Maintaining compliance in an ever-shifting, increasingly globalized world has its own peculiar challenges which will only grow more complex as time marches on. By understanding these top challenges, you can better situate yourself to take advantage of the opportunities they bring with them.
New Market Compliance
A 2016 study concluded that “87% of U.S. companies believe international expansion is a necessity for long-term growth.”
The Covid pandemic may have highlighted issues associated with increased globalization, but it also underlined its inevitability. We are more aware of the global supply chain than ever before, and practically anyone can interact with it in meaningful ways through the internet.
And with each new territory with which your business interacts there are a bevy of new laws and regulations – and the onus is on you, the owner, to successfully navigate them.
Tax calculations and regulations are documented in native languages, and the regulations surrounding labor vary widely within foreign markets. For instance, in Mexico, new hires must be registered with the government within a five-day window whereas in Spain such registration must be completed before employment begins.
Violations in this realm can incur immense costs.
While on-the-ground support is clearly the best scenario, it might not be scalable for your enterprise. Couple that with the rapidity with which businesses are expected to grow, and even the most experienced HR departments can feel the strain in grappling with international compliance.
While international compliance poses some obvious challenges, domestic compliance has issues all its own. Different regions and municipalities have their own laws which are being continually updated. Failure to comply with these tax deadlines can result in massive penalties and fines.
So how do you know where to focus your attention? The stakes with payroll compliance are high, and the particularities of the provinces vary.
Uruguay, Argentina, and Chile require employee signatures of pay-slips upon receipt. Overlooking this would leave you open to lawsuits for lost wages.
Italy requires an Italian bank account to pay monthly statutory tax returns. Ignorance of this fact would lead to a massive headache on the due date.
However, the legal aspect of compliance is just half the battle. Compliance failures can erode workforce morale in spectacularly short order. How long can an employee be expected to wait for their wages? A few hours? Days? Your reputation is at stake if you miscalculate.
One survey showed that 49% of American workers will be looking for a new job after just two payroll errors. Now you’re increasing recruitment allocations to fill existing positions.
International benefits policy requires careful consideration.
First, acquaint yourself with the statutory requirements in each country. Bonus points if you’re fluent in the local language as many governments will detail these statutory minimums on their websites
Here is a prime opportunity to consider your current spending on benefits. Though the U.S. requires substantial coverage from large employers, most countries have some degree of state-provided healthcare coverage. Thus, offering prime, private health insurance to global workers may prove redundant and costly.
The demographics of your workforce can also significantly shift your benefits calculus. A senior director in the U.K. may need supplemental private healthcare for their family, whereas a single salesperson in France might opt for reduced healthcare coverage and opt instead for a richer profit-sharing package.
While gender inequality dominates the headlines, so too does the definition of family and the practice of family leave.
The U.S. design of shared parental leave is markedly different from the 52 weeks shared between parents in Denmark. Considering these differences complicates more than the compliance itself, it also complicates the allocations of resources in response to cultural relationships to regulations.
The liability insurance you provide your employees will vary from country to country. Most have different schedules of resources for such insurance. However, many global organizations have begun adopting private insurance protections even in nations with established plans. This does more than appease legal responsibilities, it also addresses ethical responsibilities.
An organization’s culture should promote the well-being of everyone involved, regardless of their geographic location. Assessing insurance liabilities is a basic way to address the effectiveness of your employee protections.
Termination Policies and Practices
There are only two certainties: death and taxes. With a particular lens, terminations can fall into both categories.
Incorrectly managed terminations can be unpleasant for all parties involved.
“At-will employment” exists only within the U.S., a streamlined termination function that is not to be found elsewhere around the world. Therefore, when considering terminations abroad, there are a multitude of procedures and processes that must be adhered to if you’re to maintain compliance.
Theft or other criminal acts are simpler to navigate during termination regardless of the geography. Laws are effective guidelines for proper behavior. The difficulty comes in issues tethered to employee performance or disagreements. Different places have different requirements for legal termination of employees based on performance. Most will require documentation and evidence, and in some places, it can take up to a full year to legally terminate an employee.
There are instances where a justification can be made, but there are still notice periods and severance pay mandates that require proper attention.
Retirement and Pension Plans
The U.S. workforce is aging rapidly. While the covid pandemic coaxed some people to accept retirement, Gen Xers and Baby Boomers still make up 58% of the workforce. With this concentration of older workers comes interesting resource planning – the pensions for an anticipated exodus.
