With so many companies employing so many people around the globe, a question looms: Are the workers in smaller countries treated as full employees with access to the same information, policies and benefits other employees have?
Often, they are not, and the promise that HR outsourcing would help HR executives align and include all employees is not being consistently met. HR executives very much respect the value of giving all employees the same access to training, policies, job opportunities and HR values. But from that lofty ideal, HR leaders are quickly confronted with economics, language, systems and process variances that often bar the types of service that make employees in remote or small locations full members of the company community. All those obstacles can be overcome, but not without the dedication of management and very costly HR systems configuration.
In the early days of comprehensive HR outsourcing, some major providers took the position that "no country is too small for full services." That sales pitch very quickly went on the rocks for two primary reasons. One, providers had to get services up and running for the majority of employees first, and that occupied most of the bandwidth through the first two years of implementation. Two, the economics of bringing small-country populations into full HRO service were bad. Not only did the provider have to implement services and HR systems for very small populations with unique legal and language constraints, but the business managers of the small countries often saw their HR costs increase.
When it became evident that a business case could rarely be made for bringing a population of less than 100 people into full service, a number of companies, nevertheless, soldiered on and insisted on implementation because they felt that the federative power of a unified HR portal and consistent treatment of employees was worth the sacrifice. These companies have had to overcome fundamental problem areas to reach small-country populations.
Systems configuration and reporting is critical to getting headcount right for the headquarters office, and labor-cost aggregation is absolutely fundamental to getting accurate cost-of-goods-sold figures for generally accepted accounting practices.
Few of the larger HR outsourcing providers can offer uniform payroll services across remote and smaller countries, and that often leads to additional systems and reporting problems. Language issues are an additional problem, but are gradually diminishing with the availability of "any language" software, which is cutting down on the importance of local-language delivery for basic HR services.
Global HR executives want to continue to reach all their employees with services, training and messages about values and practices. There still remain substantial barriers to realizing that imperative, but those obstacles are waning in importance and size. Many global leaders recognize that it is worth the expense and time to reach small-country populations, even if the cost in management time and systems is quite considerable.
Lowell Williams is a director in KPMG's Shared Services and Outsourcing Advisory group, based in New York. He can be reached at lcwilliams@KPMG.com.