International Staffing

1. International Staffing Faculty: Ms. Toral Shah

2. Definition Human resource management (HRM) is the set of activities directed at attracting, developing, and maintaining the effective workforce necessary to achieve a firm’s objectives.

3. Components of HRM • Recruitment • Selection • Training & Development • Performance Appraisal • Compensation • Labor Relations

4. Complications for IHRM compared to HRM International HR managers face a more complex task than their domestic counterparts because differing cultures, levels of economic development, and legal systems among countries may require companies to adapt their hiring, firing, training, and compensation programs to each country.

5. Complications for IHRM compared to HRM Firms must decide whether managers will be selected from the home country, from the host country or from third countries. Training and development in an international firm may be more complex than in a domestic firm. Compensation systems must be adapted to meet the needs of each country’s labor market.

6. Complications for IHRM • Host country or expatriate? HCN: • Do they have the expertise for the position? • Can we recruit them from outside the company?

7. Reasons for expatriate failure • Spouse fails to adapt • Manager fails to adapt • Other problems within the family • Level of responsibilities • No motivation for assignment

8. International Managerial Staffing Needs There are two broad categories of staffing needs facing international human resource managers: (1) recruiting, training, and retaining managerial and executiveemployees; and (2) recruiting, training, and retaining nonmanagerialemployees such as blue-collar production workers and white-collar office staff.

9. International Managerial Staffing Needs For nonmanagerial employees, international firms normally adapt their compensation and performance appraisal systems to local laws, customs, and cultures. E.G., U.S. workers appreciate feedback from an appraisal system, German workers are resentful of feedback.

10. International Managerial Staffing Needs Most firms begin their international expansion with small-scale exporting. Thus, during a firm’s initial foray into foreign markets a home-country citizen, who may or may not have special training in working in foreign markets, usually manages the firm’s international transactions.

11. International Managerial Staffing Needs Later when the firm establishes an international department, subsidiary managers (usually host country citizens) report to the vice-president of the international division (usually a home country citizen).

12. International Managerial Staffing Needs As a firm further expands its operations in a global organization, a team of managers with expertise in the firm’s product lines, necessary functional skills, individual country markets, and the firm’s global strategy is usually assembled.

13. International Managerial Staffing Needs Firms that centralize decision making at headquarters typically favorhome-country managers while firms that decentralize decision making to the subsidiary level often employ host country nationals. most companies have a combination of both home and host country managers.

14. International Managerial Staffing Needs Managers can be hired from three groups: parent country nationals; host country nationals; and third country nationals. Parent country nationals (PCNs) are residents of the international business’s home country who are transferred to one of its foreign operations.

15. International Managerial Staffing Needs Communications and coordination with corporate headquarters is typically facilitated when PCNs are employed because they normally share a common culture and education background with headquarters’ staff.

16. International Managerial Staffing Needs PCNs may however, lack knowledge of local laws, culture, economic conditions, social structure, and political processes. Moreover, they may be expensive to relocate and maintain the host country. In addition, because a host country may impose restrictions on the number of employees that can be transferred, a company may not have the freedom to hire whom it wants.

17. International Managerial Staffing Needs Host country nationals (HCNs) are residents of the host country, and are the most common choice for mid-level and lower-level jobs. Employing HCNs is popular because they are already familiar with local laws, culture, and economic conditions.

18. International Managerial Staffing Needs Also, Host CNs may be cheaper than PCNs because a firm can avoid the costs such as relocation expenses that are associated with PCNs. However, an HCN may not be familiar with the firm’s corporate culture nor its business practices.

19. International Managerial Staffing Needs Third country nationals(TCNs) are citizens of neither the firm’s home country nor of the host country. TCNs are most likely to employed in upper-level or technical positions. TCNs and PCNs are collectively known as expatriates (people working and residing in countries other than their native country).

20. International Managerial Staffing Needs An ethnocentric staffing model may be used to help a firm choose among HCNs, PCNs, and TCNs for various positions. The model indicates that PCNs staff most higher-level positions.

21. International Managerial Staffing Needs Other firms may follow a polycentric staffing model where, based upon the belief that Host CNs know the local market best, the use of HCNs is high. Finally, firms that want to hire the most qualified person for the job, regardless of the individual’s nationality, follow the geocentric staffing model.

22. EXPATRIATE TRAINING • TRAINING RIGOR The extent of effort by trainees and trainers required to prepare the trainees for expatriate positions

23. LOW RIGOR TRAINING • Short time period • Lectures • Videos on local culture • Briefings on company operations company operations

24. HIGH RIGOR TRAINING • Lasts over a month • Experiential learning • Extensive language training • Often includes interactions with host country nationals

28. THANK YOU!