International Human Resources Management

Staffing of International Business

Human Resources Planning

HRP

is the process of forecasting a MNCs

future demand and supply of the right type

of people in the right number
The

HRP process is linked to the business facilitates the realization of the

plan of the MNC

HRP

organizations objective

Unique issues in managing International HRP

1.

2.
3. 4. 5. 6.

Identify top management talent early Identifying critical success factors for future international managers Providing developmental opportunities Tracking and maintaining commitments to individuals in their international career paths Tying strategic business plans to HRP and vice-versa Dealing with multiple business units while attempting to achieve globally and regionally focused strategies
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Issues in staffing global businesses

Linkage between staffing and growth of MNC Staffing orientatio n

Staffing MNCs

Managing expatriate s

Female expatriate s

Staffing MNCs
Stage in Host Units life cycle Setting up the host unit (0 to 912months) Extremely critical phase in the subsidiarys evolution time consuming, multiple interviewing round expensive as it might involve travel to parent country for final interview and discussions Staffing impetus Hiring headcoun ts Normally 5-20 Staffing Approach

Linkage between staffing and growth of MNC

Role of Parent MNC Closely and carefully monitored by the parent MNC, literally handpicke d

Focused Staffing challenges Top and Senior management positions is the focus

Usually an ethnocentri c or a geocentric approach

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

Usually work with a retainership arrangement with a international staffing company Key positions could be out rightly assigned to parent company personnel

Staffing MNCs
Stage in Host Units life cycle 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 Staffing impetus Hiring headco unts 20-200 Staffing Approach 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

Linkage between staffing and growth of MNC

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

Unit staffing challenges are stepped up. Selection criteria focus on very high quality technical competency levels Common vendor linkages with Placement Consultants and RPOs.

Staffing MNCs
Stage in Host Units life cycle 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, Staffing impetus Hiring headcounts Varies between 200- 1000 Depending upon nature of the business. Staffing Approach

Linkage between staffing and growth of MNC

Role of Parent MNC Role of parent country is minimal. Focus on Global Framework for hiring using global selection tests Leaving rest to the unit Mangers.

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

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

Creating a branding on vocational campuses

Staffing MNCs
Stage in Host Units life cycle Strong Operational leadership at the unit level while globally consolidating with Parent Staffing impetus Hiring headcounts Hiring head count are steeper between 2001000 depending upon nature of the business. Staffing Approach Distinctly polycentric approach,

Linkage between staffing and growth of MNC

Role of Parent MNC

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

Role of Parent unit is at a strategic level, taking Could get decisions to in to optimize global geocentric operating approach as costs. labor costs provide the competitive advantage for the achievement of global objectives.

Staffing MNCs
Orientation
Ethnocentricism

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

Advantages
Transfer of parent company goals, objectives and know how /technology Ensures control and coordination with HQ

Staffing orientatio n Disadvantages

Lack of localization of response to host country demands and needs Lack 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 environment Lower cost of staffing Effective localization of the subsidiary's operations

Communication challenges in dealing with parent country personnel Challenges in effective control and coordination over subs operations Lack of parent company nationals to gain international and cross cultural 9 exposure

Staffing MNCs
Orientation
Geocentricism

Staffing orientatio n Disadvantages

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

Approach
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

Advantages
Globally competent personnel Exposure to global best practices

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Staffing MNCs
own country of origin.
With

Managing expatriates

An expatriate is an individual who works anywhere but not in his or her

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

expats success depends on identifying potential expats: and passion for working on overseas assignment multiculturist, multilinguist, mulitfucntionalist, background,

Willingness Explore

citizens of the world and not of one country

Possess

appropriate (technical/technological) skills for the position

overseas
Family

background

Local
Cost

laws of host country that determine expats posting

differentials vs. benefits of a expat vs. a HCN

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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.

Selection criteria for international staffing

Managing 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

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Regional Selection Criteria: Some Realities*

Asia Pacific Europe & the Middle East The Americans Japan

Most Important Criteria

II Most Important Criteria Least Important Criteria II Least Important Criteria

Skills or Competencies
Job Performance Marital Status

Skills or Competencies
Job Performance Marital Status

Skills or Competencies
Job Performance Marital Status

Job Performance
Job Level

Projected assignment cost for the Individual Marital Status

Language ability

Projected assignment cost for the Individual

Language ability

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

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 expats own country determines the degree of cultural toughness The lesser the difference the lower is the cultural toughness

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Romens Model on five predictors for a successful international assignment :

Job Factors
Technical Skills

Managing expatriates

Relational Dimension
Tolerance for Ambiguity
Behavioral flexibility Nonjudgementalism Cultural empathy and low ethocentricism Interpersonal skills

Motivational State
Belief in the mission
Congruence with career path Interest in overseas experience Interest in specific host country culture Willingness to acquire new patterns of behavior and attitudes

Family Situation
Willingness of spouse to live abroad
Adaptive and supportive spouse Stable marriage

Language Skills
Host country language
Non-verbal communication

Familiarity with host country and HQ operations Managerial skills

Administrative competency

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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

Organisations

Inability of spouse to adjust Managers inability to adjust Other family reasons Managers personal or emotional maturity Inability to cope with larger international responsibilities.
Japanese

Organisations

Inability to cope with larger international responsibilities. Difficulties with new environment Personal or emotional problems Lack of technical competence Inability of spouse to adjust

Causes for Expatriate failure

EFR : Expat Failure Rate The three stages of expat adjustment on a new international assignment: High
Tourist/ Honeymoon Stage

Managing expatriates

The Culture Shock Cycle

Mood

Adapting or Adjustment Stage Disillusionmen t Stage

Low

Months in a new culture

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Managing Expat Failure

Managing 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 lessons 5. Provide a technical assistant to help with the details of starting life in a different culture 6. 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 20 country members and with host country

Staffing MNCs

Female 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 MNCs
Advantages of Female expatriates:

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

Work Force Diversity Dual Career Couples Offshoring

International Staffing

Recruiting sources

Backgrou nd Checks

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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 26 cleared from all sides

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
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