One of the most important things a company can do to ensure the success of its international initiatives is to integrate the HR department into the planning and execution of these projects, according to Chris Tice, a senior consultant at Boeing.
With operations in about 90 countries, the Chicago-based aerospace company has a large overseas customer base but in recent years was struggling to compete with competitors for international contracts, Tice said in a recent webinar. The company was losing a "huge" number of proposals because its bids were too high and often out of touch with what was involved in doing business in the local market.
Despite Boeing’s global reach, its overseas workforce represents a small fraction of its 170,000 workers, and the company remains very U.S.-centric, Tice said. Given this environment, it was not uncommon for proposals to be written by people in the U.S. who had little or no contact with the countries where the project would be implemented.
"In some cases, even if they did win the bid, they would notify HR about what they were planning to do only to find out that the plan was very difficult to execute because they had not realized that the specific skills they were looking for were not in the country and that government rules prohibited or delayed bringing in the required staff," he said.
When opening a new office in Saudi Arabia, for example, the company hired a large number of expats but then was surprised to learn that it had to add about 400 Saudis to its payroll to be in compliance with local hiring quotas that it hadn’t fully understood. In another instance, Boeing found that one of its proposals included parts that would have been unlawful to implement if it had won the contract.
According to Tice, Boeing was undertaking initiatives without first engaging in the kind of activity necessary to prepare for the challenges and questions it would encounter, and the people drafting the proposals weren’t taking full advantage of the expertise or knowledge available to them.
"In many cases, the business development professionals did not have the expertise about the location being targeted, especially if the company was not doing business in that country already, and may not have known who in the organization to speak with to get the required information," he said.
To counter this problem, Boeing has developed new procedures to encourage and facilitate more dialogue between the business teams and the HR offices in its overseas locations.
The company has produced a detailed list of questions that need to be considered about the local market prior to writing an international business proposal. It has also created a database with the names of the most qualified experts in HR to contact to get information about how to do business in the various places where it has operations across the globe.
For other companies looking to do business overseas, Boeing offers a cautionary tale about the failure to involve human resource departments in all aspects of an international project. Not only can HR teams ensure compliance with local laws, but they can also help business teams win contracts by arming them with essential knowledge about the local labor pool, salaries, mobility issues, and employment and immigration laws.
Bloomberg BNA’s International HR Decision Support Network provides resources, including labor and employment law primers on more than 70 countries, to help you stay compliant and develop policies for your international operations. Start your free trial today.
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