International Human Resource Management Aspects

Introduction

Human resource management is a pool of activities that aim at creating an excellent work environment between employees and supervisors. The result should have a positive impact on shareholders, suppliers, the media, and customers among other stakeholders interested in an enterprise, and organization, a social institution, or a country. Working overseas entails many things, and its human resource practices differ depending on whether the process involves outsourcing or offshoring (Ivancevich 36).

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During outsourcing, a company acquires human resources from another country or from a firm that trains and selects suitable candidates for the advertised job. Outsourcing companies have the responsibility of merging the capabilities of a prospective employee with the academic qualifications in relation to the attributes that a company requires through the adverts. During offshoring, companies invest in other countries, and this is common for multinationals (MNCs). Irrespective of the shift, matters of overseas workforce still arise because an employee moves into a foreign country in order to offer his or her skills and academic competencies to a target organization that seeks similar services.

Like other human resource procedures, companies engage in recruitment, retention, and motivational practices in order to create mutually beneficial relationships between workers and their supervisors (Banfield and Kay 9). Other issues arising from the transition include remuneration, the costs of acquiring foreign human resources, and union representation. Besides discussing the issues, the paper also highlights labor laws and their relationship to working overseas.

International human resource management

When dealing with issues of human resources overseas, it is impossible to avoid discussing International Human Resource Management (IHRM). IHRM principles operate universally while cutting across borders making the concept very important for enterprises in the 21st century. In a globalized world, people have to share resources, cultures, ideas, legal, and ethical responsibilities, and this explains why it is possible for a person who lived all his or her life in India to work comfortably in the US of a country in the Persian Gulf. People who think of working overseas have to understand the policies, strategies, and principles of operation in the target country because the company situated in the target country has to follow similar policies. Working overseas requires principles of IHRM because it involves operation beyond regional and territorial boundaries and cultural integration is inevitable.

The organization and the prospective employee have different roles to play when dealing with matters of working overseas. The company has to take into consideration geographical and cultural barriers that would interfere with business procedures. The employee should consider payment and the value of moving to a foreign country over the cost of life in the country of origin (Plessis and Beaver 127). Normally, income and good living conditions act as motivating factors to working abroad. Both the employee and the organization have wants and needs that they need to fulfill explaining why their association is important. In order for a company to outsource, it must have genuine reasons that the process will add value to the firm during the period in which it will hire the applicant.

Managing HR Overseas

Cultural concerns

International human resource management appreciates the fact that humans will always seek an opportunity in which other people will appreciate their input at work. People need the assurance that a multinational will treat them with the same level of appreciation they received at the domestic level. This means that human resource practices do not change when organizations become big. Instead, there is a high level of austerity from the human resource oversight authorities because conglomerates are less likely to put much emphasis on human resource management (Lawler and Hundley 21).

This emanates from the financial stability they enjoy coupled with the strong political backing they receive in the competitive industry. Globalization makes international human resource management recipe for any entity that seeks to succeed in any part of the world. There is a clear difference between working at home (locally) and working overseas. In most cases, working overseas is an attempt to seek adventure, explore cultures, and earn a decent living in comparison to the country of origin (Smith 41). However, a reason that would make anyone want to remain in his or her country of origin is the ability to enjoy a culture he or she learned to embrace since childhood. In essence, the issue of culture shock remains unheard of when people reject overseas jobs.

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Labor Laws and Dealing with Conflicts

Thirdly, overseas jobs create conflicts between the locals and the outsourced employees who take up most of the local jobs. Working overseas therefore remains a very complex issue that most human resource managers must be capable of handling with care. Management of human resources overseas might be complex when a company lacks the preparedness to deal with employees with varying expectations.

When matters of religion arise at work, it becomes very emotive, but the EEOC and ERISA regulations require companies to operate in a non-discriminatory manner irrespective of the rising concern (Storey 142). In MNCs, the human resource managers have to displays high levels of expertise in order to deal with conflicts, remunerations, and communication within the industry. All business ventures face competition, and it would be illogical to ignore effective human resource practices that would give an organization an advantage over rivals. Naturally, it is very difficult to follow the IHRM principles, but taking the move places a company at a competitive edge (Stone 18).