There are no hard and fast international rules about retirement age, it is useful to consider how different countries approach retirement. France allows workers to claim retirement after reaching the age of 62, but who may also gain a higher pension by working to the full-rate retirement age of 67. The U.K. recently rewrote pension laws to require employers to contribute at least 3% into an employee’s private pension scheme.
This reflects a growing global trend – statutory requirements of private businesses to allocate resources to employee pension funds.
Global HR compliance is unavoidably challenging and complex. However, by facing it head-on, business owners may be able to take the advantages presented by shifting global sentiments, winning victories for themselves and for their increasingly global workforces.
Launchways is here to support you and help you navigate international workforce compliance issues.
We are now more than a year since major news organizations first began sounding the alarm for the emerging COVID-19 pandemic and looking back on articles from that time can be quite jarring. In mid-March of 2020, Pennsylvania Governor Tom Wolf gave a speech asking for “two weeks to flatten the curve”. That optimism was echoed in American workplaces, with expectations of employees needing to work from home for perhaps a few short months. Over a year later, and companies are only now announcing plans to bring employees back into their physical workplaces. As we watched the pandemic stretch from weeks into months, and from months to years, it became evident that the changes brought about in the business world were here to stay.
A long year of uncertainty and upheaval has left many organizations without a sense of clarity regarding what their employees want and need.
Perhaps the most consequential topic of conversation and debate within the workplace going forward will revolve around how to manage the changing expectations and demands of employees. The general trend is toward a growing number of options for handling schedules, workplace flexibility, and benefits. If the changes brought about by the pandemic were short lived, one might expect a relatively quick and graceful return to normal routines and procedures. We all would have happily returned to our physical workplaces and continued with business as usual.
That obviously is not what happened. It took many of us months to become acclimated to remote work, and enough time has gone by now that these changes are quickly becoming a durable part of the modern world. After more than a full year, many of us have become quite accustomed to working from home, and some have even made drastic changes to their lifestyles and are now dependent upon the flexibility of these new work arrangements. Because of this, it is impractical, perhaps untenable, for us to expect the workplace to return to pre-pandemic norms.
Many organizations are already realizing this, marking an incredible transformation in the perception of remote and hybrid workforces. In the early stages of the pandemic, very few organizations would have taken seriously the notion that these changes would become permanent. Only a small percentage of companies were utilizing remote work at scale, but the experiment of the last year has proven its feasibility, and now there really is no going back.
This subject is complex and multi-faceted, but the primary concern on most people’s minds is scheduling. Of course, not every organization is going to make remote work the norm going forward, but it will likely remain an option in the vast majority of them even after physical workplaces reopen. Many of the world’s largest companies have already announced plans to embrace remote work as at least part of their plans going forward, such as Microsoft, Spotify, Dropbox, and Uber, among others. It is not uncommon to hear of companies that have decided to end their leases and get rid of their physical offices altogether. This trend has spawned office vacancy crises in major cities throughout the US and, considering that more than half of employees currently working remotely would like to continue to do so, this is not expected to be a short-lived phenomenon. If organizations want to remain competitive in the labor market and retain their talented employees, they need to embrace the hybrid workforce transformation.
Remote work is not for everyone, however, and it is important to keep in mind that many are eager to return to their physical workplaces. Pandemic related safety measures are relaxing in many parts of the country, but where they remain in place organizations are exploring creative strategies to keep occupancy to recommended maximums. Staggered schedules and compressed workweeks have emerged as popular approaches because they allow employees to return to the workplace if they wish by rotating who is coming in at various times. Flextime, a strategy that allows employees to work at the times that work best for them, is another option to keep an eye on as it is likely to be in high demand as physical offices and workplaces reopen.
Despite their hesitation, organizations are realizing that strategies like flextime and remote work come with tangible benefits, such as increased employee productivity, retention, and engagement.
Organizational Challenges Incoming
It is no secret that at the top of the list of any business’s concerns is ensuring that the policies they follow protect and benefit their bottom line, and this topic is no different. It simply is not feasible to expect every company to accommodate 100% of their employees working remotely going forward, but expectations have changed, and the smart move will be to try to meet those expectations where possible.
Many of the changes we have seen in easily adapted work like IT and Human Resources are generally here to stay, as are video conferencing tools like Zoom and Skype. We should also expect to see new tools emerge to better meet the needs of the new hybrid workforce. Solving the major pain points of remote work, like communication and organization, will be a new frontier in software development going forward. Because of these changes, companies are likely to start aggressively seeking out management and staff that have experience working with distributed teams.
