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Convergence of best practice and business sense: The role of Human Resources in a complex international landscape

19 April 2016 #Employment


Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.

As reports of violence, extremism and endemic corruption across the world seem an everyday occurrence a perplexed business executive, who knows that there is a big world out there to do business in, may ask where on earth can I safely travel and where can I confidently do any business?

Against this backdrop, the pressures on compliance in the UK are ever greater with powerful anti-bribery legislation and the Modern Slavery Act for businesses to contend with.

It is hard enough for multinationals to manage these issues and keep out of trouble. What hope is there for smaller businesses which the UK needs to export, but who feel that the risks outweigh any advantages?

The trend internationally appears to be negative to business, in that there is widespread instability or at very least lack of certainty about prospects in many countries. Yet the need has never been greater for international collaboration and exchange, building resilience in countries most suffering from climate change impacts and lack of resources.

Emerging economies require consistent transfer of technologies and expertise to address their huge need for sustainable development and infrastructure.

If businesses with the capability and economic strength to make a real contribution to development fight shy of the most vulnerable countries, then the chances are that in the same way many wealthy countries still suffer increased inequality, the same will be true across global economies, with the rich getting richer as they trade between themselves and the poor missing out on the economic growth they badly need.

How do we begin to address the challenges of expanding global trade and investment, especially when the countries that businesses feel safe to work with appear fewer each year?

Does Human Resources matter in this troubled landscape? Does the HR function have any contribution?

We must probably accept that conflict zones are beyond reach for most businesses, save those who prosper from conflict and may be assumed to be very good at measuring risks and ensuring a good return that justifies them.

Yet many post-conflict countries, and unsettled but peaceful countries, are still not often benefitting very much from the trade and investment they need, and it may be in these cases there is a valid role in addressing how international co-operation and collaborations may help grow business and produce profitable returns while also enhancing the growth opportunities of the emerging economies.

Many countries may even be totally settled and free of risks, but are relatively unknown to most businesses and lack of familiarity is itself undoubtedly an obstacle to starting new business ventures.

Human Resources has certain key offerings that may help address trade with these challenges:

Standards

The encouragement and observance of best practice standards in workforce matters, ensuring that the business is not at risk of breaching standards on health and safety, of breaching human rights or international guidelines on employment issues, or of offending against national legislation about transparency and avoidance of modern slavery. These are matters that HR professionals must know about in multinationals or in consulting to smaller businesses.

Supply chain management models

The development of new and effective models for supply chain management that include compliance with labour standards, and as workforce issues are often the highest point of risk it is logical that HR would be instrumental in helping shape the models and ongoing measurement of compliance. In this regard ISO 11000, when soon launched, may become a useful tool for HR to adapt to meet workforce needs across supply chains and cross-border collaborations.

International know how

Acquiring Human Resources know how and connections in target countries which will pave the way for business growth and risk reduction, including local trusted people and advisers. The Human Resources professionals working in the UK, for example, may not have much idea of practices that apply in a new target country but can be stronger in knowledge of international standards in general, the scope to apply or adapt them to meet local requirements, and also will know the right questions to be asking to build the know how needed for the future. It is fundamentally about knowing the labour landscape in which the business will be operating, and there is no one better than Human Resources to address this. Answers are always there to find, and useful networks accessible to HR can often supply the required experience and links to build a good picture of what has to be done and what pitfalls are to be avoided.

Proactive social responsibility

HR can be proactive in moving from ordinary compliance to positive social responsibility, against the background that most reputational risk is attached to people exploitation such as forced labour, child labour and low wages. If HR can demonstrate know how and models of collaboration that will reduce overall risk in challenging markets, then assuming  that profitable returns may also be higher to reflect risk, then there is a real contribution by HR to the business bottom line.

Monitoring external pressures

HR is capable of picking up on, monitoring, and advising the business on external pressures such as developing international labour standards or national legal requirements, trade union agendas nationally or globally, relevant campaigns and lobbying, and media reports of unsatisfactory work practices in the supply chain or overseas partners.

The more that Human Resources can be equipped with the required know how and stretch of skills to help develop international markets, the more chance there is for businesses to trade at lower risk and with more beneficial impacts on their overseas markets or suppliers.

It is time to build a better international profile for HR beyond the relatively few highly experienced HR professionals in major companies who have learned over years the ways to get things done. It needs to be a wider capability to match other professional expertise in core areas of international trade.

It may well be that the whole mindset of smaller UK businesses needs to change to seek out export markets and international collaborations, and again HR can and should be in the middle of what it takes to change mindsets and add value through facilitating training and knowledge sharing within and outside of the business, which is part of how the business moves forward in its understanding of the opportunities beyond its immediate markets.

That process may be a boost to the UK's global trade for the long term prosperity of the UK, but is also to the advantage of the many overseas countries who will be enthusiastic to work with UK companies and will be accepting of best practice that opens the door to these new relationships.

It is as ever the case that money talks, and if business comes with certain conditions and expectations then the general result is likely to be convergence on standards acceptable to all parties. A break through is needed to generate the growth in trade that the UK needs and enhanced HR can help deliver.

Michael Sippitt
Director
Forbury People Ltd

For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at employmentunit@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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