Economic Issues

IHRM has long-term impacts on organizations because the world watches and listens to the environmental sentiments concerning the operations of an entity. For instance, when the employees complain, there is definitely a problem with the human resource structure of an overseas company. In the recent past, there were concerns that traditional SEC regulations do not allow companies to own over 40% of shares in the U.S (Regis 92).

Microsoft owns about 95% of shares in the U.S. while it continues to acquire other companies. Its merge with Nokia in the recent past transformed into an acquisition of the company’s Nokia phones phasing off Nokia from the Finnish market. Today, only Nokia Lumia remains a relevant innovation of the company meaning that IHRM principles keep changing when companies acquire financial, technological, and political power within the environment of operation.

Most engineers in Microsoft are from India and the west. Most innovators are Chinese, and they work at the firm because they find comfort in the HR practices in the overseas company. First, Microsoft is a good wage payer, it has a higher minimum wage in comparison to other electronic firms including Apple Inc., and the company mostly applies democratic leadership styles. This means that human resource recruitment and retention overseas largely depends on the HR practices of the firm that compliment both the employee and the supervisor.

Overseas Labor Force Deliberations

The Expatriates

The “American Dream” is a historical reason why many people move overseas to look for jobs and to further their education. The transition mostly occurs between third world countries to the first world. Most employees seek a decent salary and good working conditions with an assurance of retention. While working overseas, employees have to know their terms of engagement to the firm. Full time and part time employees operate under different terms, and this influences the way they earn. Fixed term employees, sales personnel, and freelance employees also earn differently depending on the amount of contribution they make towards the company.

Companies make deliberations on employment of people from different countries because the expected employees will operate under new regulations (Ivancevich 173). When a person goes to work in an overseas company, he or she becomes part of the popular culture of the company while forming part of the company records. Employees in this case also covers expatriates who take home huge checks because of the indisputably high impact they have in an organization in most cases, they refer to the outsourced highly knowledgeable, and trained employees who will not allow an organization to part with any additional costs of training and orientation (Tsui and Lai 65).

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The generational gap between employees influencing the impact they have in an organization. The veterans and the generation X ordinarily play different roles in firms, and a company would rather employ a generation that best compliments its activities. In human resource management, the company and the employee determine the response a customer would have towards the business processes. For an organization to recruit an overseas employee there must be a gap in knowledge that requires an expert from abroad.

The gap could be a low salary, a high salary that complements competence, or the work conditions. In most cases, overseas work suits people who are in urgent need of work irrespective of the employment terms. While this places the company at an advantage of hiring a low waged human resource, the employees face the risk of living worse off than their previous jobs. In essence, the employee should carry out a thorough investigation of the employer before making irrational decisions by taking up the overseas job (Beechler and Sully 211).

Suppliers (freelance/contractors)

When people move overseas to provide contracting services to an organization, they also contribute effectively towards the human resource management. Contractor or people working overseas on freelance engagement terms also require the attention and recognition given to their counterparts who operate on fixed basis. The human resource department should be capable of providing privileges such as social security, hourly wages, increment of salary depending on work done, and other benefits that would place them at an advantage over the fixed term employees (Armstrong and Armstrong 22).

Freelance is about risk taking and it would be unfair to place contracted employees at the same level as fixed term employees. Concerning social security, few countries apply the same in human resource. President Obama ensured that during his reign, the people of America would enjoy the social security funds after they retire. The terms do not cover freelance employees both nationals and non-nationals of the U.S. meaning that freelance workers only get the advantage of not paying taxes, but they cannot avoid other life expenses.

The role of Human resource managers when dealing with overseas workers

Selection

Strata Manufacturing PSJ is a company dealing in aero structures in Abu Dhabi. It acquired the Etihad airways, Mubadala and merged with Boeing to provide the best aero parts to people in the Middle East. Since most UAE nationals do not understand English, the company like several other firms hires expatriates who understand English and have the requisite potential to provide the company with a competitive edge. The firm hires experts, and only caters for training programs of UAE nationals. As such, hiring of overseas employees rarely deals with people who will require training. Most applications look for people with testimonials to prove that they can manage the new challenge in their lives (Armstrong 57).

