Global Sources of Human Resources
Host-Country Nationals Provide Attractive Management Option
As multinational expansion embraces fast-growing emerging markets like Brazil, India and China, senior executives must decide best sources for their overseas operations.
Multinational businesses can focus on four basic sources to fill their overseas positions. These include human resources from the home country, host country, third countries as well as outsourced operations.
Home-Country Nationals
Also known as expatriates or headquarters nationals, home-country nationals are citizens of the country where a multinational corporation is headquartered. Expatriates are typically used to get overseas operations underway. Candidates for international assignments must be adaptable, motivated and have the support of their spouse and children.
Multinationals screen for specific adaptability characteristics listed below.
- Work experience with other cultures
- Previous overseas travel
- Knowledge of foreign languages.
Candidates in the home country with recent immigration backgrounds or heritages will have a competitive advantage in sensing and accurately evaluating developments in the host countries from which they are native. Otherwise, pre-departure training through cultural seminars and workshops are necessary.
Home-country staff sent overseas means additional costs for the multinational. Topping the list are relocation expenses, housing assistance, education subsidies, taxation allowances as well as lump-sum incentive payments, special benefits such as extra vacations, special leaves, family airfare reimbursement and hardship pay.
Host-Country Nationals
Multinationals can also hire local managers from the foreign countries in which they do business. Hiring host-country nationals is seen as good public relations principally because the multinational is showing a commitment to providing jobs in the local economy. In addition, host-country nationals are highly familiar with the existing business environment and culture. Native citizens also know the intricacies and subtleties of the host-countries' verbal and non-verbal business languages.
Host-country nationals are less expensive than relocating home-country staff into a foreign nation. Local residents require none of the relocation costs and special incentive pay that host-country nationals demand to compensate for the rigours of adjusting to a new organizational environment in the host country.
Third-Country Nationals
Third-country nationals are citizens of countries other than the home or host countries. Third-country candidates have the required expertise and skills to perform what is usually a specialized job. Cultural sensitivity training and candidate adaptability remain keys to success in the host-country business environment, however.
Outsourcing or Subcontracting
To take advantage of lower human resource costs and to increase flexibility, multinational corporations can subcontract or outsource operations in an overseas country to a local provider.
IBM, Dell and Intel are examples of corporations that outsource their business operations in emerging markets.
With an increasingly competitive supply of outsourcing specialists in low-cost environments like Bangalore and India, the multinational saves on the incentive payments, special allowances and benefits otherwise paid to home-country, host-country or third-party employees.
