As globalization deepens and technology rapidly advances, internationalization has become a critical strategy for enterprises to enhance their competitiveness and expand market boundaries. However, multinational operations are accompanied by numerous challenges, including complex and ever-changing legal environments, cultural differences, and talent management issues. In this context, the digital transformation of human resources (HR) has emerged as a significant driving force in advancing enterprises' internationalization processes.

Recently, at the seminar hosted by Zhenyu Technology on "Empowering Enterprises' Internationalization Journey through Digital Transformation of Human Resources," CDP Group engaged in a lively discussion and presentation sharing with numerous enterprise managers and industry elites on the core challenges and opportunities faced by enterprises in their globalization processes. CDP Group provided profound insights and strategies to address the HR challenges of enterprise globalization.

HR Challenges and Strategies for Enterprise Globalization - Zhai Haifeng, Senior Vice President of CDP Group

01 Major Internal and External Challenges Faced by Chinese Enterprises "Going Out"

Boston Consulting Group research data shows that the success rate of international mergers and acquisitions by Chinese enterprises is relatively low, at only 67%, with a significant gap compared to countries such as Europe, the United States, and Japan, and nearly 20% lower than the best-performing countries like the United States.

Zhai Haifeng mentioned that three of the top five key internal challenges faced by enterprises "going out" are related to human resources. The most pressing issue is the scarcity of international talent, specifically individuals with an international perspective and cross-border management experience. He emphasized that preparations must be made before taking action, and the initial investment and advance team for going overseas are closely related to HR.

This year, the path for Chinese enterprises going overseas has been anything but easy, and can even be described as arduous, due to various reasons. He pointed out that it is essential to face up to the gap between the traditional models of Chinese enterprises and overseas internationalization models. However, Chinese enterprises currently face numerous difficulties when going overseas, such as language barriers and significant cultural differences, which are urgent obstacles to overcome.

When discussing how to overcome the challenges of going overseas, Zhai Haifeng shared several key phrases. He believes that the first priority is respect and good management, respecting local laws, regulations, and culture, and integrating into the local customs, culture, and legal and regulatory systems. Managing people is the most tricky aspect because people are the most diverse. Through respect and integration, effective people management can be implemented.

The road to internationalization and going overseas is long, and the most important thing is self-confidence. Everyone should face the challenges of going overseas with the six words "respect, integration, and self-confidence."

— Zhai Haifeng, Senior Vice President of CDP Group

In addition, he also mentioned the major external challenges faced by Chinese enterprises "going out," with cultural and regional characteristics being the foremost. For example, regarding the cost-effectiveness of talent, Chinese talent is different from other regions. Compared to Europe and the United States, Chinese talent is more cost-effective; compared to Southeast Asia, there may be slight challenges. However, HR personnel of overseas enterprises should have a standard to measure talent when evaluating them.

The second challenge is organizational development. HR is generally controlled centrally by the headquarters and governed autonomously by regions, which involves issues related to cultural concept penetration and control strength. He suggested adopting different strategies for overseas enterprises in different stages and countries. For instance, appropriately authorizing localized employees.

02 Stages and Strategies of Enterprises Going Overseas & CDP Service Philosophy

Zhai Haifeng divided the process of enterprises going overseas into three stages. He believes that in the past decade, most enterprises have been in the first stage of business development, with the key being to establish a foothold and ensure compliant operations.

Entering the second stage of rapid development, after the enterprise has gained a firm foothold, the management focus shifts more towards localized management. For instance, localized HR personnel must be in place. They are more familiar with the local language and culture, can interact closely with the headquarters, and can build a multicultural management system.

The third stage is mature operations, which few Chinese enterprises have reached, with most being European and American enterprises, such as most of the Fortune Global 500 companies, which rely on mature systems to address issues such as data-driven decision-making and planning.

In the Chinese market, management and systems were separate in earlier years. Zhai Haifeng introduced that CDP's initial philosophy was to integrate the two by implementing a procedural management system within the system, connecting the last mile of management and enhancing enterprise efficiency. Initially, it started from the perspective of compensation, integrating the procedural systems of multiple countries to ensure consistency in global HR management.

Today, the pursuit of system integration, process transparency, traceability, and auditability by global companies is what CDP excels at.

03 Sharing of Successful CDP Customer Cases

In terms of successful cases, CDP's global services are particularly efficient and practical for large enterprises.

CDP has successfully provided outsourcing services to a shared service center with 60,000 to 70,000 employees, achieving dual satisfaction of regulatory policies and business needs by embedding platforms and establishing a call center process system.

