Long-Tail HR Operations: Key Challenges and How to Overcome Them
Globalization has fueled the growth of multinational companies that have spread across the world in search of customers or resources. Very often, these companies have a skewed distribution of employees. While a large portion remains in the home country and a few secondary countries, the remaining employees are dispersed thinly across many countries. These “long-tail” countries, with employee population as low as double or single digits per country, pose a unique set of challenges to companies, especially in the Human Resources (HR) function. The extremely low number of employees in the long-tail countries translates to lack of economies of scale for the delivery of HR services. The weak financial case often results in a cavalier attitude towards HR in these long-tail countries that, in turn, leads to regulatory, payroll, technology, and people challenges.
This paper describes the conventional ways in which companies have tried to solve the problem of long-tail HR – the in-house model and the traditional outsourced model – and their pitfalls. It then goes on to describe an emerging winning model that can potentially deliver high-quality HR services in long-tail countries without driving up the cost unreasonably. Further, it describes a few practices that buyers should adopt to get the best out of the winning model. The paper finishes by discussing a case study in which a service provider employs the winning model to successfully serve a global enterprise.