The first thing is to understand the meaning of human resource management. This is a department or a system in an organization that deals with employing, managing and giving directions to employees in an organization. In other terms, this is the department that deals with the employees’ compensation plan, health, general well being, security, training and other related issues in order to make sure that an employee is comfortable and able to deliver the required results to the maximum.
International human resource is therefore more global and deals with many countries worldwide more than an individual country. International outsourcing is the contracting or getting of outside (outside once own country) help or assistance in order to get a specific job done. This mostly includes getting human labor; machines etc. instead of getting it in once own country. This type of case is normally found in developing countries although developed countries are also affected in one way or another (Briscoe and Schuler, 2004).
In any case, the human resource department is supposed to ensure that a company or organization is growing progressing forward without any parties feeling that they are being oppressed or looked down at. It should ensure that both the employer and the employee are getting their part of the deal accomplished.
This may not be entirely possible due to one reason or another, but that should not be an excuse for being careless and leaving one party to languish in poverty hardly being able to make ends meet while the other is taking home a bag full of cash. Each should get what they deserve or at least close to what they deserve.
Challenges faced by the Human Resource Professional
Different countries have different cultures and some have no culture at all. This greatly affects the way work is done in that country since some countries use these cultures to guide them on how they will do their work. In Islamic countries, their religion requires them to play a couple of times in a day. These are normally specific times of the day. For this reason, when it is prayer time, a person leaves what he/she is doing and goes for prayers. This is done irregardless of what that particular person was doing even if it is driving. They simply pack the car aside then starts praying. This is normally done facing a certain direction (Mecca).
In the U.S.A, work is done day and night with only short necessary breaks and exchange of shifts. Such a country outsourcing from an Islamic country must be ready to adhere to their culture or otherwise there would be a lot of inconveniences experienced. In other countries, it is their culture to have afternoon siestas. All these can be challenges that could hinder the progress of work (Hira and Hira, 2005).
In some countries like Somalia, one is not supposed to receive money from another person’s hand especially when doing business. One put the money down then the one on the receiving end picks it up from the place it was put. All these are cultures that might inconvenience work progress if not properly observed or understood.
This is the process of choosing, picking and promoting employees. This is another field that might get a lot of challenges due to many reasons. One of the reasons is the different education systems used by the different countries. In some countries like India, one can get a law degree with learning as few as three years while in others, one can go as long as five to six years before acquiring a law degree. For this reason, some human resource professional may see as if some employees are less qualified therefore minimizing their chances of getting employment or getting contracts.
In other countries, education level is higher than other countries. For example, an undergraduate might be equal to another person doing masters in another country. For this reason, some employees might be underemployed or underpaid with reference to their education levels. All these are challenges that the human resource department might encounter for they have to try and gauge which level is equal to the education level in their country so that a specific duty or responsibility is given to the right person.
In some countries young teenagers of sixteen years are allowed to work but not to be given difficult work. In other countries, no one is allowed to officially work until one is an adult, which is normally considered when one attains eighteen years of age.
In some countries, foreigners are allowed to study and work e.g. U.S.A, Australia etc. while in other countries, foreigners can only do one thing at a time. They can either study fulltime or work fulltime (Hila R & Hila A, 2005).
Different countries use different currencies. Some currencies have a higher value than other countries. U.S.A dollar has a higher value than Indian Rupee, the Chinese Yuan and other currencies in the developing countries. For this reason, the human resource departments or professions should know how to go about it when outsourcing as it might become a challenge when it comes to payment. Terms and conditions should be agreed upon due to the different exchange rates. If when payment was agreed upon, the exchange rate was higher than the actual day of payment. Which rate should the contractor use? Is it the rate that was on the agreement day or the rate on the pay day?
Another challenge that might pop up in the payment process is the way the contracted taxes its employees. Some countries tax less on employees who are on contract than those who are employed permanently. Other countries do not tax employees who are on contract. Others tax by the much one earns so that the more one earns the higher the tax. The human resource should learn all these things so that it does not fall on the wrong side of the law of that country (Mathis and Jackson, 2008).
The payment mode can really slow down work progress if not properly understood or taken seriously. Some countries prefer contracted employees to be paid at the end of the month like permanent employees while others like employees to be paid at the end of the contracted. Others may also like the employees be paid in short periods in between the contract period while others leave the decision to the contractor (Daniels, Radebaugh and Sullivan, 2010).
Loss of jobs internally
This is a very great challenge to the department. Contracting other countries to perform a certain task or job means that the people who could have done the particular job in that particular country are left without a job. Most jobs done in other countries can be done in the contracting country it is just that these countries prefer this option due to many reasons.
For example, if a country contracts a foreign country to construct roads, the high possibility is this contracted company will come with their own employees and only get manual laborers from the contracting country. This leaves a lot of qualified unemployed people in that country. This is what has happened in Kenya as the Chinese have been contracted to construct some roads in that country (Kenya Ministry of Planning and National Development, 2010).
Risk mitigating factors
One of the risks involved in outsourcing is the loss of confidence and trust of the citizens. A company might loose popularity among the citizens of a country if it just gets its jobs done by contracting outside contractors. If people loose interest in a company, they will definitely loose interest its product which will lead to the product’s market drop.
Another risk is that there can be high employee turnover which is also not good for the company’s organizations’ well being. The company also ends up using a lot resources and time in equipping the employees who later go (Bragg, 2006).
There is also the risk of making a loss rather than the profit intended. This is because the cost of producing a certain product might end up being much higher than intended due to the varying exchange rates or the changing prices of materials and labor. Making a loss can make a whole company go down if thee are no proper managers who can handle the low moments in a company’s existence (Jacques, 2006).
Getting the job done involves a risk of the job not being done to a customer’s satisfaction. Different contractors might do certain jobs differently. If a job does not end up as intended, it might be a loss to the customer both to the contractor and the one being contracted. This might end up using more money than intended.
Another risk is destroying the relationship between two countries if some job is not done correctly. Apart from that, it is well known that the more one interacts with another, the higher the chances of making mistakes and wronging one another. The same interaction makes one know another more which is not different even between countries.
Bragg, S. M. (2006). Outsourcing: A Guide to the Correct Business Unit, Negotiating the Contract, Maintaining Control of the Process. 2nd ed. New Jersey: John Wiley and Sons.
Briscoe, D. R. & Schuler, R. S. (2004).International Human Resource Mamagement. New York: Routledge.
Daniels, J., Radebaugh, R., & Sullivan, D. (2010). International Business Environments and Operations. 13th ed. New York: Prentice Hall.
Hira, R. & Hira, A. (2005). Outsourcing America. New York: Library of Congress.
Jacques, V. (2006). International Outsourcing Strategy and Competitiveness. London: Paris Publi Books.
Kenya Ministry of Planning and National Development, Kenya National Economic and Social Council (2007): Kenya: Vision 2030. Nairobi, Government of the Public of Kenya.
Mathis, L. R. & Jackson, J. H. (2008). Human Resource Management. New Jersey: Thomson.