CDP has provided integrated system services to multiple well-known global retail chain customers, covering salary and data management for both Chinese and overseas employees, and extending to service platforms.

In addition, CDP has assisted a US medical device company (recently acquired by Siemens) in integrating its Asia-Pacific operations, achieving seamless business integration by connecting data and employee information through the platform.

Finally, he emphasized that compliance is CDP's core competitiveness. Since 2004, CDP has continuously conducted compliance audits and strictly adhered to international compliance standards such as cross-border data security, GDPR, and ISO.

To ensure the compliance and efficiency of its services, CDP has established three interaction centers in Asia-Pacific, Europe, and Africa, relying on local service networks and partners to form a powerful ecosystem that combines internationalization and localization, covering the entire employee lifecycle, salary management, talent development, and other aspects.

CDP Empowers the Global HR Service Layout of Overseas Enterprises - Song Dongqin, Senior Consultant for Global Compensation and HR Digital Transformation Consulting at CDP Group

01 Talent Management Strategies in the Globalization Process of Chinese Enterprises

Song Dongqin believes that in the globalization process of Chinese enterprises, talent management to support their overseas operations mainly revolves around three aspects: "selecting the right people, using them well, and bringing them back."

Firstly, it is about the recruitment and selection strategies for overseas talent in the context of the globalized market. She pointed out that HR departments need to broaden recruitment channels and fully utilize local recruitment resources, such as professional websites, campus job fairs, and industry associations, to build a richer pool of overseas talent. At the same time, she emphasized that selection criteria should not only focus on candidates' professional skills and experience but also their international perspective and language communication abilities.

Secondly, it is about the efficient allocation and motivation of overseas talent. She mentioned that when formulating a global compensation system, the principle of "globally consistent, regionally applicable" should be followed, along with the development of personalized incentive programs. Additionally, overseas employees need to be fully authorized and trusted, and an inclusive work environment should be created.

Thirdly, it is about the repatriation of overseas talent. She believes that HR departments should plan clear career development paths and promotion channels; help overseas employees update their knowledge and skills to pave the way for their return to work in China. At the same time, through family care and daily communication, employees' sense of belonging and engagement can be enhanced.

02 Sharing of Overseas HR Management Strategies

Song also provided unique insights into the impact of different business types on overseas talent management strategies. For example, in the initial stages of an enterprise going overseas, it needs to quickly respond to market changes. Therefore, the organization is relatively streamlined, requiring greater emphasis on efficiency and flexibility; talent-wise, it prefers the expatriation of core executives and technicians and the recruitment of local market and sales personnel; in terms of compensation, it focuses on HR's understanding of local laws, regulations, social security content and payment requirements, market compensation and benefits data, as well as the design of compensation and benefits for expatriates and local executives.

Subsequently, Ms. Song highlighted CDP's effective management strategies in global HR management, analyzing talent acquisition, talent expatriation, employment compliance, employee lifecycle management, reward and compensation structuring, cultural adaptation, and global HR digital management. Over the past few years, CDP has used this strategy to help a large number of overseas enterprises address the HR issues and challenges they face when going overseas.

Depending on the different development stages of clients, like the EOR model, direct employment, and consulting mode, there are prerequisites. Song Dongqin focused on sharing several common issues, which greatly benefited the participants, who expressed that the content was highly practical and guiding.

When discussing employee lifecycle management, Song Dongqin also emphasized the importance of the resignation process. She pointed out that different countries have different requirements for the payment of salaries and tax declaration for resigning employees, and HR departments need to understand and prepare for this in advance.

Additionally, she mentioned that when designing a compensation system, HR should consider both the global consistency of management concepts and regional differences in compensation elements, ultimately achieving the goal of "globally consistent, regionally applicable" to ensure internal fairness and external competitiveness. She provided specific measures and suggestions.

She mentioned that the CDP Global WorkLife global data integration and operation solution allows HR to manage global employee master data, leave and overtime, overall query across countries, and human resource data integration and analysis on a single platform. From the perspectives of technology, service, and operation, it integrates portals and creates new engines to achieve group data management. Relying on the global shared service center, it can provide customers with continuous and stable operations.

03CDP Global Salary Integration Case Sharing

Finally, Ms. Song shared global integration cases to demonstrate the strength and achievements of CDP in helping companies go global. She mentioned that through standardizing processes, unifying employee portals and employee management platforms, integrating and analyzing human resources data, and implementing regionalized compensation solutions, CDP has successfully helped customers achieve One World One HR.

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