ALASALA

College of Business Administration- Dammam

International Human Resources Management [HRM 445]
Sourcing HR for Global Markets Staffing, Recruitment, and Selection
BY:

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Contents
Introduction...........................................................................................................................................3
Types of International Employees.........................................................................................................4
Host-Country Nationals.....................................................................................................................5
Third-Country Nationals....................................................................................................................6
Transactional Project Teams..................................................................................................................6
Approaches to Staffing..........................................................................................................................7
What is ethnocentric staffing?...........................................................................................................8
What is polycentric staffing?.............................................................................................................8
What is regiocentric staffing?............................................................................................................8
What is geocentric staffing?..............................................................................................................9
The Process.......................................................................................................................................9
Advantages and Disadvantages...........................................................................................................10
Advantages and Disadvantages of PCNs.........................................................................................10
Advantages and Disadvantages of HCNs........................................................................................11
Advantages and Disadvantages of TCNs.........................................................................................11
Trends and Challenges in a Global HR Environment..........................................................................11
References...........................................................................................................................................12

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Introduction
International Employment Even at home, locating, selecting, and putting competent workers
is a challenge. However, in other nations, it gets more challenging. For instance, very few
Russians have resumes on hand to provide to potential employers with open openings until
quite recently in Russia. As a result, word-of-mouth is sometimes the only method of
recruitment. More advanced techniques, including organized interviews, testing, or work
examples, have just lately been employed sparingly. Because worldwide companies demand
younger, more educated personnel, more systematic selection is becoming necessary in
Russia and many other former Soviet-bloc nations. It might be difficult to choose the
combination of local workers, home-country workers, and even workers from third countries
that will best achieve organizational goals. Cost is a key aspect to take into account when
staffing an international organization. For a three-year job assignment, the expense of
establishing a management or professional in another nation might reach $1 million. When a
top manager is relocated outside of the US, the actual expenditures are frequently double that
pay. For instance, when housing costs, educational subsidies, and tax equalization payments
are taken into account, the expenditures may end up being much greater if the manager
travels to Japan. A manager or professional executive may also incur expenditures that are
equivalent to or greater than their yearly compensation if they leave an international
assignment early or insist on returning home. The "failure" rate for managers posted abroad
might reach 45%. The factors in Figure that are most likely to raise concerns for a worker
deployed abroad. According to the graph, only about two-thirds to three-fourths of workers
who are transferred to another nation are happy with how the top five support requirements
are being provided. Organizations are outsourcing a variety of tasks to satisfy these demands,
citing improvements in efficiency, cost effectiveness, and expertise. Several responders to a
study on the issue hypothesized that hiring foreign specialists to do certain HR duties would
become a long-term trend.

According to the Migration Policy Institute, 63% of all new legal immigrants dwell in only
six states and came from just 10 countries overall. Mexico, India, the Philippines, China, El
Salvador, the Dominican Republic, Vietnam, Colombia, Guatemala, and Russia were the top

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10 countries of origin. California, New York, Texas, Florida, New Jersey, and Illinois were
first through sixth in terms of where people lived.

H-1B employees may work seasonally as noted fashion models or in specialized occupations.
A specialty employment involves at least a bachelor's degree or its equivalent, as well as the
theoretical and practical application of a body of specialized knowledge. For a maximum of
six years, an H-1B immigrant may work for any petitioning U.S. business.

Types of International Employees

Three categories can be used to group international workers.

 An employee working in a unit or plant who is not a citizen of the nation where the
unit or plant is situated but is a citizen of the nation where the organization's
headquarters is located is known as an expatriate.
 A host-country national is a worker who is a national of the country in which the unit
or plant is situated, but the unit or plant is run by a company with its headquarters in a
different nation.
 A third-country national is a citizen of one country who resides in another, works
there, and is employed by a company with its headquarters there. These people each
provide different difficulties for HR management. Different tax laws and other
considerations are relevant since each person in a particular circumstance is a citizen
of a different nation. HR practitioners need to be familiar with the laws and traditions
of any nation. To guarantee compliance with various rules and standards, they must
develop suitable payroll and record-keeping practices, among other things.

Expatriates

(An expatriate, often known as an expat, is someone who lives temporarily or permanently in
a nation and culture that is different from their country of origin.) (A person who relocates
away from their nation of origin)

To make sure that international operations are successfully connected with the parent firms,
many MNEs employ expatriates. Typically, expatriates are also employed by organizations to
build their global competencies. As the company broadens its activities into additional
nations, experienced expatriates can offer a talent pool that can be accessed. Japanese
managers have been rotating across American operations at Japanese-owned companies with
US operations to increase their understanding of US business processes.

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Because not all people who want to work as expats undertake comparable missions, there are
many categories of expatriates that may be distinguished by their place of employment.

