Over the past five years or so, we have seen an increased volume of two things:
- US-based programs expanding to Europe and other regions
- RFPs for 1st and 2nd generation programs that include multiple countries in the INITIAL scope.
This is a far cry from the early years of the VMS/MSP industry where often, programs were relegated to one department, location, country or service category.
Why is this Happening?
There’s no one answer, but some of the reasons for the planned international expansions include:
- The proliferation of VMS/MSP programs and the resulting organic growth into new geographies
- The increased focus on costs and risk
- The elevation of the program sponsorship towards the C-level of organizations
- The desire to gain enterprise visibility into spend categories
How Do You Go Global? Ask Yourself…
When you’re building a global program (and thus a global MSP), think “hybrid.” Shades of grey rather than absolutes are essential to the success of a comprehensive global solution.
I saw an example of this phenomenon with one Fortune 1000 global client with a large VMS and vendor neutral MSP. Encompassing several dozen countries, the provider and the client took the approach of created a traditional outsourced MSP in the United States. For other countries with a very low headcount, they used a more insourced approach. For India and Israel, they blended the two approaches. Instead of a one-size-fits-all solution, they created a bespoke, perfectly-fitted solution for each country.
In general, variation between insourced and outsourced tasks based upon geography is critical for success. Focus on what you’re trying to achieve and proceed from there.
The First Steps of the Journey
First, understand the scope of the work. That means getting good data. Headcount, suppliers, rates, countries, job titles: all are important.
Then, try to understand the laws and cultures of each country. Not ALL of them, just the ones specific to continent workforce management programs. Maybe certain types of assignments are illegal or non-compliant. Maybe you have to pay certain minimums or bonuses. Maybe you are required store data in certain places.
Know what you’re getting into. The most common reason for failure of a global expansion is assuming that EVERYTHING can be done the exact same way in every country.
Most people think that localization is just language and taxes. That doesn’t even scratch the surface. Here are some things to think about, broken down by major grouping:
Labor & Employment Laws
- Probationary periods
- Overtime rules
- Phases and phase changes
- Work week duration
- Notice periods
- Collective bargaining / Labor agreements
- National insurance
Personal and Data Privacy
- Safe Harbor & EU Data Privacy Directive
- Data Protection Act
- Cookie Law
- What is the definition of Personal or Sensitive data?
- What data is being captured?
- How secure is it?
Data Storage and Retention
- For how long must invoice data be stored?
- For how long can candidate data be stored?
- Where must invoice data be stored?
- Where must not candidate data be stored?
Tax Application and Invoicing
- Who is creating the invoice of record? Is invoicing on behalf of suppliers allowed?
- How is tax (i.e. VAT/BTW) being applied?
- Reverse charge mechanism
- Official tax invoice
- Invoice numbering
- Invoice currency
- Tax currency (often VAT must be reflected in local currency regardless of transaction currency)
- Data elements
- Invoice labeling (i.e. credit/debit)
- Pro forma invoicing…When? Why? How?
- Norms and practices
- Rate types
- Bonuses and incentives
- Recruitment methods
- Direct vs. indirectness
- Man vs. woman
- Superior vs. subordinate
- … many more
Still Want to Go Global?
Great. Just make sure you look before you leap.
- KNOW the goals and scope
- UNDERSTAND the countries and laws
- ACCEPT that one-size doesn’t fit all
- ASK for help
- ATTACK the rollout methodically
And remember…Rome wasn’t built in a day.