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Sourcing HR for Global Markets: Staffing, Recruitment

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Chapter 5 Sourcing HR for Global Markets: Staffing, Recruitment & Selection IHRM, Dr. N. Yang * – PowerPoint PPT presentation

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Title: Sourcing HR for Global Markets: Staffing, Recruitment


1
Chapter 5
  • Sourcing HR for Global Markets Staffing,
    Recruitment Selection

2
Chapter Focus and Aim
  • The previous three chapters have addressed the
    global, cultural, and organizational contexts for
    the increasing complexity and strategic role of
    HRM.
  • We now focus on the managing people aspect.
  • The aim is to establish the role of HRM in
    sustaining international business operations and
    growth.

3
Chapter Objectives
  • Issues related to various approaches to staffing
    foreign operations
  • Reasons for using international assignments
  • Various types of international assignments
  • Expatriate, inpatriate and non-expatriate roles
    in supporting international business activities
  • Recruitment and selection of international
    managers
  • Debates and trends concerning expatriate failure
    and success
  • Selection criteria
  • Gender and dual career issues

4
Approaches to Staffing
  • Ethnocentric
  • PCNs are favored
  • Polycentric
  • HCNs manage subsidiaries
  • Geocentric
  • Ability is more important than nationality
  • Regiocentric
  • Similar to geocentric, but limited to a given
    region

5
Ethnocentric
  • Strategic decisions are made at headquarters
  • Limited subsidiary autonomy
  • Key positions in domestic and foreign operations
    are held by headquarters personnel
  • PCNs manage subsidiaries.

6
Polycentric
  • Each subsidiary is a distinct national entity
    with some decision-making autonomy
  • HCNs manage subsidiaries who are seldom promoted
    to HQ positions
  • PCNs rarely transferred to subsidiary positions.

7
Regiocentric
  • Reflects a regional strategy and structure
  • Regional autonomy in decision making
  • Staff move within the designated region, rather
    than globally
  • Staff transfers between regions are rare.

8
Geocentric
  • A global approach - worldwide integration
  • View that each part of the organization makes a
    unique contribution
  • Nationality is ignored in favor of ability
  • Best person for the job
  • Color of passport does not matter when it comes
    to rewards, promotion and development.

9
Approaches to Staffing
  • General staffing policy on key positions at
    headquarters and subsidiaries
  • Ethnocentric
  • Polycentric
  • Geocentric
  • Regiocentric
  • Constraints placed by host government
  • Staff availability

10
Table 5.1a
Advantages and Disadvantages of Using PCNs
11
Table 5.1b
Advantages and Disadvantages of Using TCNs
12
Table 5.1c
Advantages and Disadvantages of Using HCNs
13
Figure 5.1
Determinants of Staffing Choices
14
Staffing a New International Venture
  • An Australian wine company has successful and
    growing exports in three markets U.K., U.S., and
    Scandinavia
  • Gained a global recognition for quality wine
  • Assisted by technological improvements, and
    aggressive marketing
  • Now the Board wants the company to ride the
    Australian wave and gain more market shares in
    the European continent.
  • The company recently made an acquisition in
    France, its first time FDI
  • Which is a middle-level player in the Fench home
    market
  • With efficient operation in the French context
  • Modest profit margin
  • Limited sales to EU neighboring countries
  • The Board believes there is room for improvement
    particularly in production techniques and
    marketing

15
How would you staff the new venture?
  • Staffing approaches to consider?
  • Key positions to be filled
  • Managing Director, head of the new venture
  • Production Manager
  • Marketing Manager
  • Chief Wine Technologist
  • HR Manager
  • Chief Finance Manager
  • Factors to consider
  • Strategic goal
  • Mode of entry
  • Degree of control
  • French culture and labor law
  • EU works council
  • Competence transfer
  • Brands, the Australian wave

16
Reasons for International Assignments
  • Position filling, e.g.
  • Skills gap, launch of new endeavor, technology
    transfer
  • Management development
  • Training and development, assisting in developing
    common corporate values
  • Organizational development
  • Need for control, transfer of knowledge,
    competence, procedures and practices
  • Exploit global market opportunities

17
Types of International Assignments
  • Short term up to 3 months, e.g.
  • Troubleshooting
  • Project supervision
  • A stopgap until a permanent arrangement is found
  • Extended up to 1 year
  • May involve similar activities as short-term
    assignments
  • Long term
  • Varies from 1 to 5 years
  • The traditional expatriate assignment