 Volunteer expatriates are those who desire to work overseas for a while for
professional or personal development reasons. These expatriates frequently volunteer
for shorter-term positions of less than a year so they may explore new cultures and
destinations.
 Traditional expatriates: These are managers and professionals sent to work for one to
three years in overseas operations. Then they return to their native country's parent
company in a rotating fashion.
 Expats with the goal of developing their careers abroad: These people are hired by
companies to expand their international management capabilities. To gain a deeper
grasp of global business, they may do one to three "tours" in other nations.
 Global emigrants: People who relocate from one nation to another fall under this
category. They frequently favor working abroad over in their native land.

Perhaps as a result of managing a more diversified workforce at home, American managers

are gaining a reputation for being considerably more adaptive and versatile. Their
management training is frequently excellent as well, coming from both official business
schools and internal training initiatives. 26 Whirlpool, GTE, Quaker Oats, and other
companies use retired American managers to fill temporary overseas posts that are difficult to
fill. They discover it to be more expedient and affordable than transferring a typical
expatriate, who would typically anticipate staying three years or longer.

Host-Country Nationals
Organizations are making adjustments to allow their non-Christian employees to take time off
to observe their holidays as the workplace has grown increasingly racially, culturally, and
religiously diverse. The majority of businesses provide employees with personal time off,
sometimes known as "floating holidays," usually two to four days a year that can be utilized
for any purpose.

It is crucial to employ residents of the host nation for a number of reasons. If the organization
wants to make it apparent that it is committing to the host nation and not merely setting up a
foreign operation, it must do this. Foreigners frequently lack a thorough understanding of the
host nation's politics, laws, and commercial practices. Additionally, it could be crucial to
access into the unofficial "power" network. In one Southeast Asian nation, Western

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businesses have discovered that having a family member of the president of that nation as a
consultant or manager expedites the firm's troubles. If not, the companies could be in breach
of the FCPA's prohibition on overseas corrupt practices. Utilizing residents of the host nation
also serves the purpose of creating jobs there. Because wages in many less developed nations
are much cheaper than in the United States, American businesses may save money by hiring
residents of such nations for a variety of positions.

It might be difficult to find the initial set of local personnel. For better or worse, the founding
group contributes to the development of the organization's culture. However, there is a lot of
room for significant mistakes. For instance, the employment regulations in several nations
vary greatly, which may make it challenging to fire an employee. Good potential workers
may be lost in nations where there is a scarcity of qualified people if not contacted properly.
Many businesses engage with local businesses to assist in recruiting in order to successfully
hire citizens of the host country.

Third-Country Nationals
Employing people from other countries highlights the fact that a genuinely global strategy is
being used. These people are frequently employed to manage duties throughout a whole
continent or area. One significant American electronics manufacturer, for instance, maintains
its European headquarters in Brussels, Belgium.

Only approximately 20% of the professionals and managers are from Belgium, despite the
fact that Belgians make up the majority of the clerical workers. Except for five American
expats, the most of the other people are from other Western European nations.

Third-country nationals are rare to work in a newly established international corporation

(MNE). These are frequently manned by qualified locals and foreigners. When a firm has
multiple overseas operations and intends to launch another, foreign nationals are frequently
the first to be employed. Transferring an employee from another foreign operation or another
expatriate from headquarters is a frequent option. In MNEs with North American
headquarters, foreign nationals are more prevalent than in other areas.

Transactional Project Teams

The quantity and diversity of multicultural or "transnational" teams have dramatically
increased. These teams, which may be temporary or largely permanent, are created to address
ongoing tasks or address specific issues. They frequently consist of headquarters

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representatives, residents of the host country, and citizens of third countries. They are helpful
as tools for leaders' growth in addition to being potentially profitable business units. To
simultaneously launch their photo CD in many European nations, Eastman Kodak assembled
an international team with a base in London. The team overcame cultural and regional
hurdles to solve challenging strategic problems.

NEW DELHI: According to a report by the research firm Ipsos, more than a quarter (28%) of
employees in India are open to accepting a full-time position overseas for two to three years
with at least a 10% income raise.

When asked if they would be willing to relocate within India, about three out of ten Indian
workers said they would be "very likely" to do so if they were given the chance to take a full-
time position in the near future, for a minimum of two years, with at least a 10% pay raise
and all moving expenses paid, while another 48% said they would be "somewhat likely" to
think about the possibility.

In 24 nations, 2 out of 10 workers stated they would "very likely" accept a full-time position
for two to three years in another country if the income increase was at least 10%. The
countries where people were most likely to declare they would go abroad were Mexico
(34%), Brazil (32%), Russia (31%), Turkey (31%) and India (28%).

As stated by Biswarup Banerjee, head of marketing communications at Ipsos in India,

"employees from developing economies like Mexico, Brazil, Russia, Turkey, and India are
prepared to migrate to developed countries." However, workers from industrialized nations
like Sweden (6%), the United States (9%), Australia (10%), Canada (10%), Belgium (11%),
Germany (11%) and Japan (11%) are less likely to transfer abroad.

