The internationalization of companies and human capital management globally:
challenges of Italian companies

Global human capital management, a consequence of the internationalization of companies, brings many challenges. In dealing with them, HR managers in the companies we assist are on the front lines[1]. At a recent conference held in Milan devoted precisely to these professionals and the challenges they currently face-and which we were privileged to attend-it emerged that HR managers need, more than ever, to be supported by professionals who understand their specific needs.
We took the time for discussion with those who are, in fact, our day-to-day interlocutors, as well as with other experts in the field, to delve into opportunities and risks that may arise along a path that transforms companies from local or regional structures to globally competitive players.
We share some of our reflections, believing that they help us, as labor lawyers, to provide increasingly high-quality professional support (and it is not at all surprising that the reflections are also widely shared by colleagues and HR managers around the world…).

Human capital, a crucial factor in business internationalization.

The reasons why a company chooses a path to internationalization are many: they may be strategic, such as the need to access new markets for greater growth and competitiveness or, on the contrary, to reduce costs; they may be related to reasons that concern, precisely, human capital, such as the need to acquire resources or talent outside the usual borders or new skills.
Internationalization therefore necessarily passes through the definition of a strategic plan, the implementation of which is, objectively, one of the most complex aspects that a company’s management must manage. There are many factors to be evaluated (from operational costs to tax opportunities, from aid and incentives, regulatory and bureaucratic barriers, to the geopolitical situation…).
The most critical aspect is that of human resource management, since the success of the strategy necessarily depends on the intervention of people.

The HR manager, a true catalyst for business transformation.

The HR manager’s participation in strategy definition and implementation is therefore crucial.
Managers and their advisors agree that the starting point is, without a doubt, represented by the company’s values and culture and that these must necessarily evolve to come to reflect the international scope with which the structure wants to endow itself. In this sense, the winning strategy appears to be to work from observing the concrete needs encountered in different local and regional contexts and then to bring out globally shared principles. The major challenge of internationalization could thus be encapsulated in one concept: maintaining cohesion.
This translates into specific objectives pertaining to human resource management. The Manager will be expected to contribute to:

• Managing multiculturalism: Helping to solve very concrete problems when a given work team is composed of people located in different countries (at the conference, someone illustrated the difficulties in organizing an online meeting for a team composed of some people located partly in Stockholm and partly in Barcelona since, for the former, the chosen time corresponded to the beginning of dinner while, for the latter, the same time could very well correspond to the end of lunch), or again, when training needs imply having to deal with issues that are likely not to be understood in the same way globally;
• Implement effective global policies and practices: the HR manager will need to assess the need to equip the company with programs, specific policies, creating a true “people strategy” at the global level;
• Managing resource mobility (expatriates are often key to “contamination”): HR managers indicate that, generally, after an initial “honeymoon” period, internationalization of a resource can prove to be a shock (it must be considered that the resource has to adapt to a new role, has to integrate another organization, with different policies, different colleagues, and if it changes country of residence and if the relocation also involves the resource’s family, in which case, support from the company is essential);
• Managing resource involvement (so-called “retention”): in order to keep motivation high, particularly in expatriate resources, it may prove useful and appropriate to resort to tools such as personalized bonuses and incentive policies, taking care to also anticipate perplexities related to differences in the evaluation of the treatment received between the country of origin and the country of destination (because the comparison is not always relevant);
• Contributing to the cohesion of work teams: this comes through recruiting resources who do not necessarily speak the local language to overcome the language barrier (despite the fact that the company has a global structure, if the work team is composed only of Italians, in meetings, they will tend to speak only Italian even if the language of communications adopted in the company is English), through the construction of training programs, which include international experiences not necessarily focused on everyone’s daily “core” activities.

In conclusion.

The internationalization of a company and the management of its human capital globally represent a complex but opportunity-rich terrain, and in this context, the HR manager’s intervention is widely recognized as a determinant of the success or failure of the evolution plan. However, as decision-making processes become more complex and external influences to be considered ever greater, the challenge primarily affects their function, which must necessarily expand, adopt a global dimension and equip itself with increasingly articulated skills.
For this reason, all the interlocutors agree that the assistance of a trained and specialized consultant becomes essential, in particular, when approaching complex and diversified regulations (in Italy, for example, aspects such as immigration regulations are particularly complex to manage in the company). We, as lawyers, therefore have an important role to play, working alongside HR managers, so that companies can deal smoothly with this complex process of transformation that represents the internationalization of the structure.
[1] Another interesting theme, on which our interlocutors often dwell, is that of the loneliness of the HR manager who, despite playing a central role in most business development or transformation processes, often feels caught between the hammer and the anvil.