GLOBAL HUMAN RESOURCES

Global Staffing Pressures Candidate selections Assignment terms Relocation Immigration Culture and language Compensation Tax administration Handling spouse and dependent matters

Sources of Human Resources Host-Country Nationals Local managers who are hired by the MNC Used in middle- and lower-level management positions Nativization Requirement of host-country government that mandates employment of host-country nationals

Sources of Human Resources Third-Country Nationals (TCNs) Citizens of countries other than the one in which the MNC is headquartered or the one in which the managers are assigned to work by the MNC

Failure Rates of International Assignments International assignment failure can cost hundreds of thousands of euros Page 468 Shown are the maximum failures of a country or region for international assignments International assignments are the heart of international HR, and it’s therefore disconcerting to see how often such assignments fail. U.S. expatriates’ assignments that end early (the failure rate) range from 16% to 50%, and the direct costs of each such failure can reach hundreds of thousands of dollars or more. European and Japanese multinationals reported lower failure rates, with only about one-sixth of Japanese multinationals and 3% of European multinationals reporting more than a 10% expatriate recall rate.

Why International Assignments Fail Personality Person’s intentions Family pressures Lack of cultural skills Other non-work conditions like living and housing conditions, and health care Page 469 Discovering why such assignments fail is therefore an important research task, and experts have made considerable progress. Personality is one factor. For example, in a study of 143 expatriate employees, extroverted, agreeable, and emotionally stable individuals were less likely to want to leave early. And the person’s intentions are important: For example, people who want expatriate careers try harder to adjust to such a life. Non-work factors like family pressures usually loom large in expatriate failures: In one study, U.S. managers listed, in descending order of importance for leaving early: inability of spouse to adjust, managers’ inability to adjust, other family problems, managers’ personal or emotional immaturity, and inability to cope with larger overseas responsibility. Managers of European firms emphasized only the inability of the manager’s spouse to adjust as an explanation for the expatriate’s failed assignment. Other studies similarly emphasize dissatisfied spouses’ effects on the international assignment. One expert said: The selection process is fundamentally flawed. . . . Expatriate assignments rarely fail because the person cannot accommodate to the technical demands of the job. The expatriate selections are made by line managers based on technical competence. They fail because of family and personal issues and lack of cultural skills that haven’t been part of the process.

Improving Failure Rates/Solutions Provide realistic previews Have a careful screening process Improve orientation Provide good benefits Test employees fairly Shorten assignment length Page 469 Failure rates have dropped 9% over the last 10 years by stressing the items listed.

Selecting International Managers Test for traits that predict success in adapting to new environments Job knowledge and motivation Relational skills Flexibility and adaptability Extra-cultural openness Family situation Predictive trait breakdown

The New Workplace: Sending Women Abroad In the US, only 6% filled overseas positions compared to 49% domestic One survey found inaccurate stereotypes: Not as internationally mobile Might have a tougher time building teams

Culture Shock! Disorientation upon entering a new cultural environment Normal use of own cultural filter fails interpretation of perceptions communication of intentions All people experience culture shock... Past experience and training can shorten its length

Symptoms homesickness boredom withdrawal (reading is an obsession, focus on home nationals, avoid host nationals) excessive sleep need, compulsive eating and drinking irritability exaggerated cleanliness

Symptoms (cont.) marital stress, family tension, conflict stereotyping host nationals hostility towards host nationals loss of ability to work effectively fits of weeping psychosomatic illnesses

Repatriation of Expatriates Return to one’s home country from an overseas management assignment Reasons for returning Formally agreed-on tour of duty is over Expats want their children educated in the home country Unhappiness with foreign assignment Failure to perform well Readjustment problems Permanent position upon return constitutes a demotion Lack opportunity to use skills learned abroad upon return Salary and benefits may decrease upon return

Repatriation Problems 50% leave within 2 years Finding former colleagues promoted Reverse culture shock Page 480 Effectively repatriating returning employees is important. Particularly after companies spend hundreds of thousands of dollars helping the person develop international expertise, it’s disconcerting to know that perhaps 50% of returnees leave their companies within two years of coming home. expatriates often fear they’re “out of sight, out of mind” during an extended foreign stay, and such fears are often well founded. Many firms hurriedly assign returning expatriates to mediocre or makeshift jobs. Perhaps more exasperating is discovering that the firm has promoted the expatriate’s former colleagues while he or she was overseas. Even the expatriate’s family may undergo a sort of reverse culture shock, as they face the task of picking up old friendships and starting new schools, and giving up the perks of the over overseas job, like a company car and driver. Consider one employee’s plight. After a 5-year work assignment overseas that entailed much responsibility and a dynamic environment, Scott Fedje returned home to a cubicle, an intellectually non stimulating project, and a whole month to make a single decision. He resigned a few months later.