According to Banerjee, "this demonstrates that workers in developed nations still have faith
that their country's economy will return robustly and give them enough decent employment
prospects to advance in the future."

Approaches to Staffing
An organization's methods and tactics for hiring employees internationally are described in
an international recruitment policy. This sample international recruitment policy template
will assist you in creating your own international hiring plan by describing the four global
staffing approaches: ethnocentric, polycentric, geocentric, and regiocentric.

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What is ethnocentric staffing?
We fill positions throughout the world with people from our parent nation because of the
ethnocentric approach to recruitment. For instance, if we wanted to hire an executive in
another nation, we could:

 Relocate a current employee who is a citizen of our parent nation and a permanent
resident.
 Hire a citizen of our parent nation who resides in or aspires to reside in the host
nation.

In order to make it simpler for our company's policies and processes to be transferred from
the parent nation to the new branch, we employ the ethnocentric technique while [creating a
new branch at a new country]. Generally speaking, fewer than [20%] of a foreign office
should be made up of expatriates from our parent nation in order to save overall recruiting
expenses and prevent losing touch with the local population.

What is polycentric staffing?

By using a polycentric recruitment strategy, we fill our roles in a host nation with locals. We
may, for instance, place an ad on regional employment sites or work out a deal with a
regional staffing firm.

When we use the expertise of locals to carry out our business, we employ the polycentric
method. For instance, we may employ a local expert who is familiar with the industry and can
organize our sales activities if we want to increase our clientele in a certain nation. If after
[four months] we still haven't discovered any eligible applicants, we'll use one of the other
strategies.

What is regiocentric staffing?

With the regiocentric strategy to hiring, we select candidates from the same area (i.e., a
collection of nations) to fill available positions. For instance, we may choose to move
personnel across Scandinavian nations. Therefore, if we wanted to move one of our
employees from Denmark, another host nation in the same area, we might hire someone in
Sweden (a host country).

When considering whether to apply the regiocentric strategy, consider any potential linguistic
or cultural hurdles. We use the regiocentric approach when [the expenses of relocating an
employee from a host nation are less than transferring them from the parent country.]

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What is geocentric staffing?
When hiring, we use a geocentric strategy, meaning we don't give a damn about where
applicants are from or where they reside. This implies:

 bringing on remote workers. When we need to recruit someone at a location where we

don't have offices, we choose this option. For instance, let's say we need a customer
service representative to assist our clients in a different time zone.
 relocating our staff. This covers both recruiting foreign talent into our home nation
and moving individuals to a new host nation. When a person must be physically
present at a certain place yet the ideal candidate resides elsewhere, we employ this
strategy.

We need to see recruiting from a global perspective in order to adopt the geocentric strategy.
The hiring team might, for instance, if a vacancy arises in a host nation or our parent nation:

 Before using local employment boards, post an ad on international job boards and
make sure to explicitly state where the position is located. Whenever feasible, post job
ads on websites that specialize on remote employment.
 Without looking at their present location, find prospects online.
 If you're looking for internal applicants who might want to move, search our
worldwide employee database.
 Inquire about potential prospects from recruiters that you met at foreign employment
fairs or events.
 Inquire for references from our current workers; they could know someone in their
network who would be a good fit for this role and be eager to move.

The Process
The following steps should be taken by hiring teams whenever a post becomes available:

 Choose the staffing strategy that best fits this situation. Determine if the regiocentric,
ethnocentric, or polycentric approach is most appropriate using this strategy. With
money, go through the budget to make sure you can implement the strategy you've
chosen and to see if there are any alternative options that would function just as well
but at a cheaper cost. The [geocentric method] ought to be used if there is no
compelling reason to utilize any of them.

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  Find the recruitment strategies that are effective for this strategy. For instance, if you
choose the polycentric method, take into account regional employment portals and
regional recruiters in the host nation.
 Budget your money. Examine your budget to ensure that you can plan recruitment
initiatives. For instance, if you choose to use an ethnocentric strategy, you will need
to account for your new hire's relocation expenses. Additionally, you could decide
that you need to meet applicants from the host nation in person, so be mindful of
travel costs. Determine the resources that are accessible by working with
[finance/HR].
 Consider the candidates. We assess every applicant the same manner when it comes to
the resume and phone screening processes. For applicants who are remote, you might
also do video interviews. Each position will require a unique skill set, but to ensure
that our employees can get along, search for people who:
o Possess self-motivation and independence (especially if their manager is
remote).
o Can effectively communicate despite linguistic and cultural differences.
o Adopt a global perspective.
o Possess a solid understanding of technology.
 In addition, depending on the strategy you choose, be sure to talk about
a candidate's legal right to work in the nation where the available post
is. If so, talk about the immigration process.
 Close the hiring process and go over papers. Ask HR how to proceed with any legal
processes including visas, immigration laws, or tax laws once a candidate accepts a
job offer. Up until everything is settled, work closely with the new recruit.

