The employment markets overseas are still very soft. This is notably the case in most Western economies such as the UK, Europe and the US. With this as a backdrop, what are the implications for Australian HR professionals? What skills need to be developed to deal with offshore stakeholders effectively? These are the key questions for this month's Instep.

Lost in translation

As we come to the end of the Australian financial year, the US economy is still struggling. They have just capped a bleak period of economic news and statistics. A faltering economic recovery has been demonstrated by poor data in the areas of jobs, house prices, manufacturing and confidence with fears that growth will not fuel an economic recovery. The official unemployment rate is now back to 9.1% after spending some time in the 8s from a high of 9.8%.

Under a heading of "Long road ahead for US job seekers" in the AFR on 6 June, the picture painted for employment recovery in the near future was poor. Talk of 4-5 years before any true recovery continues to impact the equity markets and employers are in a "hunker-down" mode as caution is the rule of the day.

Europe and the UK don't appear much better, with Greek bond issues, record rates of unemployment in Spain, and a sluggish financial services market in the UK.

Whilst Australia is also softening again, the reality is that we continue to be in a strong economic position. Therefore, cross-boundary HR interactions about labour availability and its cost can be lost in translation as both parties are in very different economic circumstances.

The skill of translation

A recent discussion with a globally experienced HRD with strong insights into local and overseas market conditions highlighted that being globally aware in HR wasn't just about understanding differences in culture. She pointed out that, "it's also about understanding the differences in current work experience and environment".

She said, "imagine the pressure in many US-based companies for middle managers to hang onto their jobs due to the state of the economy. Across the US, management teams are grimly hanging onto their positions knowing that there's not much on offer outside. They feel under siege". She went on to say, "that's why they think that talent is on tap everywhere!"

She quipped, "imagine what happens when little 'Mr or Ms Happy Times' from Australia emails a request for a headcount increase or to increase packages as they have fallen below market. An answer like, 'You have got to be kidding! What planet are you on?' is probably the most likely response."

She further commented that one of her key contributions recently has been to coach a local CEO on how to get his agenda approved by his offshore masters. This has been for both business initiatives as well as locally-sponsored hiring decisions.

The trick then for HR professionals is to translate what is happening overseas back to the local business. By putting themselves in their overseas colleague's shoes, local decision makers can more easily develop their ability to "pitch" their communications with the right issues covered. This is certainly a higher order influencing skill that HR practitioners need to develop.

Translating for the HR function

So what does the issue of translating overseas conditions mean for local HR leaders? Firstly, the market in Australia is patchy. HR professionals are working in industries that extend from boom times to reasonably soft, but there are common elements:

  • There are significant HR skill shortages in areas such as resourcing, safety and compensation; and
  • There is pressure on wages in the generalist market right across the board.

What does that mean for HR Leaders? There is a need to influence overseas stakeholders on what the market is doing here compared to offshore locations. This can be tough. There isn't much in the way of reliable industry data on HR roles and pay levels and anecdotal feedback looks self-serving. Having said that, to get extra headcount or meet market demands, HR Leaders need to achieve this trick.

The final word

The HR profession in Australia is being asked to assist local business leaders to understand how to pitch their business and labour requests to overseas stakeholders. This "translation service" is all about communicating to overseas decision makers the balancing act that is being managed locally between required commercial outcomes and the challenge of the Australian labour markets. This is an important tool for any HR Leader with offshore stakeholders to add to their tool kit.