International Recruitment: Prof. Nishikant C. Warbhuwan

International Recruitment
-Prof. Nishikant C. Warbhuwan

Research Scholar, S.R.T.M. University Nanded,
S.R.T.M. University, Sub centre, Latur, India.
Email: nishikant.warbhuwan@srtmun.ac.in
International Recruitment
While recruiting people for international operations, the international HR

managers must identify the global competitiveness of the potential applicants at
the time of the recruiting process.
Approaches to Recruitment in IHRM Though the general aim of any

recruitment policy is to select the right people for the right task at the right
time, the HR department of international companies may adopt one of the
following three specific approaches available for recruiting employees for
global operations.
nishikant.warbhuwan@srtmun.ac.in
International Recruitment Approaches /Sources

1. Ethnocentric Approach
2. Polycentric Approach
3. Region-centric Approach
4. Geocentric Approach
Under this approach MNCs
at their headquarters formulate mission, objectives,
important decisions for the subsidiaries and expect the subsidiaries to implement them
and report back to all functional managers at headquarters level
Therefore it sources HR for subsidiaries from its own countries or the country where
headquarters are situated
When a company follows the strategy of choosing only from the citizens of the parent
country to work in host nations, it is called anethnocentric approach. Normally, higherlevel foreign positions are filled with expatriate employees from the parent country. The
general rationale behind the ethnocentric approach is that the staff from the parent
country would represent the interests of the headquarters effectively and link well with
the parent country.
Ex- Procter & Gamble, Philips, Samsung
Philips filled important vacancies by Dutch nationals before 1990s as it was a Dutch
Company
In 1996, 71% of subsidiaries of Japanese MNCs were headed by Japanese nationals
Toyota, Samsung follow this approach even today
Why do MNCs Prefer Ethnocentric Approach :
1. Non availability of qualified HR in Host country
2. High cost of host country nationals
3. Parent country nationals when work in foreign they are more committed
4. Parent country nationals when work in foreign shows highest belongingness
When Should MNCs Prefer Parent Country Nationals:
1. During early stage of establishment of subsidiary
2. Inadequacy of managerial and technical skills in host country
3. Grater need for maintaining close communication and coordination with

headquarters
4. . Grater need for maintaining uniform corporate culture
5. When the headquarters has core competencies
6. when home country nationals are less costly than HCN
Advantages:
1. Parent country nationals are familiar with headquarters, policies, systems
2. maintain close communication network
3. maintain close coordination
Disadvantages:
1. reduction in catching opportunities for host country
2. Decline in morale
3. Fails to get talent worldwide
Cross cultural management
MNCs under this approach treats each subsidiary as an independent company

and decentralizes almost all the operations and delegates decision making
authority to its executives
These executives formulate the strategies based on the mission and vision of
subsidiary, design product based on host country's environment
MNC sources perspective employees including senior managers for the

subsidiary from the host country nationals or local nationals
When a company adopts the strategy of limiting recruitment to the nationals of

the host country (local people), it is called a polycentric approach
Ex- Coca Cola
Why do MNCs Prefer Polycentric Approach
Policy of developing HCNs
Social Responsibility
High cost of Expatriates
Cultural fit for MNCs
Global Approach of MNCs
When Should MNCs Prefer Host Country Nationals
During Growth Stage of subsidiary
HR of Host Country is developed and fully qualified
Distinctive in way of serving customers and mode business
Cost of expatriates is High
Host govt. conditions
When Head quarters do not have any competency
Advantages
Less Cost of HR
Cultural fit
Employee retention
Employee job satisfaction
Appreciation by people
Disadvantages
Coordination becomes complex
Less promotional opportunities
No hands on experience both in head quarters and subsidiaries
Limits mobility
Different cultures at head quarters and subsidiaries
3. Region centric Approach
MNCs after operating successfully in a foreign country, think of exporting to

the neighboring countries of the host country
Ex- Hindustan Lever exports to Sri Lanka, Nepal, Bangladesh
At this stage foreign subsidiary considers the regional environment (Asian or

European) for formulating common strategies like pricing for that region
Similarly MNCs sources the prospective employees within the region in which
subsidiary is located
Ex- Bata (India) Ltd sources its employees from south east Asian regions
Ex- LG sources its employees from Asian regions