As the pendulum swings in the direction of remote work, we should all be wary of a potential pitfall: overcompensation. The desire to be at the leading edge of this transition is understandable, but we currently only have a year of data to verify the feasibility of hybrid workforces, and the practicality of it is likely to vary widely from organization to organization. Many will be drawn to the promise of lower expenses and reduced complexity, but the results are sure to be mixed.
Organizations should be leery of changing too much too quickly despite the pressures that they are likely to face. The first order of business should be to get those who want to work in a physical workplace and those who want to continue to work remotely set up to do so as quickly and efficiently as possible. It is important to let the dust settle and a sense of normalcy to return before any further drastic changes are made. Given where much of the country remains regarding COVID-19 precautions, simply reopening workplaces to any degree is going to be a significant enough challenge already.
Many employees will prefer to continue working from home, but that does not mean that it should become the new standard just yet. The importance of the social component of life and work is not to be underestimated, as we have seen over the last year, so it comes as no surprise that many of us yearn to see their coworkers and customers in person again.
As companies make decisions about how to handle the emergence of remote work, the key will be for them to focus on providing options to their employees, not requirements. Regardless of what they decide, it is important that their decisions are calculated and deliberate. Most organizations spent the last year simply trying to ride the wave and not drown amid the chaos – leaving aside, of course, the companies that were already working remotely before the pandemic.
Now that the experiment has been run and the results are coming in, everyone is starting to look toward the future. This should be considered a great opportunity to evaluate the success and failures of what was tried and make decisions based on those results through the lens of what is best for that particular organization going forward. We are no longer improvising on the fly. Companies are going to start learning from what has happened and it is the companies that are deliberate about their decisions regarding remote work and carefully develop their plans that will be most competitive.
The first step in making such a plan should be to collect and analyze as much data as possible from your employees about their interests and expectations regarding remote work. This could take the form of interviews, group discussions, company-wide surveys, one-on-one conversations, or some combination of these options. Regardless of the method, management needs to get a scope on what their employees want before they will be able to assess what is feasible to offer them.
Tough compromises are almost inevitable because, in most situations, neither the employer nor the employee is going to come away with everything that they want. Consider more complex situations, like the companies that will not be able to offer the same remote work options to all their employees because of differences in the type of work that they do. Ford recently offered 86,000 of their employees the option to continue working from home permanently, but this is not possible for its 100,000 plus factory workers. The cost of workforce infighting can be substantial, so to prevent conflict, organizations may consider offering other benefits to the employees who work in roles that cannot be adapted to remote work. Whatever they do, it is imperative that they reaffirm the importance of those workers.
Taking all of this into consideration is going to be overwhelming for a lot of organizations, especially small businesses. Management should remind themselves that they are not going to be able to please everyone. All that can be reasonably expected is that they make good-faith efforts to meet the needs of as many of their employees as possible.
The knock-on effects from the pandemic, such as the emergence of remote work, have forced organizations and employees to completely re-evaluate their priorities and needs. Tough decisions are going to be made and, in many cases, both employers and employees are going to have to look elsewhere to have those needs met. Disruptions like this are undoubtedly stressful, but if the situation is managed strategically, at the end of the day we might all be better off.
This is a guest post written by Launchways partners Rada Yovovich and Chanté Thurmond, representing The Darkest Horse, a next generation Diversity & Inclusion consulting firm.
The Long-Awaited “Future of Work” Has Come Early, and Brought Surprises Galore
Particularly in the last few years, Thought Leaders have been heralding the approach of “The Future of Work,” imagining a model of what “work” would look like in a world of abundant emerging technologies including artificial intelligence, robotics, and automation. That future vision has typically focused on the need to manage a shift of the workforce to virtual, remote, and alternative models to full-time staff (gig-based, contract-based, and part-time labor, for example).
Enter COVID-19, and the timetable has changed, and brought with it a number of unexpected features. In a matter of weeks, we’ve seen non-essential workers being told to work from home (WFH) while sheltering-in-place. Organizations, in an effort to recalibrate their budgets in tightened consumer and supply chain markets, have done their best to be creative by adapting HR policies and employment contracts to allow for safer working conditions, flexible hours, and many have reduced their workforce resulting in employees being shifted to subcontractors, part-time status, or have simply been laid off, forcing them to seek new income opportunities from home.
Who would have guessed that these disrupting shifts to work-from-home would coincide, hand-in-hand, with equally disrupting shifts to school-from-home, making working parents into teachers as well? And who would have predicted the explosive and breathtaking speed of almost-universal adoption of Zoom and other web-conferencing services?
