business practices, country-specific labor laws and cultural nuances. In many geographies, temporary work has had a negative connotation, so to counteract these misconceptions, many countries have enacted legislation to protect the interests of these flexible workers and grant them equality in pay, working conditions and benefits. Here are a few country-specific examples:
France requires a three-way electronic contract among the client, agency and contingent worker before work begins. The country also has dynamic pay rules and specific invoicing requirements and data archiving standards that must be followed.
The Netherlands and Belgium have very straightforward laws for professional temporary workers, but when it comes to those doing manufacturing and administration/clerical work, the laws can be intricate. Pay rates vary by labor type, distance traveled each day and hours worked across shifts, and there are specific rules around meal vouchers, time off aggregation and more. Trade unions also require reporting around hours worked to maintain compliance to tenure limitations and trade union rules.
Germany has a collective bargaining agreement (CBA) that regulates hours and working conditions, and is linked to additional pay parity requiring that all workers are afforded equal working conditions regardless of permanent or temporary working status. The country also has a government-mandated work council that ensures compliance with local laws, and may even have a representative on-site to oversee this on an ongoing basis.
Japan also mandates certain regulations on workers. The country’s overtime structures are based on a workers’ monthly overtime activity and can differ depending on the time of the day and day of the week worked. Japan also has very strict regulations around interviewing candidates and ensuring anonymity.
Even though a region’s cultural nuances could be considered insignificant in the bigger picture of the expansion effort, ignoring country-specific customs and laws is not an option. Acknowledging local holidays, respecting working hours and local language, and considering time zone differences is important. Being conscious of local business practices when developing your program expansion plan will help make the transition into a new geography a success.
Technology Can Help You to Avoid Roadblocks to Expansion
A vendor management system (VMS) can help organizations take a more systematic approach to complying with local laws and practices no matter the country or complexity. Many organizations rely on VMS technology for a unified view into its workers and to be a single system of record for reporting and compliance purposes.
A VMS is flexible, allowing in-country users to utilize the system in their language, time zone and currency. In addition, a VMS is configured based on a user’s “role” within the tool (meaning as a hiring manager, worker, executive sponsor, supplier, etc.). From a compliance perspective, this configurability can be very important. In countries like Japan where the recruiting process is highly regulated, a VMS can provide the exact exchange of information between staffing firms and your company to ensure that privacy laws are upheld and many of the risks of human error are avoided. Other support for localized business rules may include data protection, rate regulations, assignment duration and renewal regulations, invoicing or billing regulation, tax regulations and reporting requirements to name a few.
Your Checklist for Global Expansion
There are many items that need to be considered at various times in the scoping, planning and deployment of your program. You may find it’s a good idea to have a checklist of these considerations before you embark on your first global program expansion, and to adjust and update it for each subsequent project. This may include:
Executive and local sponsorship – Who are the key stakeholders for your expansion? It’s important to identify your local program owners and connect them to the executive sponsorship team as the process begins. They will ultimately help drive local adoption, and having their support early will be a significant benefit. Even if a program expansion is driven by a corporate mandate, having a strong local sponsorship is key to ensuring local hiring managers are on board with the program. They are also able to explain the cultural nuances, help you navigate local regulations and identify regional suppliers.
Change management – From putting the right leaders in place within your organization to keeping your internal users informed as needed, there are many steps to any change management process. It’s critical that this is a smooth aspect of your transition and there is someone in place to oversee that program users stay calm, your project is on time and on budget, and upholds compliance throughout.
Communication and training – Knowing the language and having native speakers in place will help you at every turn. You will need language translations, contract negotiations and legal approvals of these foreign contracts, in-country legal counsel reviews and much more. Be sure that communication is a top priority and that your staff is properly trained to adjust to changing business needs.
Cultural nuances – Carefully identifying and navigating around cultural nuances will only help your cause. This step is unique to each new project within each new region. Incorporating these nuances as your expand will help you secure program buy-in and adoption.
Know the facts before you expand globally and build processes around this initiative. Pay attention to the details and the cultural nuances in each country and come into it with an open mind. By understanding local regulations, using technology to help you stay compliant and following a simple checklist for your expansion, you can overcome many complexities before they become challenges. Many regions have strict laws and regulations that must be adhered to, but when you are prepared, conscientious and sympathetic to the needs of your global workforce, you will find help when you need it, and success in attracting the best talent for the job.
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