Crafting people’s policies means keeping in mind the needs of the people while maintaining consistency. A worthy endeavour, for sure, but one that also becomes harder when an HR team manages people across geographies.
In India, many companies are either headquartered outside the country or have branches in other countries. For such companies, there is often a stark contrast in employees’ expectations depending on where they are based.
For today’s post-pandemic, hybrid, multi-genrational workforce, “copy-paste HR” is not as feasible and actionable as it once was. There comes a tension between consistency and cultural and legal relevance regarding how certain policies should be implemented when implemented across borders.
Understanding Standardisation in Global HR
Standardisation of policies usually means that certain regulations remain in place irrespective of geographical differences. Such policies mostly revolve around the working structure of companies and how workflow is expected, including areas like:
- HRIS and people analytics
- Performance frameworks
- Leadership competencies
- Global code of conduct
Standardisation of policies provides consistency across teams and branches. It paves the way for a stronger employer brand and internal equity, as employees do not feel they might be overlooked due to their location or other factors.
With a consistent policy framework in place, it also becomes easier for HR and leadership to govern employees, conduct audits, and maintain a standard reporting structure. Oftentimes, standardised policies also help with cost efficiencies and scalability within the company.
Where Standardisation Breaks Down
While standardisation was once the expected and even cherished norm, the increasing diversity within companies is slowly exposing areas of concern that a rigid policy structure can pose.
Cultural Mismatch
One of the most prominent reasons why policy standardisation breaks down is a mismatch between the culture of a new team when compared to the existing workforce. The differences can either be in workplace norms of the new location or even legal differences in the labour laws of the two countries.
Even benefits like leaves become hard to standardise when geographical distances become greater. Similarly, work timings can often become a point of contention when an employee’s working hours and expectations do not match with their superior based in a different location.
Legal Risks
Each country has their own set of labour laws in place to ensure worker rights. These policies not only take human abilities into consideration but also cultural practices and societal norms. As such, if a company headquartered in a different country tries to use its previously standardised policies, it is likely to risk running into legal trouble.
Common areas of such legal mismatch can often include maternity benefits/leave, childcare facilities, healthcare coverage, and even the maximum number of working hours an employee can work in a day. Other aspects that can often fall through the cracks include the minimum number of leaves, overtime payments, locally mandated days off, and even communication norms.
The Case for Localisation
Localisation of policies does not mean creating a whole new structure of rules and regulations specific to a particular location. A good rule of thumb is to include feedback from the locally based experts to ensure legal compliance while adhering to the values your company stands for.
Local Celebrations
One of the ways in which policies can be localised is by adapting benefits, holidays, and leave structures based on the customs and laws of the area. This form of adaptation should not stop at meeting the bare minimum requirements.
For example, an acceptable localisation of policies for a US-based company in India might include providing days off for a festival like Holi. A good localisation, though, will also include organising Holi celebrations and allowing the employees to truly enjoy the spirit of the festival.
Communication and Engagement
When trying to communicate and/or engage your employees, the best way to do so is through terms and customs they are familiar with and expect. Rather than expecting a team in a different country to communicate in a manner similar to the home base, communication and policies need to be tailored to meet at least halfway.
What this requires is a basic understanding of local culture and expectations. In some cases, localisation does not need to mean a change of policy but only how it is communicated and worded.
Why Localisation Matters
Localisation of policies becomes imperative when a company has a significant number of employees based in different locations that differ in cultural and legal expectations. They also provide multiple benefits, including but not limited to:
- Legal Compliance: Adhering to local laws is one of the main advantages of modifying laws to inculcate changes that keep employee location in mind.
- Better Connections: With locally relevant policies, employees’ trust and engagement with their company increases significantly, hence bolstering retention.
- Increase employer reputation: By giving local laws and culture their due respect, companies can significantly boost their reputation as an employer as well as a business, hence improving their talent pipeline as well as client base.
Risks of Over-Localisation
Despite the many benefits of policy localisation, there are many reasons why companies remain on the fence about embracing such initiatives. There is, like in many things, a fine line when it comes to balancing localisation with consistency to ensure that a company’s core values are not lost while trying to adhere to cultural expectations of a particular region.
