Discuss about the International Human Resource Management for Recruitment and Selection?
As Globalization became integral to various countries around the world, one realized that it is the most important segment in the field of “Human Resource Management”. The role of “International Human Resource Management” is coming to the fore font as organizations continue to expand at a pace (Anon 2014). The advent of internet and e-commerce has enhanced the flow of goods and services, which in further boosted the pace at which internationalization had created an impact towards the role of IHR. Economic Globalization refers to the incorporation of “national economy” into “international economy” through effective trade of “Foreign Direct Investment”, “capital flows”, “migration” and “spread of technology”.
It is evident that Foreign Direct Investment plays an integral role in various ways, which includes technology “spillovers”, “human capital formation support”, “procurement of competitive business environment”, “contribution to international trade integration” and “improvement of enterprise development”. Foreign Direct Investment takes active participation in enhancing the social and environmental scenario of the targeted country in an effective manner (Bjarkman and Welch 2014). International Human Resource Management takes active participation in making the host country socially responsible for implementation of corporate policies. In the contemporary scenario, the role of International Human Resource Management is identified as one of the most critical aspects for successful operation of Foreign Direct Investment in the competitive market,
“Foreign Direct Investment” exhibits its excellence towards the targeted organization and reflects on the profit margin of the organization in a positive way. The process is akin to gold and for any nation to harvest the advantages of FDI, nations takes active participation in designing strategies which attracts the foreign investors in an effective manner. The rivalry is intense competition amongst the investors; however, the flow is more factual within the multinational companies in the developing country.
Advantages – The benefits of FDI contribute towards high economical expansion, which is the primary motivation for reducing poverty in the host country. However, the International Human Resource Managers recruit employees from both the host and targeted countries. It helps the business in maintaining a proper communication even after operating in many geographical locations (Blonigen and Piger 2014). Moreover, it assists the host company to gather adequate knowledge regarding cultural requirements of the targeted country. Most of the frequent flows have their root from the footsteps of enhanced economies to the developing countries. Most of the developed countries have accepted Foreign Direct Investment as a standpoint of attaining enhanced levels of “financial development”, “economic growth” and “employment”. In the contemporary era, developed countries probed for adapting “principles of free market economy” and enhanced their “investment policies” for maximising their benefits for the advent of FDI.
In accordance to the successive development of firms in the competitive era, the “HRM” of an organization plays a significant role in attracting the foreign investors, thus enhancing the organization’s profitability in a significant way (Hackett 2012). For a developing organization, the implosion of FDI not only acts as a catalyst for employment and economical acquisition, but also serves as the “integral mechanism” for presentation of “skills”, “technology”, “transfer” and “gain” in the managerial and operational purposes (Frank 2015). The Human Resource Managers makes their best effort to engage the employees in a diverse workforce. The incentives of FDI initiates market considerations, which includes the size and the host nation comparative advantages in the competitive market. Economical benefits play a vital in successful intervention of Foreign Direct Investment in the competitive market. The well known economical policies comprise of “income tax”, “sales tax” and “stamp tax exemptions”, an establishment of free zones where there is no constraints in trade linkage (Lin, Kim and Wu 2013). In accordance to the “financial incentives”, one includes “direct government loans” or “loan guarantees”, “export financing” or “debt/equity conversion possibilities”. These are exchange rate and economic growth, which is, dependable on various occurrences about the present scenario of the developing countries and that of the organization in the competitive market (Lucke and Eichler 2015). The HRM of the organization are the identical factors of success for any organization and in terms of FDI, it acts as a lubricant for organizational success
Foreign Direct Investment makes effective contribution towards “host economy” by “supplying capital”, “technology” and “resources”, which would otherwise not be in necessity. . The human resource managers always promote a diverse work force, which is one of the most determinant factors for successful interpretation of Foreign Direct Investment in the competitive market (Guo and Al Ariss 2015). A diverse workforce allows employees to interact freely with each other and exercise their creative thoughts and innovative talents in a suitable manner. Furthermore, diverse workforce is ideal for global expansion of the organization in the competitive market. Foreign direct investment improves the overall economic prosperity of nation, but has some dependency over social and political scenario.
