Thecost of noncompliance with employment laws go beyond paying fines and penalties to government agencies. In fact, 66% of all workplace-related lawsuits that go to trial are won by employees. This means that employers can end up paying millions in monetary damages to employees who are hurt by certain decisions that lead to action or inaction. But more importantly, these companies lose employee goodwill and tarnish their brand.
While many of us in the HR space are focused on more strategic aspects like workforce planning and talent management, we can’t forget about one of the more fundamental responsibilities of HR and HR systems: risk and compliance.
Having a “global” workforce means more than geography. It requires HR processes that can manage both strategic as well operational needs, such as storing employee records in every country, state, or municipality around the globe. In addition, companies must operate compliantly everywhere their employees work.
Employment and workforce programs, policies, and technologies vary by country, region, and even business units. And the more countries in which you maintain employees, the harder it can be to keep track of those regulations. HR systems play a crucial role in supporting localization best practices and HR regulations to help ensure ongoing compliance.
Localization improves global workforce management in 5 significant ways
Localization claims are everywhere. Most software vendors can, rightfully, claim they have customers with employees in virtually every country in the world. But true localization is much more. It’s not just about maintaining master data for employees in any given country. It’s about understanding how that data is captured and stored, what audit routines are provided by local authorities to ensure data quality, self-service capabilities specific to processes in a certain country, language support, time zone support, and, of course, payroll tax calculation, benefit plans, etc.; and, of course, all the governmental
reporting that goes along with it.
Here are 5 things that a true global AND local HR system should be able to do in order to claim true localization support and help companies better manage their global workforces:
- Common data fields that use local data formats: This includes data field formats for names, addresses, dates, bank accounts. For example, Canada’s postal code field must allow for up to 6 alphanumeric characters. In contrast, the U.S. version must only accept 9 numerals. Further, many government authorities provide validation routines that can prevent data errors. A localized HR system must not only support the correct data formats but also incorporate these validation algorithms to ensure your employee data is accurate.
- Capture of data specific only to a particular region or country: This data consists information that is not widely reported and, in some cases, may be illegal to store in certain areas of the world. Consider German tax codes that mandate citizens pay taxes to their place of worship. For reporting purposes and to help ensure payroll accuracy, HR must capture the name of an employee’s place of worship. However, in the United States, requesting and storing such data would be perceived as an intrusion of religious freedoms. Another example relates to job applications: attaching a picture to a CV is standard practice in many countries, along with age and marital status; such information is not typically supplied with a US resume.
- Language support: A truly global HR system must support multiple languages and multiple variations of those languages. A US employee would be fine to see the word color or defense but a British employee may see typographical errors and expect to see colour and defence. And language support is pervasive: it has to apply to processes, help text, and content.
- Compliance with local laws and regulations: The HR profession is heavily regulated – and for good reason. These regulations protect not only employees from poor business practices, but also employers from unintended lawsuits. Beyond correct tax calculations, compliance requirements extend to benefit enrollments, HR data such as race/gender reporting, minimum wage and overtime laws, and time-off management. For
example, did you know that it’s perfectly legal to have a “use it or lose it” policy for accrued vacation time in some regions, but it’s not at all legal in
others? On top of very detailed and important mandates, certain countries also require timely submission of reports in certain formats and delivery methods. HR systems must not only support collection and calculation of data but also deliver ready-to-file reports to government authorities.
- Guidance for an ever-changing compliance environment: The legal landscape of any region can be very confusing. By maintaining in-country resources to track, monitor, and interpret compliance changes, HR teams can better navigate and understand legal changes and their potential impact on HR systems and ways of working. Plus, the organization can better guide the IT area on technologies and system tweaks required to help ensure compliance. True localization applies not only to HR technology but to a truly global HR technology vendor as well.
SAP delivers a global, yet local, approach to workforce management
Leveraging an extensive network of global process experts and its proven experience in delivering cloud applications, SAP has gone beyond high-level globalization to deliver a “glocalized” cloud HR solution. With this solution, customers can access and manage one global system of record, fine-tuned to meet local needs.
There are three main components of SAP’s glocalized approach:
- Translation: Applications, content, and documentation that are delivered in 37 local languages.
- Globalization: Multi-currency, cross time-zone, and date/calendar support, as well as country/region-specific data field formats and validation routines.
- Localization: Track local business practices, country requirements, and statutory reporting for over 65 countries – all captured and accounted for
within the software solution and supported by in-country product management resources to track legal changes and work directly with the development teams to implement them. This also includes data capture, taxation, and filing requirements for over 25 countries for payroll (52 in total for the SAP on-premise payroll solution).
And SAP doesn’t stop there. It continues to build relationships with governments of a variety of countries, regions, and municipalities. By connecting with governing bodies of all sizes and localities, SAP product managers and developers have a better understanding of how current and future regulations affect businesses and impact the design of customers’ HR systems and processes. With this expertise, SAP is positioned to deliver a consistent level of support to companies worldwide – even in a dynamic, complex regulatory environment.