As local companies demand a share of the global trade, their HR teams work steadily to understand new markets and countries to avoid difficulties ranging from finding the right kind of people to cultural clashes that could hinder growth.

For any HR team to succeed, there must be a solid understanding of the objectives of the business and the way its human capital can be harnessed to accomplish these goals. Additonally the culture of the company needs to be integrated into the local offices in a harmonious way.

A study conducted by the Human Resource Planning Society and the Institute for Corporate Productivity found that 60% of respondents believed HR professionals were not "reacting fast enough" to the challenges an organisation faces as it grows particularly abroad.

Benny Chong, vice-president human resources & organisational development, Sincere Watches, which has 80 employees in India, Malaysia and Australia, says HR leaders can be better regional strategists when they adopt a hands-on approach and are at the forefront of the business.

"They must adopt a pro-business mindset and align people strategies with business needs.," Chong says.

The right people trained the right way

When a company expands regionally, one of the major challenges is hiring the most suitable people to run the new offices or branches efficiently.

BreadTalk's group senior vice president (HR), Goh Khon Chong, says, "The way we grow our business is through franchisees and we have franchisees in Indonesia, Philippines, China, India, UAE, Korea, Hong Kong and Thailand." He says the company's target in the next five years is to expand to a total of 1,000 outlets, including its own outlets and franchisees.

The strategy to train the staff, who will activate such an ambitious expansion plan, is to bring key employees to Singapore for training and skilling up which they can then spread virally.

"Though the employees of our franchisees are not our direct employees, it is essential that we provide training to ensure effective and efficient operations," Goh says.

Trained up employees would then be responsible for giving the workers both on the job and theoretical training. "Based on estimates, even if it's just 10 to 20% sent to Singapore for training, it'll mean more than 300 to 400 a year (are actually trained), including our own employees. It's a real challenge". Breadtalk has outlets in other cities, particularly throughout China where it has more than 1,500 employees of its own.

If HR leaders are not familiar with the talent pools on the ground in new countries, it can lead to difficulties in hiring enough staff.
Chong says, "The main challenges for HR teams are alignment of HR practices and local knowledge, and spotting reliable sources to understand the labour market or getting information on HR rules in the particular country." Talent mobility, for instance, can be a serious issue, Chong says. HR teams must efficiently utilise the channels available to them in finding good workers.

Wanted: Adventurers

Companies should also search internally for the right people to manage their overseas offices, and there are many qualities that organisations look for in the leaders they choose. Most companies look for people who have a proven track record of performance across a range of business situations. Kulshaan Singh, country lead, Singapore, Hewitt Associates, says, "Transferrable skill sets and strong adaptability to new situations are important."

He cites cross cultural awareness and sensitivity as additional factors in recruiting internally.

Chong feels one of the more important functions of HR personnel is to look at succession issues and also groom talent at home to be posted overseas for meeting expansion challenges.

"We look for people with the X factor, especially during their interviews those who are adventurous, willing to speak up, and those who are willing to embrace innovation with responsibility. We look for people with head, heart and guts."

He also says that choice of overseas leaders depends on the phase of growth that the business is in. Overseas assignments could be handed out project-wise or with an annual package with key performance indicators attached.

Lim Eng, chief executive officer of National Computer Systems (NCS) Group, explains that besides leadership and people management skills, the individuals must have a global and cross-cultural outlook. The ability to embrace and lead change is also important, Lim says. NCS has about 4,000 staff located in more than 10 countries across the Asia-Pacific and Middle East regions.

"The right experience and the willingness to take challenges are important factors when we identify the right employees for overseas posting," Goh says, adding that an overseas assignment could mean a lot of sacrifices on the family and social fronts. The person must be capable and must know the trade. "Our three key pillars to selecting employees are commitment, integrity and responsibility."

Goh says overseas assignees are usually posted for three years, explaining that too short a stint may not help because the person may not be familiar with the location. "There are targets set every year depending on the location and country."

Lim says NCS's overseas assignees take on a wide range of roles and responsibilities, including that of country directors, consultants, project managers, team leaders, developers and support staff. He says internal recruitments aren't without hindrances. Singaporeans, he feels, are more concerned than their peers in the region about their children's education, the mobility of their spouse and re-entry when their assignments are over. "In a sense, the comfort and security that Singapore offers can also pose a potential obstacle if the posting is to a less developed country."