Advantages and Disadvantages

Advantages and Disadvantages of PCNs
 Advantages
o Familiarity with the objectives, rules, and procedures of the parent
organization.
o Management and technical proficiency.
o Effective coordination and communication with employees from the parent
country.

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  Disadvantages
o Having trouble adjusting to the social, political, cultural, and legal
environments as well as the foreign language.
o Excessive costs associated with hiring and training foreign managers.
o Issues with family adjustment.

Advantages and Disadvantages of HCNs

 Advantages
o Familiarity with the host country's social, political, legal, and business
environments.
o Less expensive than PCNs and TCNs in terms of employing employees.
o Gives locals the chance to progress and be promoted, which strengthens their
passion and drive.
o Successfully meets the expectations of the host nation.
 Disadvantages
o Challenges in effectively controlling the subsidiary's operations.
o Having communication issues with the main firm.
o Internationals from the home country have little possibilities to travel and
interact with other cultures.

Advantages and Disadvantages of TCNs

 Advantages
o Perhaps the best way to balance obtaining the managerial and technical skills
necessary with adjusting to a different cultural environment.
o TCNs are often experienced international business managers that have a long
career.
o Typically, TCNs cost cheaper to maintain than PCNs.
o TCNs could have more knowledge of their host environment than PCNs do.
 Disadvantages
o Sensitivity of the host nation to particular foreign nations.
o Local nationals struggle to advance in their own ranks and take on responsible
responsibilities.

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Trends and Challenges in a Global HR Environment
Regardless of the staffing strategy the MNC chooses, HR leaders in the twenty-first century
will have a number of challenges to overcome in order to guarantee the availability of
talented workers. MNCs are faced with the problem of addressing the lack of global skills
and hurdles to cross-cultural communication as the global environment continues to change.
By internationalizing its HR processes and functions as well as their workforce attitude, the
successful MNC will be able to adapt to the changing environment. In order to find and
execute new methods of accomplishing tasks, HR professionals will need to embrace a new
way of thinking. These efforts must also be in line with organizational and commercial
objectives.

In terms of compensation and performance systems, MNC HR systems must be in line with
global business imperatives. In order to achieve efficiency and uniformity of procedure as the
number of foreign transfers rises, MNCs must attempt to adopt broad rules and compensation
packages rather than negotiating them on a case-by-case basis. Additionally, both local and
global succession planning systems must be in place. Many MNCs now don't run an efficient
expatriate pipeline, either by failing to deploy the most useful people to host countries or by
failing to repatriate them successfully. In order to better support international business and
relocation decisions, the trend toward more dependence on integrated systems should help to
improve access across borders and regions.

Standardizing and reviewing current expatriate remuneration packages to incorporate soft

benefits will be another opportunity for MNCs to develop a global workforce. People have
frequently been reluctant to accept work overseas in the past since the rewards are
exclusively financial. In the past, there haven't been protocols in place to help people and
their families return home easily after finishing an abroad assignment. Many employees are
unable to access their home HR system, which prevents them from learning about potentially
alluring employment prospects there. By simply establishing alignment and communication
between the domestic and foreign HR departments, this may be considerably enhanced.

References

Bika, N. (2022, July 25). International Recruitment Policy. Recruiting Resources: How to
Recruit and Hire Better. Retrieved November 5, 2022, from
https://resources.workable.com/international-recruitment-policy

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Global staffing practices. theintactone. (2020, February 19). Retrieved November 5, 2022,
from https://theintactone.com/2020/01/17/global-staffing-practices/#:~:text=There
%20are%20four%20primary%20approaches,%2C%20polycentric%2C%20and
%20regiocentric%20approaches.

International Staffing. Whatishumanresource.com. (n.d.). Retrieved November 5, 2022, from

https://www.whatishumanresource.com/international-staffing

Lin, J. (2018, August 21). Week 5 sourcing HR for Global Markets: Staffing, Recruitment &
Selection. Academia.edu. Retrieved November 5, 2022, from
https://www.academia.edu/37272644/Week_5_Sourcing_HR_for_Global_Markets_Sta
ffing_Recruitment_and_Selection

Open textbook library. Open Textbook Library. (n.d.). Retrieved November 5, 2022, from
https://open.umn.edu/opentextbooks/

Velocityglobal. (2022, August 30). International staffing problems and solutions. Velocity
Global. Retrieved November 5, 2022, from
https://velocityglobal.com/blog/international-staffing-problems-and-solutions/
#:~:text=International%20staffing%20is%20a%20necessary,understands%20the
%20market%20and%20culture.

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