Look Back Before You Look Forward – What in the World Has Happened in the World?

2022 has been a strange year. Immediately following a devastating two-year global pandemic, Russia invaded Ukraine, the EU is facing an energy crisis, tensions between the U.S. and China are at a record high, and record levels of inflation have plagued the global economy. As a result, employers are seeing increased pressure to react to these geopolitical developments and numerous social issues that have surfaced this year, including abortion rights in the United States. Global HR leaders’ roles have evolved quickly, often moving them to the center of business strategy and CHROs are increasingly expected to provide answers to everything. 

At HR Policy Global, we strive to interpret and analyze HR-related public policy developments around the world. This year, we found ourselves asking the following questions, among others: What made Japan change its decades-long tradition of a male-focused workforce, and begin wanting more women in the workforce? Why has the RRLM under the USMCA been enforced so well in Mexico? What is the current and future impact of Brexit on the labor and employment landscape in Europe? 

In the Asia Pacific region, the reality that one in four people will be 60 years or older by 2030, according to the World Health Organization, combined with unwillingness of younger generations to marry and/or have children, is having significant influence on public policies on economics and labor. These new and enhanced policies across Asia address who needs to work, how long they should work for, and how they will be paid in retirement.  

The past 12 months have witnessed increased retirement ages in Vietnam, Singapore, and Indonesia. Discussions continue in the Philippines to scrap the mandatory retirement age entirely. China and Vietnam allowed the first private pension plans to counteract the significant stress on the public social security system for retirees. Japan introduced a suite of labor law updates encouraging women to remain in the workforce, including a focus on parental leave provisions. Korea provided financial incentives for women to have more babies to counteract the negative birth rate. We anticipate an increased focus on encouraging women to join the workforce and childcare in the region. 

In Europe, Tom Hayes of BEERG provided an analysis of the upcoming EU laws. The changes come in response to new forms of work and the evolving expectations of workers during and after COVID – regulations on work from home, gig workers and their rights to collective bargaining and access to benefits, and gender equality issues. You can also see an emphasis on forced labor issues in the global supply chain – a combination of an increasing influence from ESG movements to the business community and the EU adopting measures in line with the United States against China.

Latin America’s major concerns are the significant inflation rate and uncertain economic future generally. Regional inflation has been above 15% for the past couple of months. Weaker currencies, high commodity prices, and de-anchored expectations in some countries will keep inflation elevated this year and next, despite higher interest rates and government subsidies. The region’s economic instability, coupled with intense upcoming presidential elections in major countries – Brazil in November, Argentina in 2023, and Mexico in 2024 – will further accelerate operating volatility for businesses. On the policy front, we will likely see a power battle between governments trying to attract more investments and a workforce that is looking for more protection and social equality. 

Outlook:  Social changes inevitably filter into employment practice and standards and their impact on employers is significant and incremental. They not only change the way employees view their world, but also reshape their interaction with and expectations of their employers. In an environment where the competition for talent has never been more evident, being able to stay ahead of the game and help your employees to understand why and how you do what you have done, would be a key for successfully managing and retaining a diverse global workforce. 

Want to chat more with us? Register for our December Fundamentals of Global Labor Relations course today!