Why do MNCs Prefer Region centric Approach :
Non availability of qualified personnel from host country
Neighboring nationals possess more similar cultural values
availability of qualified personnel at neighboring countries at low cost

When Should MNCs Prefer Region centric Approach :
During transition between growth and maturity stages
When subsidiaries expand operations in neighboring countries
Inadequacy of managerial & technical skills host country

Advantages:
Culture fit
Comparatively less HR Cost
Meets expansion needs of HR
Perform better in neighboring countries
4. Geocentric Approach/ Global Approach
Under this approach the entire world is just like a single country for MNCs
They source all kinds of resources from all countries of world
Each subsidiary functions independently and autonomously
MNCs source for the best prospective employees in terms of suitability from entire
world
When a company adopts the strategy of recruiting the most suitable persons for the
positions available in it, irrespective of their nationalities, it is called a geocentric
approach.
Ex Ms. Indra Nooyi, the Indian national appointed as a CEO of Pepsi Cola Ltd, Many
European MNCs follow this approach
Why do MNCs prefer Geocentric Approach
Global Business Policy
Intensifying Competition
Technological Revolution
Innovative Practices in Functional Areas
Increasing Migration
When Should MNCs prefer Geocentric Approach
Maturity Stage
Customer Awareness
Non availability of Talent in Home and Host Country
Absence of Restrictions of Host Government
Advatages
Competent Pool
Shared Learning
Core Competencies
Flexibility and Adaptability
Reduction in Resentment
Best Talent at Less Cost
Transpatriates
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International Recruitment: Prof. Nishikant C. Warbhuwan

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International Recruitment

-Prof. Nishikant C. Warbhuwan

While recruiting people for international operations, the international HR

Approaches to Recruitment in IHRM Though the general aim of any

International Recruitment Approaches /Sources

Under this approach MNCs

at their headquarters formulate mission, objectives,

In 1996, 71% of subsidiaries of Japanese MNCs were headed by Japanese nationals

Toyota, Samsung follow this approach even today

Why do MNCs Prefer Ethnocentric Approach :

1. Non availability of qualified HR in Host country

2. High cost of host country nationals

4. Parent country nationals when work in foreign shows highest belongingness

1. During early stage of establishment of subsidiary

2. Inadequacy of managerial and technical skills in host country

3. Grater need for maintaining close communication and coordination with

4. . Grater need for maintaining uniform corporate culture

5. When the headquarters has core competencies

6. when home country nationals are less costly than HCN

1. Parent country nationals are familiar with headquarters, policies, systems

2. maintain close communication network

3. maintain close coordination

1. reduction in catching opportunities for host country

3. Fails to get talent worldwide

Cross cultural management

MNCs under this approach treats each subsidiary as an independent company

MNC sources perspective employees including senior managers for the

When a company adopts the strategy of limiting recruitment to the nationals of

Ex- Coca Cola

Why do MNCs Prefer Polycentric Approach

Policy of developing HCNs

High cost of Expatriates

Cultural fit for MNCs

Global Approach of MNCs

When Should MNCs Prefer Host Country Nationals

During Growth Stage of subsidiary

HR of Host Country is developed and fully qualified

Distinctive in way of serving customers and mode business

Cost of expatriates is High

Host govt. conditions

When Head quarters do not have any competency

Employee job satisfaction

Coordination becomes complex

Less promotional opportunities

No hands on experience both in head quarters and subsidiaries

Different cultures at head quarters and subsidiaries

3. Region centric Approach

MNCs after operating successfully in a foreign country, think of exporting to

Ex- Hindustan Lever exports to Sri Lanka, Nepal, Bangladesh

At this stage foreign subsidiary considers the regional environment (Asian or

Ex- LG sources its employees from Asian regions

3. Region centric Approach

Non availability of qualified personnel from host country

Neighboring nationals possess more similar cultural values

availability of qualified personnel at neighboring countries at low cost

3. Region centric Approach

During transition between growth and maturity stages

When subsidiaries expand operations in neighboring countries

Inadequacy of managerial & technical skills host country

3. Region centric Approach

Comparatively less HR Cost

Meets expansion needs of HR