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International Human Resources Management

Staffing of International Business

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HRP is the process of forecasting a

MNC’s future demand and supply of

the right type of people in the right

number

The HRP process is linked to the

business plan of the MNC

HRP facilitates the realization of the

organization’s objective

Human Resources Planning

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Unique issues in managing International HRP

1. Identify top management talent early 2. Identifying critical success factors for

future international managers3. Providing developmental opportunities4. Tracking and maintaining commitments

to individuals in their international career paths

5. Tying strategic business plans to HRP and vice-versa

6. Dealing with multiple business units while attempting to achieve globally and regionally focused strategies

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Issues in staffing global businesses

Staffing MNC’s

Staffing orientati

on

Linkage between staffing

and growth of

MNC

Managing

expatriates

Female expatriat

es

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Staffing MNC’sLinkage between

staffing and growth of

MNC

Stage in Host Unit’s life cycle

Staffing impetus Hiring headcounts

Staffing Approach

Role of Parent MNC

Setting up the host unit (0 to 9-12months)

• Extremely critical phase in the subsidiary’s evolution• time consuming, multiple interviewing round• expensive as it might involve travel to parent country for final interview and discussions

•Focused Staffing challenges

• Top and Senior management positions is the focus

• Pace is slow, and micromanaged closely by the parent company,

• Usually work with a retainer-ship arrangement with a international staffing company

• Key positions could be out rightly assigned to parent company personnel

Normally 5-20

Usually an ethnocentric or a geocentric approach

Closely and carefully monitored by the parent MNC, literally handpicked

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Staffing MNC’sLinkage between

staffing and growth of

MNC

Stage in Host Unit’s life cycle

Staffing impetus

Hiring headcounts

Staffing Approach

Role of Parent MNC

Establishing the technology team to begin core operations activities (6months – 1.5 years)

• Apply stringent hiring techniques, • building a preferred employer brand, • offering high-end compensation to attract the desired talent, • careful screening to ensure top quality hires

•Unit staffing challenges are stepped up. • Selection criteria focus on very high quality technical competency levels

• Common vendor linkages with Placement Consultants and RPOs.

20-200 •Poly centric approach is preferred as the unit sets up its own operational unit

• Processes emulate from local market to get access to local talent

Role of Parent unit is somewhat reduced as the responsibility of the newly structured unit takes place.

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Staffing MNC’sLinkage between

staffing and growth of

MNC

Stage in Host Unit’s life cycle

Staffing impetus Hiring headcounts

Staffing Approach

Role of Parent MNC

Full blown operations of the host unit with significant role in establishing global objectives and targets

(1.5 -3yrs)

• Using multiple sourcing vendors and methods,

• Moderated compensation,

• Creating a branding on vocational campuses

• Increased staffing challenges as hiring targets get aggressive,

• Numbers become a critical success determinant for recruitment

• Competencies receive reduces focus as in house skill development initiatives are established.

• Newer linkages& with third party like Colleges, vocational Institutes and training Institutions and fresher hiring

Varies between 200- 1000

Depending upon nature of the business.

Polycentric approach as achievement of unit objectives becomes significantly self contained.

• Role of parent country is minimal.

• Focus on Global Framework for hiring using global selection tests• Leaving rest to the unit Mangers.

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Staffing MNC’sLinkage between

staffing and growth of

MNC

Stage in Host Unit’s life cycle

Staffing impetus

Hiring headcounts

Staffing Approach

Role of Parent MNC

Strong Operational leadership at the unit level while globally consolidating with Parent

• Move to Volume hiring as units global contributions are clear.• Referral hiring• Establishing long term liaisons with educational training institutions

Hiring head count are steeper between 200- 1000 depending upon nature of the business.

• Distinctly polycentric approach,

• Could get in to geocentric approach as labor costs provide the competitive advantage for the achievement of global objectives.

Role of Parent unit is at a strategic level, taking decisions to optimize global operating costs.

