staffing of international businesses
TRANSCRIPT
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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