Sourcing Human Resources for global

markets – staffing, recruitment and

selection

John Njane
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Objectives
 Issues relating to the various approaches to staffing foreign operations.

 The various types of international assignments: short-term, extended

and longer-term; and nonstandard arrangements: commuter, rotator,
contractual, virtual and self-initiated assignments.

 The role of expatriates and non-expatriates in supporting international

business activities.

 The debate surrounding expatriate failure as a starting point.

 Selection criteria and procedures for international assignments.

 Gender in international HRM: Dual careers and the female expatriate.

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 DEFINING INTERNATIONAL HRM

HRM refers to those activities undertaken by an organization to

effectively utilize its human resources. These activities include:

1 Human resource planning.

2 Staffing (recruitment, selection, placement).

3 Performance management.

4 Training and development.

5 Compensation (remuneration) and benefits.

6 Industrial relations.

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The three categories of employees of an international firm:

1. Host-country nationals (HCNs); the host-country where a subsidiary may

be located;

2. The parent-country nationals (PCNs) – come form the parent-country

where the firm is headquartered

3. The third-country nationals (TCNs) – employees from other’ countries

that may be the source of labor, finance and other inputs
Example:
IBM employs British citizens in its British operations (HCNs). They might
send a US citizens (PCNs) to Asia-Pacific countries on assignment, and may
send some of its Singaporean employees on an assignment to its Chinese
operations (as TCNs)

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The advantages and disadvantages of using PCNs,
TCNs and HCNs
1. Parent country nationals
Advantages
• Organizational control and coordination is maintained and facilitated.
• Promising managers are given international experience.
• PCNs may be the best people for the job because of special skills and
experiences.
• There is assurance that the subsidiary will comply with MNE objectives,
policies, etc.
Disadvantages
• The promotional opportunities of HCNs are limited.
• Adaptation to host-country may take a long time.
• PCNs may impose an inappropriate HQ style.
• Compensation for PCNs and HCNs may differ.

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Third-country nationals (TCN)

Advantages
• Salary and benefit requirements may be lower than for
PCNs.
• TCNs may be better informed than PCNs about the host-
country environment.

Disadvantages
• Transfers must consider possible national animosities
• The host government may resent hiring of TCNs.
• TCNs may not want to return to their home country after
the assignment.

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 Host-country nationals (HCN)

Advantages
• Language and other barriers are eliminated.
• Hiring costs are reduced and no work permit is required.
• Continuity of management improves, since HCNs stay longer in their
positions.
• Government policy may dictate hiring of HCNs.
• Morale among HCNs may improve as they see future career potential.

Disadvantages
• Control and coordination of HQ may be impeded.
• HCNs have limited career opportunity outside the subsidiary.
• Hiring HCNs limits opportunities for PCNs to gain foreign experience.
• Hiring HCNs could encourage a federation of national rather than global
units

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 Determinants of staffing choices

Context specificities:
The local context of the headquarters as well as of the
subsidiary can be described by cultural and institutional
variables.
Cultural values may differ considerably between the
headquarters and the host country context e.g. the legal
environment, language, and the education system

Firm specific variables:

The most relevant variables are MNE structure and strategy,
international experience, corporate governance and
organizational culture which describe the MNE as a whole.

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 Local unit specificities

The staffing approach may vary with the establishment method of the
subsidiary; whether it is a greenfield investment, a merger, an acquisition
or a shared partnership.

Also the strategic role of a subsidiary, its strategic importance for the MNE
as a whole and the related questions of the need for control and the locus
of decision-making can influence staffing decisions

IHRM practices:
Selection, training and development, compensation, and career
management (including expatriation and repatriation) play an important

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Context specificities Company Specificities
Cultural context MNE structure and
Institutional context strategy
Staff availability International
Type of industry experience
Corporate governance
Organizational culture
Staffing choices
Ethnocentric
• Polycentric
• Regiocentric
• Geocentric

IHRM Practices
Local unit specificities
Selection
Establishment method
Training and
Strategic role and
development
importance
Compensation
Need for control
Career management
Locus of decision

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 Reasons for international assignments

1. Position filling:
Depending on the type of position and the level involved, an organization
will either employ someone locally or transfer a suitable candidate

2. Organizational development:
For more strategic objectives of the operation such as the need for
control; the transfer of knowledge, competence, procedures and practices
into various locations; and to exploit global market opportunities.
As a result, organizational capabilities enabling a firm to compete in global
markets might be developed.

