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The Importance Of Human Resources When Expanding Or Relocating A Business Overseas

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The importance of your HR department when expanding a business overseas is paramount; it would be the role of HR to ensure that all employees in the overseas office are following the Organisational Strategy of your founding UK company.

When expanding your business overseas for the first time you would generally have an offshore ‘Partner’ to advise and assist your UK based HR department. This ‘Partner’ would advise on how to incorporate the polices and procedures into the overseas business while taking into account various cultural differences and employee legislation of the overseas country.

The Chartered Institute of Personnel Development (CIPD) conducted a report evaluating the importance of HR throughout the process of moving a business or setting up a new business overseas. It was reported that 60% of respondents from their survey stated that HR had been involved in the strategic decisions regarding offshoring from the initial stage, with 70% of respondents with experience of offshoring, believing that HR should play a central part in managing the change process when these projects are being implemented.

The CIPD report continued to state that HR should take on an active role at the beginning of the offshore in order to take into account the implications of employment regulations both in the UK and overseas helping to identify risk, and beginning work on the design and redesign of jobs arising out of the offshore.

Along with the offshore ‘Partner’ the HR department would have a vital role if a UK business expanded to offshore offices; the HR department would need to ensure that all policies and procedures were in bilingual form while also taking into account the offshore Partner’s advice in regards to cultural differences that the new country may have.

To ensure a smooth transition when setting up an offshore business the employment of multilingual staff or consultants would be most beneficial in the long term. By having multilingual employees, the business can communicate effectively with their new offshore employees, ensure they understand the company objectives, explain to them the company policies and procedures and answer any questions effectively.

From looking at the various points mentioned it is clear to see that HR has a crucial role when a business is setting up or expanding abroad. As well the recruitment, implementing of policies and consultation with staff, HR also has to take into account the Legislations involved when recruiting overseas.