Disadvantages – The economical inclination of FDI does not increase suddenly across countries, sectors and local communities (O’Neill 2014). It is rather difficult to measure and segregate the economical impact of Foreign Direct Investment. Where FDI has higher “non-marginal effects”, the “measurement” becomes even more tough. In this scenario, the identity of International Human Resource Management is critical for successful progression of Multinational Organizations in the competitive market (Shen 2015). International Human Resource Management takes active participation is designing and developing policies based on inputs all around the globe. Confusions related to expatriation are one of the major concerns of international Human Resource Managers. Expatriates usually comprise of corporate missionaries that are sent by a parent company across the globe for various functions like; to initiate expertise in areas of technical and managerial improvement, controlling operations, improvement of branches and development of regional managers.
In terms of International Human resource management and Foreign Direct Investment, the major issues underlying the expatriates are one of the primary areas of concern for the host country. As the impact of Globalization is enhancing at an alarming rate, International Human Resource Management is focusing more on expatriation and repatriation processes to enhance the profitability of the Foreign Direct Investment in the competitive market. Expatriation refers to a analytical tool which Internal Human Resource managers acquire and preserve “resident base of knowledge” about the complexions of internally operated decisions in Foreign Direct Investment (Kramar 2013). The enhancing internationalization of business through the establishment of Foreign Direct Investment has resulted in more employees working abroad as a part of their career plan. In contrast, the act of repatriation is a difficult case to handle for international Human Resource Management. Expatriate managers often gather a lot of experience and information from foreign assignments, by the time they return to the parent country. However, inappropriate and meager repatriation process would engage “underutilization of talents”, “loss of human capital” and discouragement for the talented management from receiving the assignments of the overseas.
In accordance to the fast movement of FDI in the competitive market, one of the major concerns is in the area of personal recruitment. Organizations getting involved in foreign direct investment are not well known in host country and therefore, needs to develop a good corporate image. It has huge competition with foreign countries as well as the organizations operating in the host country. The foreign firms had to invest heavily on personal development to reduce the qualification gaps and enhancing the vision of employee recruitment in the competitive market (Pudelko, Reiche and Carr 2014). The main challenge lies in recruiting not only quality candidates but retaining them in an organization for a longer duration. In case of FDI, the attrition rates of employees are relatively on the higher side because employees often struggle to adjust themselves with the diverse workforce of the organization. IHRM proposes several recruitment strategies for retaining the employees of the organization in a successful manner. The law and political scenario of the host country for FDI is a critical factor for success of the organization in the competitive market.
Several factors such as the consequences of the labor market, intense competition with the selected industry and national culture often influence the role of international human resource managers for initiating Foreign Direct Investment in the host nation. IHRM considers itself as an integral source of sustainable competitive advantage that contributes towards the success of the organization focusing on Foreign Direct Investment (Varmazyar and Nouri 2013). In fast developing countries, an organization does not rely much on internal recruitments. The international human resource managers need to make effective utilization of external labor market for selecting quality applicants (Resmini and Siedschlag 2013). In accordance to the limitations of literacy rate in the under developed countries, internal human resource managers often goes for alternatives through practice of personal marketing.
Personal development is a critical factor for initiating a unique and a valuable workforce for the organization. Every employee looks forward to develop their skills for moving ahead in their professional career. In the underdeveloped countries, the education system tends to be on the weaker side. The talented individuals are unable to perform due to lack of opportunities; therefore, there is an essentiality for proper employee training in order to reflect on the profitability of the organization. The employees of the organization need to adjust with the rules and regulations of the foreign firm. Furthermore, the International Human Resource Managers takes active participation in allowing the employees of the organization express their creative thoughts and innovative ideas in an effective manner (Zhai 2014). Training sessions provided by the internal human resource managers helps the employees of the organization to interact with the foreign colleagues. The application of personal development and training sessions allows the newly recruited employees to solve any issues based on racism, linguistic, culture, background and orientation.