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 3. Management development

Staff are often moved into other parts of the organization for training and
development purposes and to assist in the development of common
corporate values.

Headquarters staff may be transferred to subsidiary operations, or

subsidiary staff transferring into the parent operations, or to other
subsidiary operations.

Assignments may be for varying lengths of time and may involve project
work as well as a trainee position.

The perceived link between international experience and career

development can be a motivator for staff to agree to such transfers

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 Types of international assignments

Employees are transferred internationally for varying lengths of time depending

on the purpose of the transfer and the nature of the task to be performed.
MNEs tend to classify types according the length or duration of the assignment:
1. Short-term: up to three months. These are usually for troubleshooting,
project supervision, or a stopgap measure until a more permanent
arrangement can be found.

2. Extended: up to one year. These may involve similar activities as that for
short-term assignments.

3. Long-term: varies from one to five years, involving a clearly defined role in
the receiving operation (e.g. a senior management role in a subsidiary).
The long-term assignment has also been referred to as a traditional
expatriate assignment.

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 Non-standard assignments
1. Commuter assignments:
This is a special arrangements where the employee commutes from the
home country on a weekly or bi-weekly basis to the place of work in
another country (This does not include cross-border workers or daily
commuters). E.g an employee may live in Nairobi but works in Juba.

Reasons for these assignments include that a particular problem must be

solved and the assigned employee due to their experience and
qualifications is needed in two places at the same time or that the target
country is unstable.

Disadvantage:
There are real concerns about the viability of commuter arrangements over
an extended period of time due to the build up of stress resulting from
intensive travel commitments and the impact on personal relationships’

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 2. Rotational assignments

Employees commute from the home country to a place of work in another

country for a short, set period followed by a break in the home country.
The employee’s family usually remains in the home country.

This arrangement is commonly used in hardship locations

3. Contractual assignments:
Used in situations where employees with specific skills vital to an
international project are assigned for a limited duration of 6 to 12 months
e.g. in Research and Development (R&D).

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 4. Virtual assignments
This is where an employee does not relocate to a host location but
manages, from home-base, various international responsibilities for a part
of the organization in another country. Employees rely on communication
technologies such as telephone, email or video conferences while they
make one off visits to the host country.

The main reasons for using virtual assignments include shortage of

experienced staff prepared to accept longer term postings, the immobile
family, and cost containment.

Virtual assignments tend to be used for regional positions where the

person is mainly coordinating a number of national marketing activities
but is based at a regional center.

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Disadvantages that may affect successful work
outcomes of virtual assignment
Role conflict, dual allegiance, and identification issues between the
person in the home location and the virtual work group in the foreign
location.

It is not clear to whom the virtual assignee ‘belongs’ – the home location
where the person physically resides for most of the time, or to the foreign
unit.

How much time should be devoted to ‘virtual’ work responsibilities versus

the ‘real’ work.

Increases the potential for misunderstandings given that much of the work
is done through electronic media and where the geographical distance
rules out normal group interaction.

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 Self-initiated assignments

While standard expatriations are usually initiated by the organization,

self-initiated assignments are initiated by the individual.

Often these employees are highly interested in an international

challenge, have adequate language skills, an international mindset and
are quite entrepreneurial.

They comprise an important resource for their employers and can

increase international mobility potential in the organization.

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 The roles of an expatriate

1. Agents of direct control

The use of staff transfers can
be to ensure of compliance
through direct supervision.

This reflects an ethnocentric

approach to ensure compliance
by subsidiaries and enabling
strategic objectives for local
operations to be achieved.

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2. The expatriate as an agent of socialization
Expatriates assist in the transfer of corporate shared values and beliefs.

3. Expatriates as network builders

International assignments develop social capital by fostering
interpersonal linkages that can be used for informal control and
communication purposes.