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Staffing MNC’sStaffing orientati

onOrientation Approach Advantages Disadvantages

Ethnocentricism

Parent company/ country nationals PCNs are employed at all senior and key positions.Local employees fill only lower level and supporting jobs

Transfer of parent company goals, objectives and know how /technologyEnsures control and coordination with HQ

Lack of localization of response to host country demands and needsLack of knowledge of local culture and work methods

Polycentricism Host country nationals HCNs are employed to staff all positions

Familiarity with business practices, socio-economic, political and legal environmentLower cost of staffingEffective localization of the subsidiary's operations

Communication challenges in dealing with parent country personnelChallenges in effective control and coordination over sub’s operationsLack of parent company nationals to gain international and cross cultural exposure

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Staffing MNC’sStaffing orientati

on

Orientation

Approach Advantages Disadvantages

Geocentricism

The multinationals TCNs runs the subsidiary as a independent entity. Focus building a center of excellence at a global level. Hiring the best person for the job….. could be a third country national

Globally competent personnelExposure to global best practices

Lack of sensitivity to all culturesTendency to run the subsidiary as a independent unit

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Staffing MNC’sManaging

expatriates

An expatriate is an individual who works anywhere but not in his or her own country of origin.

With increasing globalization more and more employees work overseas and have expats on their payroll.

Recruiting expats success depends on identifying potential expats:

Willingness and passion for working on overseas

assignment

Explore multiculturist, multilinguist, mulitfucntionalist,

background, citizens of the world and not of one country

Possess appropriate (technical/technological) skills for the

position overseas

Family background

Local laws of host country that determine expats posting

Cost differentials vs. benefits of a expat vs. a HCN

Expats in India Market leaders like Nokia, LG, Suzuki, IBM

and Samsung have seen the number of expats in their Indian subsidiaries swell.

Nokia has nearly 100 Finns at key positions in India.

Samsung has 25 Koreans LG has 30 Koreans Maruti has 15 Japanese Huawie has approx.125 Chinese

working at their offices in India.

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Selection criteria for international staffingManaging

expatriates

1. Technical Competencies : ability to work independently

with minimal dependence on parent company for day to

day activities

2. Relational Skills : ability to interact effectively with peers,

superiors, team members and clients/customers in a third

country with its nationals as well as with the parent

company nationals.

3. Ability to cope with Environmental variables :

awareness and ability to cope with the demands of the

political-legal, cultural, technological and economic factors.

Knowledgeable about the host country nationals attitudes,

beliefs, rules and norms, customs and social as well as

corporate etiquette

4. Family situation : ability of the family to cope with

relocation and living in a new country with its social and

cultural differences

Regional Selection Criteria: Some Realities*

Asia Pacific Europe & the Middle East

The Americans

Japan

Most Important Criteria

Skills or Competencies

Skills or Competencies

Skills or Competencies

Job Performance

II Most Important Criteria

Job Performance

Job Performance

Job Performance

Job Level

Least Important Criteria

Marital Status Marital Status Marital Status Projected assignment cost for the Individual

II Least Important Criteria

Language ability

Projected assignment cost for the Individual

Language ability

Marital Status

* ORC Worldwide 2002 , Worldwide survey of International Assignment Policies and Practices

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Mendenhall and Oddou Four Dimensional Framework for expat selection :

Managing expatriates

Self Orientation •Self confidence•Self esteem•Mental hygiene

Others Orientations•Expats ability to interact with host citizens•Build close relationships•Acculturate more easily in over

Perceptual Dimension•Ability to understand and appreciate why foreign nationals behave the way they do•Ability to make correct attributions about the reasons or causes of host nationals behavior

Cultural Toughness Dimension

•How culturally different is the host country from the expat’s own country determines the degree of cultural toughness•The lesser the difference the lower is the cultural toughness

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Romen’s Model on five predictors for a successful international assignment :

Managing expatriates

Job Factors Relational Dimension

Motivational State

Family Situation

Language Skills

Technical Skills Tolerance for Ambiguity

Belief in the mission

Willingness of spouse to live abroad

Host country language

Familiarity with host country and HQ operations

Behavioral flexibility

Congruence with career path

Adaptive and supportive spouse

Non-verbal communication

Managerial skills

Non-judgementalism

Interest in overseas experience

Stable marriage

Administrative competency

Cultural empathy and low ethocentricism

Interest in specific host country culture

Interpersonal skills

Willingness to acquire new patterns of behavior and attitudes

Expatriate Failure &Causes for Expatriate failure

It means that the assignee returns to the home country or resigns from the job before the international assignment is completed.

