Dive into the world of PAYE investigations. Uncover the facts, implications, and insights in this informative blog
It has never been easier to manage a cross-border operation, with the convenience of international travel and the advancement of digital technology.
Having a Zoom call with employees on the other side of the world is now just as simple as calling a meeting with your co-workers in the next room.
This means that an increasing number of companies have expanded internationally, creating a truly global workforce. However, there can be new challenges that arise when blending working practices in different countries.
We take a closer look at how to manage an international workforce and the issues that may arise including cultural differences, communication and global payroll operations.
Cultural Differences And Communication
While every country will agree that respect and politeness in the workplace are important, cultural differences may mean there are misunderstandings. In some countries a direct approach is the normal method of communication, while in others this would be considered to be impolite.
Differences can be amplified when someone is conversing in a second language. It is easy to make a faux pas, or to misunderstand social etiquette. In recent years, video communication software such as Zoom has helped make global operations much more efficient. However, this means that employees at all levels will need greater awareness of nonverbal communication, and how this could inadvertently cause offence to other cultures.
For all of these reasons, cultural diversity training is essential for a global business. Every member of staff should have a thorough understanding of how their speech, written communication or body language may be interpreted by other cultures, and how to avoid unintentional offence.
Managing Currency Fluctuations
If you are managing operations in multiple countries, there will be lots of practicalities to consider as a global payroll is very different. It is not the same as simply expanding your current provision because you will need to consider other elements such as currency.
Large payments mean that even a small shift in exchange rates could influence your operating costs significantly. When there is political instability or the climate is more volatile, you could see bigger and more rapid swings in currency values.
If you have an international payroll, it is imperative to have protection from variation in the exchange rate. This is not necessary when you are operating within a single currency so it is a completely new consideration.
The good news is that there are a number of foreign exchange tools that can help, such as fixing the cost of the exchange rate for a longer period. An international payroll expert experienced in foreign exchange will be able to advise on the most appropriate solution.
In different countries, there may be varying expectations of what the management style may look like. This can cause conflict with all levels of employees, especially if there is not a consensus between those at the top, and the localised management teams.
In some countries, decisions are always made by those at the top, and disseminated downwards and out to all employees. This is known as a top-down management style and is common in places such as India and Japan. Employees will expect management to follow through on the decisions made and implement changes swiftly.
In other countries, there may be more diplomacy in decision-making with executives communicating at length with staff of all levels, and seeking input. This is more common in countries such as New Zealand, Canada and Sweden, to name just a few.
Understanding how a local workforce is motivated, and what style of management works in different areas is an essential part of having a global operation.
Many studies show that employees who feel more connected to their employer will be far more effective, with better performance and more commitment. Wherever your staff are based, it is vital that they truly feel part of your company.
If all of the top management are located in one part of the world, and there are fewer offices elsewhere this can represent a real challenge. Having a clear strategy of how to promote engagement should be a priority.
Replicating chats by the water cooling when your workforce is distributed globally is more difficult, but it is possible. Offer employees multiple ways to communicate including emails, video chat, online collaborative documents, and employee forums.
Regular check-ins, formal and informal communication, feedback and celebrations can all help the workforce to feel included and valued despite being located in different countries.
Social events are still possible online with virtual escape rooms, quizzes, and other interactive games possible. We should all be thinking of ways to interact with each other in the new normal, whatever that means.
One of the most difficult problems to solve is how to ensure that all employees are remunerated fairly. With different international payroll requirements, varying job descriptions and different roles, it can be difficult to ensure parity across the company.
Employees in different countries may have starkly different expectations for starting salaries, based on local conditions. Culture also plays a large part in how employees respond to salary and benefits packages.
Although it is easier to have a universal package that applies in every country, it is far better to have an approach that is sensitive to the conditions in each location. It will take more research and benchmarking to set up, but the outcome will be a more motivated workforce and retention of the top talent.
This does not mean necessarily paying workers less, but the payroll and benefits may be structured differently. For example, in areas that have high living costs a housing or rent stipend may be valuable. In countries with no national healthcare, health benefits may be an option to consider.
What remuneration you choose to provide is your choice but tailoring them to each individual country will deliver significant benefits.
One final word on the subject of scheduling; anyone who has worked on an international project will appreciate the difficulties of finding a mutually acceptable time slot.
When distributing communication, scheduling meetings or setting deadlines, do not expect the workforce to always adapt to the time zone the management team are in. This can cause resentment and make employees feel peripheral to the central organisation.
By being flexible and taking different time zones into account, it is possible to create a cohesive workforce that is efficient, strong and high-performing.