Globally distributed teams are sometimes referred to as a “borderless” workforce. But the reality is that borders do exist, and employment practices throughout the employee life cycle, from recruitment and onboarding to benefits, payroll, and offboarding need to be locally compliant based on each team member’s country or jurisdiction.
However, the statutory requirements, cultural norms, and customary practices vary widely across geographies, whether it’s benefits, bonuses, paid leave, or notice periods. This makes it challenging (though not impossible) to maintain a consistent global standard across the organization, which can negatively impact the employee experience.
How can People leaders ensure local compliance while also building HR policies for a global workforce? How can they ensure an equitable employee experience across jurisdictions while adhering to disparate local laws? Below are some strategies for creating HR policies that meet local compliance requirements while also striving for a fair and consistent employee experience across geographies.
Why local compliance is crucial
For companies with globally distributed teams, it’s critical to meet the local requirements specific to each country or jurisdiction where their team members are based. This includes all applicable labor laws, payroll and tax regulations, statutory benefits, social contributions, data security, and more. Whether it’s pension contributions or Christmas bonuses or leave entitlements, employers must adhere to the rules in each jurisdiction where they employ talent.
Each country has its own framework of labor laws to ensure that employees are treated fairly by the standards of that country. But compliance isn’t just about doing the right thing—it’s about protecting yourself from legal and financial risks such as government audits, fines, lawsuits, and reputational damage. Being compliant also ensures business continuity because regulatory audits or legal action can disrupt operations, making it difficult to retain talent or scale effectively.
Balancing global equitability and local compliance
It’s easy to see how varying local requirements can make it difficult to maintain a company-wide global standard. For example, some countries might have mandatory pension contributions that other countries don’t. Probation periods may vary from, say, a two-month maximum in the Netherlands to a customary six months in the United Kingdom. Some countries may allow fixed-term contacts while others don’t. Navigating a patchwork of international requirements can easily lead to inconsistencies in your hiring practices, benefits packages, and more.
So how can People leaders create equitable HR policies for their global workforce and ensure a fair and consistent employee experience across borders? Here are some strategies for striking a balance between global equitability and local compliance.
1. Identify your core values as a company
Start by establishing your core values and principles as an organization so that those values can guide your approach to compensation, career growth, and well-being, and help you create structures internally to ensure a strong employee experience. When you’re aiming for consistency, make sure you lean into your values and ensure that they’re embedded within your People policies and processes, regardless of location. The way you build your compensation philosophy or how you structure your learning and development approach can reflect your organizational values and create a consistent sentiment across all teams, regardless of where they are in the world.
2. Establish company-wide standards
Take stock of your existing workforce and the statutory requirements and customary practices in each country or jurisdiction where your team members are based. To standardize your People policies across countries, you might choose the most employee-centric standard and use that as your global benchmark. For example, if you operate in 10 countries and one of them mandates the most generous parental leave, you might choose that as your company standard and offer the same benefit to all your employees. This approach allows you to set your own global, company-wide standard, regardless of differences in local laws.
3. Create global policies, then localize
Once you’ve clarified your core values and established your global policies, you’ll need to tailor your global approach to each local context to ensure that your HR policies and processes are locally compliant.
For instance, let’s say your company standard is to provide three months of fully paid maternity leave. Each country will have its own rules around when the employer should be notified, what documentation is required, when the leave period begins, whether it’s the employer or social security that pays (or a combination of both), and so on. In other words, even if you’re applying a consistent global standard, you’ll still need to localize your approach to ensure local compliance in each jurisdiction.
4. Communicate transparently to build trust
Depending on the range of countries you’re working with, you may find that it isn’t possible to fully harmonize your HR policies across geographies and that some disparities will remain. Team members may notice, for instance, that your local policies and processes vary from one country to another.
Be sure to communicate transparently about how you’re operationalizing your company values in a global context, and why differences remain due to local compliance requirements. Communicating proactively and explaining regional differences will head off potential misunderstandings and help to foster a culture of fairness and trust.
Thriving together as a global team
Ensuring a consistent employee experience across geographies can seem challenging due to varying local compliance requirements. But it’s also an opportunity to reflect on your company values, find creative ways to operationalize them, and build a more cohesive organizational culture. What we’re doing collectively is building a future of work where people can thrive together across borders.
Need help building a global team? Learn how Oyster helps you hire talent compliantly in 180+ countries while ensuring an excellent employee experience. Reach out today for a personalized consultation.
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