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Human Capital: focusing on people - the essential guide for fast-growth companies - EY - Global

Human Capital: focusing on people

The essential guide for fast-growth companies

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Key questions

Your human resources operation should have a strategic focus and continually add value to the operating side of your business.

Ask yourself:

  • Do you look after your people in the best possible way?
  • How easily can you put good people where you need them, when you need them?
  • Are your people rewarded in a way that will help your business to grow quickly?
  • How well do you identify and control the risks associated with a fast-growing, mobile and increasingly global workforce?
  • How often does your human resources operation develop new, value-adding ideas?



A fast-growth business must be able to put the right employees where they are needed, as soon as they are needed. That means your workforce is likely to become increasingly global and mobile.

Your business will only achieve its fast-growth potential if you attract, motivate and retain the best people, and if you deploy those people in the right place, at the right time.

So as you continue your journey to market leadership, a strong grasp of human capital issues should inform all of your important business decisions.

We’ve created this essential guide to outline the four core issues that an integrated approach to human capital needs to address. It should help you to reflect on the quality of people management in your business, and to identify areas where you might want to improve.

1. Getting people where you need them

A fast-growth business must be able to put the right employees where they are needed, as soon as they are needed. That means your workforce is likely to become increasingly global and mobile.

Mobility creates a host of potential management and compliance problems, both for employer and employee.

Points to consider:

  • Cost control. Just because you can deploy global staff at a moment’s notice, that doesn’t mean you necessarily should. How well do you understand the full cost of sending staff on an overseas assignment, especially for an extended period? Are these costs well managed?
  • Compliance concerns. When staff move overseas, or travel frequently, they can face a complex array of tax and regulatory issues connected to their immigration and expatriate status. As their employer, you need to understand and mitigate these risks.
  • People first. Your employees are, fundamentally, people — not just units of resource to be shuffled around. If you want to retain the best mobile workers, you need to look after them. A world-class relocation service is about more than moving house. A fast-growth business needs to ensure that its human resources function is world class. Otherwise, the battle to attract, motivate, develop and retain talented people will only be harder.

2. Offering satisfying rewards

A fast-growth business needs to develop and retain the kind of people who will help to achieve its goals. Salary is just part of the mix. Your capability to offer people attractive benefits, in a way that works both for you and for them, can make the difference between success and failure.

Points to consider:

  • Strategic focus. Your remuneration strategy must be aligned with your business strategy. As business needs change, review the connections between what you are trying to achieve and the key success measures — and incentives — that you have set your people.
  • Stakeholder transparency. In many jurisdictions, shareholders and regulators are taking a closer interest in remuneration issues, especially as they apply to your most senior people. Pay and benefit arrangements must balance your complex commercial needs with stakeholder concerns, with transparency when needed.
  • Share success. Giving key people a stake in the future success of your business — via an equity scheme — can be an effective way of motivating them. But operating such a scheme on a global level can create tax and legal implications. Make sure you understand the rules that apply and monitor them for changes.

3. Keeping on top of compliance

A fast-growth business needs to motivate and reward staff in an environment of increasing scrutiny and intervention from regulators and tax authorities.

Lately we’ve seen unprecedented and rapid changes in the global employment tax landscape. And regulators have introduced new reporting and disclosure requirements. The impact on employers can be significant.

Points to consider:

  • Keep ahead of change. Tax laws and regulatory requirements on employment issues have been changing with remarkable speed. For a global business, the risk of failing to spot the affect of a policy change can be significant. But the level of monitoring required is high. How well are you balancing the risk against this cost?
  • Going global. A global business needs a global compensation program, but these are often very complex, with pay delivered from multiple locations in a variety of ways. The environment for compensation reporting involves an increased level of risk as more and more countries focus on payroll taxes as a source of additional revenue.
  • Social security. The cost of social security contributions varies greatly from one country to another. When an employee relocates, the increased social security payments can often be more significant than the income tax costs. It’s important to analyze the cost of social security compliance for global employees and take action if payments are higher than they need to be.

4. Keeping on top of the people challenge

A fast-growth business needs to ensure that its human resources function is world class. Otherwise, the battle to attract, motivate, develop and retain talented people will only be harder.

Investment in this area can repay itself many times over. Human resources should not be seen as a back-office function. Get it right, and you can maximize the value of one your greatest assets: your people.

Points to consider:

  • Think big picture. Are you maximizing the value of your human capital, while minimizing global compliance risk? It is easier to address such a question if you take an integrated approach to people management, one that views human capital issues in a holistic way.
  • Boardroom issue. With the complexity of ever-changing global regulations, cost management pressures, frequent talent supply shortfalls, and continual shifts in the competitive business landscape, keeping your human resources function at the head of the pack requires focused, high-level effort.
  • Always innovate. To keep your human resources team where it needs to be, you must innovate constantly, as you would in other parts of your business.

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Contacts

For a report on the leading risks facing global businesses today, or to discuss the issues raised in this guide, please contact one of these SGM leaders:

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