This is not the graceful, opportunity-driven entrance into the future we may have envisioned. In fact, initial waves of surprises produced longings for a “return to normal.” But, more recently, subsequent waves of signals from the future have pointed toward possible shapes of things to come. Many uncertainties remain, but some things have become quite clear. We most certainly aren’t going “back to normal!” The past has passed, and it is not coming back. Winners and losers will be defined by their agility in adopting new technologies, by the ability to learn and innovate quickly, and by how well they attract and retain top talent.
Competing for Talent in the Future of Work
In a world where more companies’ workforce is remote/virtual, the geographic and financial constraints of recruiting melt away. Suddenly, teams have an opportunity to pursue a truly global talent pool in a more democratized way—allowing them to expand their talent search beyond their local zip codes.
The expansion goes beyond geography. Entire populations of people for whom a traditional office role is challenging, unsafe, or even impossible are finally able to access the labor market in a more equitable and inclusive way. These include, just to name a few:
Individuals with significant physical disabilities
Individuals who are gender nonconforming or going through a gender transition
Individuals with phobias or other mental health challenges
Individuals with chronic or acute health conditions
Caregivers, whether for children or aging/ill family members
These types of barriers to workplace accessibility can be easier to accommodate in a remote-work context. Individuals can curate their space and constraints to meet their own needs, particularly if their organization provides proper technology, infrastructure and policies to support them.
The Best Talent is Diverse
The greatest talent in the world includes members of populations who are suddenly gaining access in this new normal. If your organization is hiring the best talent without bias, members of your team will represent a wide array of cultures and identities.
Not only is diversity an inevitable outcome of unbiased recruitment practices, but the data shows diverse teams far outperform homogenous teams. This ROI has been proven time and time again — reports by Forbes, Mercer, the Harvard Business Review, and many more demonstrate that a diversified workforce drives innovation and business growth — bottom line: diverse organizations perform better.
Here’s How: Practice Inclusion and Equity Throughout your Employee Lifecycle
It starts with Attraction.
Inclusive employer branding, content marketing, events and continuous networking
Talent Acquisition and Recruitment.
Engaging diverse talent, identify diverse sourcing opportunities, curb unconscious biases, reduce barriers to application process, create transparent process and develop culturally intelligent communication practices
Hiring and Onboarding
Transparency, over-communication and personalization can make all the difference
Combat bias by building a fair and consistent processes
Build interview guides and scorecards that are clear and objective
Promotion of wellness programming is more important now than ever before
Re-evaluate and optimize for equity and gender parity
Employee Engagement and Training & Development
Make it a regular practice to check-in with your employees. Conduct pulse-surveys that specifically gauge inclusion, equity and belonging. Click here to learn how The Darkest Horse can help your organization with this!
Cultivate an inclusive culture
Offer inclusive and accessible learning experiences and develop clear learning/career pathways
Here’s your opportunity to acknowledge, celebrate and reward for each team member’s cultural contribution, unique ways of working, and fostering a culture of inclusion!
This is also an opportunity to re-evaluate your performance metrics. Some questions you may want to ask yourself includes:
Is your process fair, equitable and inclusive?
Are your policies unintentionally punitive or do they lean towards corrective action?
Create, support, and invest in Employee Resource/Affinity Groups
The Future is Yours!
Now is the time to catch the wave of change and surf it to success—don’t get pulled into the undertow of clinging to old ways of working! Here are a few steps to move your organization towards the future of work:
Harness the inclusion capacity of your organization. Identify the innovative, forward-thinking, and inclusion-minded changemakers in your organization. Activate them toward a goal of fostering inclusion. Empower them to set audacious goals and affect disruptive change when needed, and support them with leadership buy-in.
Get help. When you have reached the bounds of your team’s capacity for in-house inclusion efforts, partner with inclusion experts like The Darkest Horse to bring in external support for consulting, training, facilitation, and events/experiences.
Use the right tools. Work with an HR and Benefits expert like Launchways to ensure your HR processes and benefits packages meet the needs of a modern workforce.
About The Darkest Horse: The Darkest Horse (TDH) is a women and minority-owned next-gen consultancy firm helping the workforce and organizations explore the intersections of Radical Inclusion; The Future of Work; Emerging Technology; Health, Well-Being and Human Potential.
The Darkest Horse partners with organizations to empower diverse talent to thrive by embracing emerging technologies and instituting strategies that maximize human potential.