18
Non-standard Assignments
  • Commuter assignments
  • Rotational assignments
  • Contractual assignments
  • Virtual assignments

Some of these arrangements assist in overcoming
the high cost of international assignments but
are not always effective substitutes for the
traditional expatriate assignment.
19
Differences between Traditional and Short-term
Assignments
Table 5.2
20
The Roles of an Expatriate
Figure 5.2
21
Factors that influence effectiveness of
international assignments
  • An environment of openness and support for
    cross-fertilization of ideas and implementation
    of best practice
  • Knowledge and information to travel dyadically
    between the expatriate, host country, and parent
    country
  • Consideration for personal networks
  • Some knowledge transfer requires longer
    assignments (e.g., where there is much tacitness)
  • Expatriates ability and motivation to act as an
    agent of knowledge transfer
  • Abilities, motivation and relationship of local
    employees

22
The Role of Non-expatriates
  • People who travel internationally yet are not
    considered expatriates as they do not relocate to
    another country
  • Frequent fliers, road warriors, globetrotters,
    and flexpatriates
  • Much of international business involves visits to
    foreign locations, e.g.
  • Sales staff attending trade fairs
  • Periodic visits to foreign operations,
    subcontractors, etc.
  • Dealing with foreign agents, clients,
    distributors, suppliers, subcontractors, alliance
    partners, etc.
  • Meeting with host-country government officials

23
Stress Factors with International Business
Travelers
  • Home and family issues
  • Work arrangements
  • Travel logistics
  • Health concerns
  • Host culture issues

24
The Role of Inpatriates
  • As both knowledge senders and receivers
  • Share their local contextual knowledge with the
    HQ staff
  • Socialize in the HQ corporate culture and learn
    firm-specific routines and behaviors
  • Increasing the capabilities of organizations to
    think global and act local

25
Drivers for Recruiting and Transferring
Inpatriate Managers
  • Desire to create global core competency and a
    cultural diversity of strategic perspectives in
    the top management team
  • Desire to provide career opportunities in host
    countries, i.e. for HCNs and TCNs
  • The emergence of developing markets which often
    are difficult locations for expatriates
  • Quality of life adjustment
  • Cultural adjustment

26
Recruitment Selection of International Managers
  • Recruitment
  • Searching for and obtaining potential job
    candidates in sufficient numbers and quality so
    that the organization can select the most
    appropriate people to fit its job needs
  • Selection
  • The process of gathering information for the
    purpose of evaluating and deciding who should be
    employed in particular jobs

27
International vs. Domestic Recruitment and
Selection
  • Predispositions of the firm
  • The constraints imposed by host-country
    governments
  • Smaller number of external recruits
  • Preference for internal recruitment
  • To reduce selection risk
  • To secure present past human capital
    investments
  • Headhunting

28
Expatriate Failure and Success
  • Definition Premature return of an expatriate
  • Under-performance during an international
    assignment
  • Retention problem upon completion

29
Expatriate Failure Rates
Table 5.3
30
Reason for Expatriate Failure
  • US Firms
  • Inability of spouse to adjust
  • Managers inability to adjust
  • Other family problems
  • Managers personal or emotional immaturity
  • Inability to cope with larger overseas
    responsibilities
  • Japanese Firms
  • Inability to cope with larger overseas
    responsibilities
  • Difficulties with the new environment
  • Personal or emotional problems
  • Lack of technical competence
  • Inability of spouse to adjust

European Multinationals Inability of spouse to
adjust.
31
Expatriate Destinations
  • Top Emerging Destinations
  • Locations with Highest Failure Rates
  • China
  • Singapore
  • United States
  • India
  • U.A. Emirates
  • Canada
  • China
  • India
  • United States
  • Saudi Arabia
  • United Kingdom
  • Russia

Source Global Relocation Trends Survey Report,
Brookfield 2010.
32
Expatriate Turnover
  • Premature return 7
  • Spouse/partner dissatisfaction 65
  • Other family concerns 47
  • Poor candidate selection 39
  • Expatriate attrition average annual 13
  • During assignment 17
  • Within 1 yr. of return 38
  • Between 1-2 yrs. of return 23
  • Over 2 yrs. 22