Globally, the expat failure rate varies between 25% and 40% and differs from country to country.

Many of the US based MNCs, have 10% to 40% failure rates.

Its less than 5% in Japanese and European organisations.

Reasons for Expatriate Failure( in descending order of importance)

US OrganisationsInability of spouse to adjust

Managers inability to adjust

Other family reasons

Managers personal or emotional maturity

Inability to cope with larger international responsibilities.

Japanese OrganisationsInability to cope with larger international responsibilities.

Difficulties with new environment

Personal or emotional problems

Lack of technical competence

Inability of spouse to adjust

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Causes for Expatriate failureManaging

expatriates

EFR : Expat Failure Rate

The three stages of expat adjustment on a new international

assignment:

The Culture Shock Cycle

Low

High

Months in a new culture

Mood

Tourist/ Honeymoon Stage

Disillusionment Stage

Adapting or

Adjustment Stage

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Managing Expat FailureManaging

expatriates

1. Design a job that maximizes role clarity, minimizes role conflict and compensates for role novelty with proper selection if a candidate with a high level of international experience

2. Use discerning measures for selection of international employees and their companion

3. Educate native and foreign employees in intercultural communication competencies

4. Provide opportunity for language lessons5. Provide a technical assistant to help with the details

of starting life in a different culture6. Create open, frequent communication with the home

organization to dispel feelings of abandonment and to ensure a favorable position upon returning

7. Create opportunities for positive social interactions in order to communicate and become better acquainted with host country members and with host country

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Staffing MNC’sFemale

expatriates

Several reasons account for minimal presence of females in foreign assignments :

Lack of Motivation: there is a perceived lack of motivation for female employees to relocate internationally

Stereotyping : common impression that women are best fit to work in their own countries

Capabilities : include skills and rescission to cope with stress while they score well on all of the critical competencies and score particularly high on relational skills

Organizational Process : include the diversity orientation of the organization, superior-subordinate relationship and home country selection processes for international assignments

Host Country limitations : certain countries do not encourage women expats

Family constraints : is a common delimiter

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Staffing MNC’sFemale

expatriates

Advantages of Female expatriates:

Good Relational Skills Rarity of women expats make them unique Shortage of competent managers, more in

the pool helps Female Role Models will facilitate more

female managers entering the pool

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Recent trends in International staffing

International Staffing

Offshoring

Dual Career

Couples

Recruiting

sources

Background

Checks

Work Force

Diversity

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Recent trends in International staffing

Work Force

Diversity

Diversity is a key metric on which organizations measure themselves

Diversity implies a workforce mix with fair representation of gender, ethnicities and races

Organizations have diversity policies that drive focused hiring to ensure the desired workforce blend

Diversity costs money, cash cost, opportunity cost and a heightened exposure to business risk, however organizations remain committed to it year after year

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Recent trends in International staffing

Offshoring

Outsourcing of non-core standardized services is the new facet of globalization

The spurt in hiring to staff these new-order companies in the emerging and the developing countries has hugely contributed to the revenue and growth of these countries

On the other hand the outsourcing country, usually in the developed economies, stands to loose jobs to low cost and high skills countries making it ‘outplacement and retrenchment a core activity

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Recent trends in International staffing

Background Checks

Background checks are carried out to verify personal, professional and other mandated information related to safe employment of candidates

Priced by quantum/scope of the personal and professional level of check that is being carried out, it is a core responsibility of the staffing team to ensure that the employee being on-boarded is cleared from all sides

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Recent trends in International staffing

Recruiting sources

Increasing demand for resources has driven widespread innovation in sourcing

Job portals and employee referrals are among the newer and more common sources

Focus on hiring at entry level and then grooming employees for growth is a also gaining popularity as another high retention sourcing strategy

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Recent trends in International staffing

Dual Career

Couples

Managing dual career couples Find a job for the trailing

spouse Commute/remote

assignments Sabbaticals Intra-company employment On assignment career

support