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Subject: International HRM

Chapter: Recruiting and selecting staff for international

assignments

Class: bba-8
Ch-05
By
Syed Zohaib Hassan Kazmi

Recommended Book: International HRM by Peter j. Dowling(5th ed.)

Reference book: International HRM by Tony Edward

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 Chapter Objectives (cont.)
 The focus of this chapter is on recruitment and selection
activities in an international context. We will address the f
ollowing issues:
 The myth or assumptions of the global manager
 The Reason for expatriate failure
 Factors moderating intent to stay or leave the international
assignment
 Selection criteria for international assignments
 Dual-career couples
 Gender issues

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 Recruitment and Selection
 Hiring and then deploying people to positions where they can p
erform effectively is a goal of most organizations, whether dom
estic or international
 Recruitment:
 Recruitment can be defined as searching for and obtaining a pool of potentia
l candidates with the desired knowledge, skills and experience to allow an or
ganization to select the most appropriate people to fill job vacancies against
defined position descriptions and specifications.
 Selection:
 The process of Testing, interviewing and evaluating candidates for a specific
job and selecting an individual for employment based on certain criteria.
 Employee selection can range from a very simple process to a very complic
ated process depending on the firm hiring and the position.

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 Difference between Domestic and International Staffing
 Major difference between domestic and international staffing are
 first that many firm have predispositions with regard to who should hold ke
y positions in headquarters and subsidiaries (i.e. ethnocentric, polycentric, R
egiocentric and geocentric staffing orientations).
 And second, the constraint imposed by host governments (e.g. immigration
rules with regard to work visas and the common requirement in most countries to req
uire evidence as to why local nationals should not be employed rather than hiring for
eigners) which can severely limit the firm’s ability to hire the right candidate.
 In addition, as Scullion and Collings1 noted that, most expatriates are recrui
ted internally rather than externally,
 So the task of persuade managers (particularly if they are primarily working i
n a domestic environment) to recommend and/or agree to release their best
employees for international assignments remains a key issue for internation
al HR managers.

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 The global manager
 A global manager is characterized by the nature of the work he or she does,
typically within an organization with global operations.
 He or she has the capability to manage amid the complexity of business that
is conducted across divergent cultures and time zones
 A global manager can also be an expatriate, living and working abroad, but t
his is not always the case.
 Global managers can more specifically be seen in terms of three ideal roles
in a global organization. These are:
1. the global business or product-division managers who are tasked with global strategi
c positioning and asset co-ordination across the organization
2. the country managers who bridge between the local market operations and globa
l business objectives of the organization
3. the worldwide functional managers who help leverage knowledge and innovations
across the key functional departments throughout the organization.

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 Necessary Skills and Abilities for International Managers

 Skills and Abilities Necessary to Do  Skills and Abilities Necessary to Work

The Job In a Foreign Location

 Managerial  Adaptability
 Functional  Location-specific skills
 Technical  Personal characteristics

Improved Chances of Succeeding in An International Job Assignment

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 The global manager
 Multinationals depend on being able to develop a pool of international operators from
which they can draw as required.
 Such individuals have been variously labeled “international managers” or “Global ma
nagers”. The concept of a global manager appears to be based on the following myth
s or assumptions.

Myth 1: There is a universal approach to management.

Myth 2: People can acquire multicultural adaptability and behaviors.
Myth 3: There are common characteristics shared by successful inter
national managers.

Myth 4: There are no barriers to mobility.

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 Current Expatriate Profile
Category PCN (42%) HCN (16%) TCN (42%)

Gender Male (82%) Female (18%)

Age (Yrs) 30-49 (60%) 20-29 (17%)
Marital status Married (65%) Single (26%)
Partner (9%)

Accompanied by Spouse (86%) Children (59%)

Duration 1-3 years (52%) Short-term (9%)
Location Europe (35%) Asia-Pacific (24%)
Primary reason Fill a position
Prior international experience 30%

Source: based on data from global Relocation Trends: 2002 Survey Report, GMAC Global Relocation Services,
National Foreign Trade Council and SHRM Global Forum, GMAC-GRS 2003.

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 Expatriate Failure

The major challenge in international staffing is Expatriate selection.

Incase of expat selection, main issue is the Expatriate Failure.

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 Expatriate Failure
 In its simplest term, expatriate failure could be defined as 'premature return‘.
this definition 'might be very insufficient way to measure expatriate failure', a
s the ones who stay but failed to achieve expected performances, failed to a
dapt, to learn new things are more damaging to the organization.

Expatriate failure is usually defined as a posting that either e

nds pre-maturely or is considered ineffective by senior m
anagement.
 Most research into the matter has come to the conclusion that f
ailure rates are high and can vary between 20% and 50% depe
nding on the country

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 Expatriate Failure Rate
 In the recent years, many studies have reported high rates of expatriate failu
res.