Source Global Relocation Trends Survey Report,
Brookfield 2010.
33
Direct Costs of Expatriate Failure
  • Direct costs
  • Airfares
  • Associated relocation expenses
  • Salary and benefits
  • Training and development
  • Averaged 250,000 per early return
  • Costs vary according to
  • Level of position
  • Country of destination
  • Exchange rates
  • Whether a failed manager is replaced by another
    expatriate

34
Indirect Cost of Expatriate Failure
  • Damaged relationships with key stakeholders in
    the foreign location
  • Negative effects on local staff
  • Poor labor relations
  • Loss of market share
  • Negative effects on expatriate concerned
  • Family relationships may be affected

35
ROI Indicators for Calculating Intl Assignments
Figure 4-3
36
Steps to Calculate Expatriate ROI
  1. Identify financial and non-financial costs and
    benefits.
  2. Link the costs and benefits to the purpose of the
    long-term assignment.
  3. Identify the appropriate antecedents from a
    systems perspective.
  4. Conduct the calculation at an appropriate time
    within the context of the assignments purpose.

37
Selection Criteria
  • A two-way process
  • Concerning both individual and situational factors

38
Figure 5.3
Factors in Expatriate Selection
39
The U-Curved Phases of Cultural Adjustment
Figure 5-2
40
The Phases of Adjustment
  • The U-Curve is not normative
  • The time period involved varies between
    individuals
  • The U-Curve does not explain how and why people
    move through the various phases
  • It may be more cyclical than a U-Curve
  • Needs to consider repatriation

41
Overview of Important Adjustment Variables
Table 5.4
42
Current Expatriate Profile
Category To/From HQC (56) To/From non-HQC (44) To/From HQC (56) To/From non-HQC (44)
Gender Age (Yrs) Marital status Accompanied by Male (83) 40-49 (40) 50-59 (16) Married (70) MM (63), MF (37) Spouse/Partner (79) Female (17) 20-29 (10) 30-39 (32) Single (26) Partner (7) Children (47)
Dual career couples Employment status Duration Intra-regional transfers Primary reason Prior international experience Before assignment 50 New hires (8) Long-term (64) Extended (32) EMEA (49) Fill skill gaps (43) 10 During assignment (9) From within (92) Short-term (21) On schedule (59) Americas (26) Asia-Pacific (25) MGR (22) Tech (21)
Source Global Relocation Trends Survey Report,
Brookfield 2010.
43
Solutions to the Challenges of Dual-career Couples
  • Alternative assignment arrangements
  • Short-term, commuter, others (e.g. unaccompanied,
    business travel, virtual assignments)
  • Family-friendly policies
  • Inter-company networking
  • Job-hunting assistance
  • Intra-company employment
  • On-assignment career support
  • Language training, educational assistance
  • Employer-sponsored work permits
  • Career planning assistance

44
Strategies for Breaking the Expatriate Glass
Ceiling
Table 5.6
45
Summary
  • Through this chapter we have looked at various
    approaches to international staffing with context
    specifics
  • Primary reasons for using international
    assignments
  • Traditional and alternative types of
    international assignments
  • Various roles of expatriates, inpatriates, and
    non-expatriates
  • Expatriate failure, success, and implications
  • Issues concerning gender and dual-career couples
    in managing international assignments

46
Vocabulary
  • ethnocentric, polycentric, geocentric,
    regiocentric
  • types of assignments traditional short-term,
    extended, long-term nontraditional commuter,
    rotational, contractual, virtual, self-initiated
  • Expatriate roles language node, agent of direct
    control, agent of socializing, network builder,
    transferor of competence knowledge, boundary
    spanner
  • best practice
  • tacitness
  • ethnorelativism
  • inpatriates,
  • external recruits, internal recruitment,
    headhunting
  • expatriate failure, EFRs,
  • direct indirect costs
  • selection criteria, soft skills, intercultural
    competence, cultural intelligence, common
    corporate language
  • honeymoon tourist phase
  • coffee-machine system

47
Discussion Questions
  1. Outline the main characteristics of the four
    approaches to international staffing.
  2. Which factors determine the choice of a staffing
    approach? Would a MNE choose the same staffing
    approach worldwide? Place your arguments in the
    context of the model outlining determinants of
    staffing choices and pros and cons of using PCNs,
    TCNs, and HCNs.
  3. What are the reasons for using international
    assignments?
  4. What is the role of inpatriates? Do inpatriates
    guarantee a geocentric staffing policy?
  5. Why is it important to measure return on
    investment of international assignments? Which
    indicators can be used?
  6. What are the most important factors involved in
    the selection decision?
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