Training

Since the overseas companies do not offer training, the expatriates have to learn the job skills and details from the outsourcing firm. In addition, the only element of training that the human resource will use to crate familiarization is showing the expatriate the work environment in an orientation or repatriation exercise (Plessis and Beaver 178). Inability to offer general training about the work costs the company less overhead costs while placing the expatriate at a difficult position of proving his or her worth for the employment position.

Talent and performance management

Performance management is possible for the expatriates since the contractors perfectly understand that they can only renew the contracts when they perform well. As such, the human resource department acts as an oversight for the expatriates, but the freelancers provide oversight for themselves. The performance of an employee including his or her talent should generate income to the firm in order to account for the resources used in hiring (Lawler and Hundley 21). There are firms that provide accommodation at subsidized costs while providing healthcare cover to expatriates. Without performance management and talent management through appraisals, the companies will never recover the finances.

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Remuneration and motivation

Payment forms the basis of looking for an overseas job. A good salary provides a good living standard, and the payment terms usually discussed before the hiring process can change depending on the terms of the contract. Common forms of remuneration include compensation when one faces an injury while at work, pay increase in case of promotion, transport allowance, and healthcare cover including house allowance among others (Ivancevich 218).

Remuneration depends on the rank of the expatriate and the reason for leaving the pats job. If an employee leaves a job that pays well for an overseas job, then the hiring company should offer a better package as opposed to the initial company. Concerning motivation, both monetary and non-monetary strategies propel growth in an organization. Occasionally, the overseas workers need holidays with a constant salary to visit their families. They also need to have a platform of career growth through seniority procedures, and an opportunity for team building (Regis 93).

Conclusion

In summary, overseas working has both merits and demerits, but since there is a constant flow of human resources to foreign countries, there is a high possibility that employees enjoy the advantages that accompany the same trend. Labor costs, cultural barriers, international labor policies, remuneration among other factors contribute towards the growing number of expatriates taking interest in overseas jobs. In essence, the advantages of overseas working seem to be many in comparison to the disadvantages connected to the same activity, and this means that the human resource departments dealing with the shift should prepare for major changes in the future. There are possibilities that countries will increase strictness on international companies that fail to honor the policies of the international labor laws.

Works Cited

Armstrong, Michael, and Michael Armstrong. Armstrong’s Handbook of Human Resource Management Practice. London: Kogan Page, 2012. Print.

Armstrong, Michael. Armstrong’s Essential Human Resource Management Practice: A Guide to People Management. London: Kogan Page, 2010. Print.

Banfield, Paul, and Rebecca Kay. Introduction to Human Resource Management. Oxford: Oxford University Press, 2012. Print.

Beechler, Schon, and Taylor Sully. The Transfer of Human Resource Management Systems Overseas: An Exploratory Study of Japanese and American Maquiladoras. 1992. Web. 18 Nov. 20014.

Ivancevich, John. Human Resource Management: Foundations of Personnel. 12th ed. New York: McGraw-Hill/Irwin, 2012. Print.

Lawler, John, and Gregory Hundley. The Global Diffusion of Human Resource Practices: Institutional and Cultural Limits. Bingley: Emerald Publishing Group, 2008. Print.

Plessis, Andries, and Bob Beaver. “The Changing Role of Human Resource Managers for International Assignments.” International Review of Business Research Papers 4.5 (2008): 166-181. Print.

Regis, Richard. Strategic Human Resource Management and Development. New Delhi: Excel Books, 2008. Print.

Smith, Peter. “Organisational Behaviour and National Cultures.” British Journal of Management 3.1 (1992): 39-51. Print.

Stone, Raymond. Human resource management. 6th edition. New York: John Wiley and Sons, 2011. Print.

Storey, John. Human resource management: a critical text. (2nd ed.). London: Thomson, 2001. Print.

Tsui, Anna and Kt Lai. Professional Practices of Human Resource Management in Hong Kong: Linking Hrm to Organizational Success. Aberdeen: Hong Kong University Press, 2009. Print.

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