However, the networks developed are person-dependent i.e People tend

to nurture and protect their networks, to be very selective about the way
they use their connections, and to evaluate the potential damage to key
individuals in their networks if the connection was to be used
inappropriately.

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4. Expatriates as boundary
spanners
Expatriates are used for gathering
information, that bridge internal and
external organizational contexts.

They collect host country information,

act as representatives of their firms in
the host country and can influence
agents e.g. attending a social function
at a foreign embassy can provide the
expatriate with an opportunity to
network, gather market intelligence
and promote the firm’s profile at a
high level.

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5. Transfer of competence and knowledge
International assignments assist in sharing knowledge and transferring
competences
Also encourages adoption of common work practices which may
strengthen elements of corporate culture and hence contribute to the
development of social capital within the MNE.

Staff encounter different viewpoints and perspectives that shape their

behavior and hence reinforce their feeling of belonging e.g employee may
appreciate how the company values its name and reputation and be able
to better understand the company’s code of conduct and other aspect.

In case expatriates are assigned positions due to a lack of appropriate

local staff, they take up responsibilities that help them development their
competencies for future promotions/

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 Non-expatriates - flexpatriates
International travel is an essential component of their work spending a
large proportion of their time visiting foreign markets, subsidiary units
and international projects.

Regional managers fall under this category – their jobs entail numerous
visits to international operations and may include visiting foreign
locations to deal with host-country government officials, alliance
partners, subcontracting firms, and foreign suppliers

Management of staff using these forms of arrangements falls to the

functional or line managers involved rather than the HR department

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What should HR consider when recruiting
flexipatriates?
Technical knowledge

Cross-cultural skills

Health issues such as

physical fitness
(adjustment to jetlag,
changes in diet, etc.)

Working and traveling time

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 Inpatriates
They are international assignees of HCNs or
TCNs to the parent country (the corporate
headquarters) of the MNE.

They are expected to share their local

contextual knowledge with HQ staff in
order to facilitate effective corporate
activities in these local markets.

They are also socialized in the HQ

corporate culture and learn firm-specific
routines and behaviors that enable them to
master future management tasks within
the organization.

Inpatriates act both as knowledge senders

and receivers.

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Key drivers for recruiting and transferring
inpatriate managers:
Desire to create a global core
competency and a cultural diversity of
strategic perspectives in the top
management team.

To increase the capability of

organizations to ‘think global and act
local’.

Desire to provide career opportunities

for high potential employees i.e. HCNs
and TCNs.

The emergence of developing markets

which often represent difficult
locations for expatriates in terms of
quality of life and cultural adjustment.

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 EXPATRIATE FAILURE AND SUCCESS

Expatriate failure is the premature return of an expatriate; a return

home before the period of assignment is completed.

An expatriate failure can be as a result of selection error, often

compounded by ineffective expatriate management policies.

It also include inability to effectively handle new responsibilities or to

adjust to the country of assignment leading to diminished performance
levels

However, if an expatriate is ineffective and poorly adjusted, but not

recalled, this will not be considered a failure i.e. if the expatriate
remains for the duration of the assignment

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 Solutions to the challenge of dual career couples
1. Inter-firm networking – The
multinational attempts to place the
accompanying spouse or partner in a
suitable job with another multinational
– sometimes in a reciprocal
arrangement or with a local supplier,
distributor, or joint venture partner

2. Job-hunting assistance The MNE

provides spouse/partner assistance
with the employment search in the
host country. This may be done
through employment agency fees,
career counseling, or simply work
permit assistance. Some may provide a
fact-finding trip to the host location
before the actual assignment.

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Solutions to the challenge of dual career couples
3. Intra-firm employment – This involves
sending the couple to the same foreign facility,
perhaps the same department.
However, it is not all multinationals (nor all
couples) are comfortable with the idea of
having a husband-and-wife team in the same
work location

There might be significant difficulties obtaining

work visas for such arrangements.

4. On-assignment career support – This may

consist of a lump-sum payment for education
expenses, professional association fees, seminar
attendance, language training to upgrade work-
related skills and employment agency fees.
Provided the spouse was employed before the
assignment.

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Thanks