Attrition rate or employee turnover in an organization is based on three factors such as calculative, alternative or contractual forces (DeVaro and Morita 2013). The internal Human resource managers provide high incentives to the employees of the organization influenced through the implementation of Foreign Direct Investment (Ziying 2014). Individual career plans often allows an employee to broaden their view and get them recruited in foreign firms. Career management plan often exhibits a unique approach for the firm approaching towards Foreign Direct Investment. However, foreign subsidiaries face double pressure for not only confronting to local environment and regulations in which they operate, but also to the expectations of the parent company to exhibit internal consistency. It is rather difficult for the internal human resource managers to create an effective work force for the organization in foreign soil. Selecting cheap labor is easy, but to maintain a strong labor relation is relatively difficult. The employees keep on escalating the issues until it is very much difficult to ignore. The international human resource managers must retain the talented employees for gaining supremacy in the competitive market. HR disconnect is one of the primary areas of concern, as the human resource managers often fail to address the issues faced by the employees across the globe.
On the contrary, it concludes that the internal human resource management has positive and negative impacts for the advancement of foreign direct investment in host nations. The above sections focused on the skills and intensities of foreign and local firms to underpin the latent properties for IHR enhancement in host nations. It also attempted to identify the correlations between intensity of international human resource management and the explanatory variables of export intensity, skills, wages and foreign ownership for attaining sustainability in the competitive market. The challenges faced by international human resource managers for maintain fluent labor relationship has affected the effectiveness of foreign direct investment in a negative way. Personal development of the employees tends to a challenging factor for organizations. However, Foreign Direct Investment refers to economic prosperity and alleviates poverty in host nations by opening further scopes of employment. Recruitment stands a major point of concern for the international managers, which may hinder the advancement of Foreign Direct Investment in Host nations. The advent of international human resource management still requires improvement in their execution and strategic decisions for influencing foreign direct investment in the host nations.
Hackett, R. 2012 Recruitment and Selection in Canada Nelson Education Limited
Kramar, R. 2013. Beyond strategic human resource management: is sustainable human resource management the next approach? The International Journal of Human Resource Management, 25(8), pp.1069-1089
Shen, J. 2015 Principles and Applications of Multilevel Modeling in Human Resource Management Research Human Resource Management
DeVaro, J. and Morita, H., 2013. Internal Promotion and External Recruitment: A Theoretical and Empirical Analysis Journal of Labor Economics, 31(2), pp.227-269
Varmazyar, M. and Nouri, B., 2013 A fuzzy AHP approach for employee recruitment 10.5267/j.dsl, pp.27-36
Anon, 2014 Threshold Effects in the Capital Account Liberalization and Foreign Direct Investment Relationship CBR, 13(09)
Bjarkman, I. and Welch, D., 2014. Framing the field of international human resource management research The International Journal of Human Resource Management, 26(2), pp.136-150
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Guo, C. and Al Ariss, A., 2015. Human resource management of international migrants: current theories and future research The International Journal of Human Resource Management, 26(10), pp.1287-1297
Lin, S., Kim, D. and Wu, Y., 2013 Foreign Direct Investment And Income Inequality: Human Capital Matters Journal of Regional Science, 53(5), pp.874-896
Lucke, N. and Eichler, S., 2015. Foreign direct investment: the role of institutional and cultural determinants Applied Economics, 48(11), pp.935-956
O’Neill, D., 2014. Playing Risk: Chinese Foreign Direct Investment in Cambodia CS, 36(2), p.173
Pudelko, M., Reiche, B. and Carr, C., 2014 Recent developments and emerging challenges in international human resource management The International Journal of Human Resource Management, 26(2), pp.127-135
Resmini, L. and Siedschlag, I., 2013. Is foreign direct investment to China crowding out the foreign direct investment to other countries?. China Economic Review, 25, pp.1-16
Zhai, W., 2014 Competing back for foreign direct investment Economic Modelling, 39, pp.146-150
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