Policy Sprawl and Administrative Complexity
Localisation of policies does lead to an increase in the complexities of operations. Having multiple sets of policies, even if only slightly different in nature, means an increase in the workload.
Such a sprawl of policies can also lead to mistakes owing to confusion between different locations. Double-checking every policy in case of discrepancies can be exhaustive in nature, leading many companies to shy away from localisation. It also leads to a significant increase in operational costs.
Perceived Inequity
Having a different set of policies for different regions can also lead to a feeling of frustration amongst employees. Workers based in one location could feel that a different set of employees is receiving more benefits, even if it is to remain legally compliant.
The perceived inequity can lead to a decrease in employee morale and questions for the leadership that may not have simple answers. This is one of the key reasons why most companies hope to keep their policies standard across nations.
Team Incoherency
Multi-national companies often have teams with members based in different countries. However, different policies for members within the same team can increase difficulty in global mobility, benchmarking, and workforce planning.
For example, the criteria for feedback to be used in one country might differ slightly in another country. As such, team members and even superiors based in different locations may find the process hard to navigate, leading to harder assessments and perhaps unequal evaluations in some cases.
HR Areas Where Balance Is Most Critical
When grappling with standardisation versus localisation, there are certain key areas that need to be balanced more than most.
Compensation and Benefits
Global pay philosophy and local market competitiveness should both be considered when offering compensation and benefits to any employee. The company’s own values can be reflected in how they establish their base pay, and localisation can come in when deciding what benefits an employee is eligible for and/or may need in the future.
Leave & Time-Off
In order to create true equity when it comes to providing leaves and times off without creating feelings of partiality, companies need to constantly reassess their global minimum standards and how they differ from local minimum mandates.
Minor deviations between the global standard and local offerings in such matters can always occur due to country-specific enhancements. However, any large difference between the number of leaves provided to employees in different areas should be avoided at all costs.
Performance Management
To help make performance management and feedback accessible across regions, companies can use a twofold approach. Based on company values, creating a common framework with factors applicable to all employees can be easy to maintain and explain.
In case of locally eleven goals and feedback styles, HR and leadership can conduct workshops educating employees who might need to provide or receive feedback based on foreign standards.
For example, if a manager based in the US wants to evaluate an employee based in India, they should be provided a thorough explanation of any differences between the feedback systems within the two countries and how they can impact future prospects.
Learning & Development
Learning & Development is a key area in which standardisation and localisation can work together beautifully. While the concepts that employers want their employees to learn can remain the same across regions, the learning material itself can use local case studies and projects to explain those very aspects.
For example, a company might want all its employees to know about how the company files for patents. However, based on the country of the employees, the legal approach to the same can vary, which is where a study of local cases can become helpful.
A Practical Framework for Decision-Making
When it comes to creating policies for a specific region, companies can follow the concept of “global principles, local playbooks.” This means that while the core value and idea behind the policies remain the same, their execution will differ based on region. This can be done by asking simple questions that can help you formulate your next steps.
Is this legally mandated locally?
Check local mandates and labour laws when creating policies for a region. Are there any legal requirements that would not be fulfilled by the global standards in place? If so, what can be done to resolve these issues? Such a thought process can be extremely helpful in streamlining the overall policy-making process.
Does this affect fairness and global equity?
When drafting a new policy for a region, check how different it is from the global standards and even the local policies in other countries. If the differences might seem too stark and might lead to feelings of unfairness, it might be time to reevaluate the global standards as well, while trying to keep an open mind.
Will the localisation materially improve employee experience?
This is the core question that needs to be asked every time a company creates a localised policy. Creating a policy for the sake of creating can lead to increased complexity and confusion. In the spirit of “don’t fix it if it’s not broken,” new policies should mostly only be implemented when they can truly make the lives of employees better.
In the End…
Localisation is indeed important when it comes to making your employees feel comfortable and welcomed. Given the dynamic nature of people and the world, HR policies and strategies should always be consistent in intent but flexible in execution.
The goal of HR policies should not be consistency but rather coherence. Do the employees across regions feel they are getting the benefits they deserve? Do they feel their concerns are being heard and evaluated fairly, while keeping in mind the local customs and laws?
These are some of the many questions that policymakers should always strive to have a positive answer for.