Getting in amongst it

For companies that are not well recognised outside of Singapore, hiring becomes a major issue. Lim says one of the main challenges HR teams face is to acquire the right talent for overseas set-ups, as fresh off the plane HR professionals can be clueless as to the best means or channels of attracting the right staff. Also, if company branding isn't established, during the start-up phase where the company may not have built a name for itself in the said country, attracting the right talent could prove difficult. "These challenges can be overcome by gathering information prior to the hiring process. It is also common for companies to work through a partner, customer or agency."

BreadTalk's strategy is to hire the key people first and then adapt to the locals and hire them. "We hire more in Singapore, China, Malaysia and Hong Kong," Goh says, adding that there are government agencies that can help. HR people should have good relations with the government of the nation concerned and understand local laws and practices and networking within their own profession is of critical importance. Goh says there are lots of government HR divisions in other nations; for example, in China, there are many government HR agencies that help in understanding the country, hiring people and in providing salary benchmarks. He explains that besides getting help from agencies in foreign nations, BreadTalk has been trying to increase its brand presence through media coverage, advertisements and community involvement.

Chong feels that hiring people through word of mouth or through reliable local contacts from related industries gives HR leaders more control over the recruitment process. "Alternatively, they may prefer to work with recruitment agencies and even outsource payroll to them."

Leave cultural baggage at the border

There are nations that have conflicting attitudes to Singapore and may not take too well to foreign companies that they see as interfering with their traditions or way of life. Deep knowledge of the people and the ability to adapt to them are essential factors in cross border expansion. Stereotyping of any race, spotting "typical" traits, and prevalence of inherent biases are issues HR professionals have to be acutely aware of to head them off.

Lim says HR practitioners must be familiar with the difference in cultures and laws in different countries. "For example, there are restrictions on the hiring of foreign workers in certain countries; in others, there could be strong anti-discrimination laws that we need to be aware of." Goh says it is imperative to understand the language of the particular country and have a healthy respect for its people. "In Asia, you need to build relationships," he says.

Chong feels that venturing into a new country calls for alignment of the business with country-specific needs; taking into account even basic things like public holidays, types of leave, benefits, and distance from home to outlets or offices.

"HR leaders must also respect each country's labour laws. They can also introduce the headquarters' employment policies as the overarching framework, but tweak it to align it with the country's needs."

Singh says a strong sense of national identity and culture, which comes in the way of company culture alignment, and strong stereotyping of cultures and values are major cultural issues related to regional expansions.

Sometimes, companies realise that the country they are trying to establish themselves in has a culture all its own that may be difficult to align with. The people may possess a strong sense of identity that could make it difficult for them to function as per the organisation's work code or ethics. It may be difficult for them to be one with the company or work together with the rest to achieve a goal that the management has set. Strong stereotyping of cultures exists everywhere, and employees from the homeland or from the new nation may find it difficult to accept each other without prejudices. This may act as a major impediment if an organisation is to move tin a unified way towards the same goal. Prejudices disrupt harmony and understanding, and give rise to animosity in the company.

Singh suggests that companies could bring in top management, who are cross culturally sensitive, from other parts of the organisation.
He adds says MNCs try to create environments and work rules that are similar to the ones they are used to in their homelands. It may not work sometimes as different countries have different styles of working and distinct work cultures. If a company plans to expand, it would be wiser to understand how the people and offices in the new country work and adapt to their ambience rather than impose its own style.

Singh also says there is always a chance that such difficulties are blamed on stereotypes or prejudices that might exist regarding national cultures.

He cites American MNCs in Japan as examples, where American MNCs are trying to align and create working environments similar to their US set-ups in Japan. The difficulties they have faced and even overcome need to be researched by companies looking at regional expansions so that they get an idea of the challenges expansion
brings about.

Singh opines that HR teams could keep an eye out for success stories of multinationals that have established themselves in the particular country and pick up legal know-how from trusted local sources. He also suggests that companies could bring in top management, who have been trained to be cross culturally sensitive, from other parts of the organisation.

Effective strategies

"It is important for HR leaders to keep abreast of regional labour market trends and conditions so that they can formulate effective HR strategies to attract and retain the right talent to support their companies' overseas expansion plans," Lim says.

HR leaders face numerous challenges during cross border expansions. Hiring the best talent, motivating people to work together, and realising the goals of the company through its people needs more awareness and heightened capability amongst HR professionals. A good knowledge of the labour market in new nations, good use of hiring strategies, cross cultural awareness, and the ability to train and retain old and new employees are what would help an HR team deliver.