 For example, around 10 to 20% of the US expatriates returned prematurely

while 33% of the ones who stayed had poor performance standards

 A survey of global trends in international assignments, by GMAC Global Rel

ocation Services, National Foreign Trade Council (NFTC) and SHRM Global
Forum (GMAC, NFTC & SHRM) in 2004 shows that 7% of expatriates prema
turely returned.

 However, as the cost of expatriates is relatively high ; a key issue in internat

ional staffing literature is expatriate failure and its cost.

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 Expatriate Failure Rates

Recall Rate Percent % of Companies

US Multinationals
20 - 40% 7%
10 - 20% 69
< 10 24

European Multinationals
11 - 15% 3%

6 - 10 38
< 5 59

Japanese Multinationals
11 - 19% 14%
6 - 10 10
< 5 76

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 Reason for Expatriate Failure
 Many researches have addressed the issues of expatriate failure and attemp
ted to identify the reasons that cause it. Some of these reasons are:
 the lack of cross-cultural adjustment by expatriates,
 their spouse or family and some dissatisfaction with the international as
signments leading to poor performance. (Job fails to meet expectations)
 Around 10 to 20% of the US expatriates returned prematurely due to these r
easons, while 33% of the ones who stayed had poor performance
 Other reasons are
 Wrong Candidate selection,
 increased responsibilities
 stresses and adjustment within the social context.
 Quality of life
 Remuneration dissatisfaction

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 Reason for Expatriate Failure (con…)

 US Firms  Japanese Firms

Inability of spouse to adjust
Manager’s inability to adjust
Other family problems
Manager’s personal or emoti
onal immaturity
Inability to cope with larger o
verseas responsibilities
 Inability to cope with larger o
verseas responsibilities
 Difficulties with the new envir
onment
 Personal or emotional proble
ms
 Lack of technical competenc
e
 Inability of spouse to adjust

European Multinationals: Inability of spouse to adjust.

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 Costs of Failure
 Costs occur in any international assignment particularly when an expatriate
prematurely returns home or fails to perform as expected.
 There are two types of costs, direct and indirect costs.
 Direct costs comprise the expatriate's salary, cost of training especially dur
ing the pre-departure preparation, travel and relocation expenses. This cost
could be between US$250,000 and US$1,250,000
 However, indirect costs are:
 Damaged relationships with key stakeholders in the foreign location
 Negative effects on local staff
 Poor labor relations
 Negative effects on expatriate concerned
 Loss of market share

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 Costs of Expatriate Failure
 Direct costs:
 Airfares
 Associated relocation expens
es
 Salary and benefits
 Training and development
 Averaged $250,000 per early r
eturn
 Costs vary according to:
 Level of position
 Country of destination
 Exchange rates
 Whether ‘failed’ manager is
replaced by another expatri
ate
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 Reasons for early return

1. Family concerns
2. Accepted new position in the company
3. Cultural adjustment challenges
4. Security concerns
5. Career concerns

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 Factors Moderating Expatriate Performance
 Factors moderating intent to stay or leave the international a
ssignment
 Inability to adjust to the foreign culture
 Length of assignment
 Willingness to move
 Work-related factors
 Psychological contract/employment relationship

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International Assignments: Factors Moderating Performance

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 Avoiding or Minimizing Expatriate Failure
 Managing the international resources is a major challenge, but it is an import
ant factor in the success or failure of the MNC. Many factors can contribute t
o the failure of MNCs, including expatriate failures due to premature return.
MNCs must control and mitigate any kind of failure and crisis including 'expa
triate crises'.
 In order to avoid expatriate failure or minimize its risk, proper and suitable int
ernational human resource management policies and procedures should be
in place.
 With such policies and procedures, IHRM can effectively and efficiently man
age the international human resources.
 First, they can efficiently plan for the selection of expatriates;
 second, pre-departure can be better prepared;
 third, continuous communication with the expatriates while they are in their i
nternational assignment can be maintained, leading to better planning for th
eir return to their home country with a proper position and job assignment;
 and fourth, repatriation can be effectively planed and implemented.

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 Expatriate Selection

Reduce expatriate failure rates by improving sel

ection procedures

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 Organizational Commitment
 Organizational commitment may be viewed as an organizational member's psychol
ogical attachment to the organization.
 Organizational commitment plays a very large role in determining whether a member
will stay with the organization and devotedly work towards organizational goals.
 Types of Commitment:
 Affective commitment
 Employee’s attachment to, identification with and involvement in, the organization
 Employees who are affectively committed feel valued, act as ambassadors for their organizatio
n and are generally great assets for organizations.
 Continuance commitment
 Based on assessed costs associated with exiting the organization
 Possible reasons for needing to stay with organizations vary, but the main reasons re
late to a lack of work alternatives, and remuneration.
 Normative commitment
 Employee’s feelings of obligation to remain
 Normatively committed employees feel that leaving their organization would have terrible conse
quences, and feel a sense of guilt about the possibility of leaving.
 Reasons for such guilt vary, but are often concerned with employees feeling that in leaving the
organization they would create a empty space in knowledge/skills, which would later increase th
e pressure on their colleagues. Such feelings can, and do, negatively influence the performance
of employees working in organizations.

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 Selection Criteria

 Technical ability
 Cross-cultural suitability
 Family requirements
 Country-cultural requirements
 MNE requirements
 Language

• These factors are all related so they should not be revised separately
.
• Technical Ability, Cross-Cultural Suitability and Family Requirements
, are the factors related to the individual,
• the country/cultural requirement, Language and MNE requirements a
re mostly influenced by the working situation they need to enter.

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Factors in Expatriate Selection

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 Factors in Expatriate Selection
 Technical Ability.
 For the selected candidate to perform a task, technical and the needed man
agerial skills is necessary.
 The assessment of the potential candidate is usually based on their previou
s working experience, where statements and evaluation records from the ca
ndidates superiors is available.
 Technical abilities are fundamentally the knowledge required to carry out a t
ask; technical abilities is associated to the working of tools.
 Cross-culture suitability.
 "According to Dowling and Welch, (2004) important Things to consider when
assessing the candidates cross-culture suitability, is language skills, culture
empathy, the attitude toward new cultures and the level of personnel and em
otional stability."
 Family Requirements.
 The success, of the expatriate abroad can be influenced by spouse/ family,
MNE's sometimes focuses too little on the impact that family may have on th
e expatriate. Families find it difficult to adjust as they can suffer from departu
re due to the inability to integrate into new environments.

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 Factors in Expatriate Selection
 country/cultural requirement:
 The human resource practitioner needs to consider the organizations requirements b
efore selecting a candidate, host country governments can stop the transfer of expatr
iates. The host government, is the ones that issue the working permits and visas to t
he expatriates, therefore, the parent country need to prove that there is no availabl
e host national country.
 Legislations and changes of the employee must be addressed; assignments abroad
means that the expatriate must move to another country with family to remote or war-
torn environments, where living conditions can be challenging.
 Some host countries do not issue work permits to females, this can make it difficult, f
or the spouse to adapt.
 Language skills:
 Language skill is a significant factor, knowledge of the host country's language can b
e considered essential for many top level management positions, along with the aptit
ude to communicate successfully.
 Knowledge of the host country's foreign language helps the expatriates and their fami
lies/spouse feel more contented in the new environment.
 When adopting a corporate language, which is different from what the, expatriate loc
al, language, is a fundamental that language skills need to be viewed as selection crit
eria.

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 Factors in Expatriate Selection
 Multinational enterprise (MNE) requirements.
 The MNE's requirements have an enormous impact on the decisions and which selec
tion criteria to use.
 Training skills are very important, so that expatriates can train locals and emphasize
negotiating skills in new international business environments.
 The period of the assignment is another factor influencing family/spouse.
 "According to Harris and Brewster, (1999) they suggested that international manager
s has many similar characteristics as those managers working in less complex enviro
nments, but are in need of additional skills regarding to handle the problems that may
arise internationally.“
 Technical abilities is an important factor in the case of selecting international staff, it
provides the employee with the basic understanding of what is included in their tasks
and what they believe they are capable of doing.
 The multinational enterprise (MNE) view the experience of expatriate as very importa
nt, prolong experience is needed to have the appropriate knowledge to develop a suc
cessful organization.

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 Harris and Brewster’s Selection Typology
Formal
Open
 Clearly defined criteria
 Clearly defined measures
 Training for selectors
 Open advertising of vacancy
(internal/external)
 Panel discussions
Closed
 Clearly defined criteria
 Clearly defined measures
 Training for selectors
 Panel discussions
 Nominations only (networking/reputation)
Informal
 Less defined criteria
 Less defined measures
 Limited training for selectors
 Open advertising of vacancy
 Recommendations
 No panel discussions
 Selector’s individual preferences
determine selection criteria and measures
 No panel discussions
 Nominations only (networking/reputation)
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Dual-Career Couples

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 Dual-Career Couples
 Dual career couples are families in which both heads of households pursue
careers and at the same time maintain a family life together.
 Both have high degree of commitment to their career

 What the organization should undertake to solve this problem:

 Organization should undertake work-life balance programmes, as in their ab
sence both men and women will be exposed to stress ,depression and anxie
ty.
 Which effect-:
 family
 Personal
 office

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 Solutions to the Dual-career Challenge
 Alternative assignment arrangements
 Short-term
 Commuter
 Other (e.g. alone, business travel, virtual assignments)

 Family-friendly policies
 Inter-company networking
 Job-hunting assistance
 Intra-company employment
 On-assignment career support

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Barriers to females taking international assignments

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THANK YOU

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