Human Resources and Talent Management in a MNC PDF

SECTION 3 Unit 7: Human Resources and Talent Management in a MNC Internationalization of Businesses: Management and Strategies (EUS) Maite Ugalde Enríquez 1 Contents 1. Design of the international policy of Human Resources: Expatriates...

SECTION 3 Unit 7: Human Resources and Talent Management in a MNC Internationalization of Businesses: Management and Strategies (EUS) Maite Ugalde Enríquez 1 Contents 1. Design of the international policy of Human Resources: Expatriates vs. Local Executives 2. Expatriation process 3. Life as an expatriate 4. Talent Management in a MNC *Images in these slides have been downloaded from the internet for teaching purposes. They are property of third parties. 2 Contents 1. Design of the international policy of Human Resources: Expatriates vs. Local Executives 2. Expatriation process 3. Life as an expatriate 4. Talent Management in a MNC 3 Design of the international policy of Human Resources: Expatriates vs. Local Executives A relevant difference between the domestic companies and the internationalized companies is the “expatriate” figure. Internationalized companies foster talent between the parent company and subsidiaries. ○ Nowadays, not necessarily considered expatriates → Currently, the expatriate figure is still among executive roles It is a relevant strategic decision of the MNC 4 Design of the international policy of Human Resources: Expatriates vs. Local Executives Local Executives Locals appointed with an Executive role (key decision making and influencing the strategy of the company) ○ Domestic talent MNC with a multidomestic approach usually appoint local executives 5 Local Executives Pros (advantages) Cons (disadvantages) Major proximity and “identification” with the Distance (physical and sometimes cultural) local team. to the holding or parent company Cost advantage → Not as expensive Cultural advantage → Easier to manage Internal advantages → Internal management of the company 6 Design of the international policy of Human Resources: Expatriates vs. Local Executives Parent company nationals (PCN) as Expatriates MNC with a Global approach usually appoint executives that are nationals from the parent company Pros (advantages): Talent that is already highly engaged with the MNC’s culture, they know the “rules” or company policies and have a shared or common approach as MNC/ parent company (HQ) Cons (disadvantages): High economic cost, local “instability” lack of engagement with local team. https://www.youtube.com/watch?v=3YV6jP5DW30 7 Design of the international policy of Human Resources: Expatriates vs. Local Executives Third-country nationals (TNC) as Expatriates (different from hosting and parent company) MNC with a Transnational approach usually appoint executives that come from a different country from the parent company Pros (advantages): Combines advantages of the other 2 models Cons (disadvantages): They are still “foreign” talents, but with lower barriers to a “cultural” fit with the local subsidiary 8 Contents 1. Design of the international policy of Human Resources: Expatriates vs. Local Executives 2. Expatriation process 3. Life as an expatriate 4. Talent Management in a MNC 9 Expatriation process 1. Recruitment and selection Technical qualification Management and leadership skills Cultural sensitivity 2. Training Intercultural and technical training (informational approach, affective approach, immersion approach) 3. Compensation Goals and objectives Remuneration: cost of living, foreign service premium, etc. 4. Barriers of the expatriation and repatriation process Challenges of relocating expatriates The Key To Running A Successful Company: Hire The Right People | How I Made It | CNBC - YouTube https://www.youtube.com/watch?v=DQnoYZI2xnk 10 Expatriation process Updated expatriation process and current alternatives Some companies have decided to shorten the expatriate process into specific projects lasting between 2 months to 1 years, fostering shorter stays ○ It has a lower cost for the company ○ Might suit better the professional in terms of career growth Companies appreciate professionals with international profiles that can be posted in diverse destinations ○ Specialists in international management ○ Transnational Executives or Technics ○ International assignments (short and medium duration) 11 Expatriation process Characteristics of expatriate assignments Expatriate assignments usually take between 3 to 5 years overseas ○ They include an expensive package that the company provides to compensate the effort the family does for living abroad: accommodation, schools, return tickets, etc. Expatriates face challenges once their assignment abroad has expired → relocating expatriates in the HQ is an issue companies need to manage ○ Valuation of the international experience in the HQ ○ Position once relocated lacks of “enough” responsibility ○ Reverse cultural shock, there might exist a lack of connection to the HQ 12 Contents 1. Design of the international policy of Human Resources: Expatriates vs. Local Executives 2. Expatriation process 3. Life as an expatriate 4. Talent Management in a MNC 13 Life as an expatriate Shrugging Your Way Through Expat Life | Tim King | TEDxWestFurongRoad https://www.expat.hsbc.com/expat-explorer/ 14 Life as an expatriate - Phases in Cultural Adjustment 15 Life as an expatriate BGRS Global Mobility Tends (2017) 16 17 Contents 1. Design of the international policy of Human Resources: Expatriates vs. Local Executives 2. Expatriation process 3. Life as an expatriate 4. Talent Management in a MNC 18 Talent Management Origins: Greece, which was later transferred to Latin talentum. 19th century → Meaning linked to the person. Tansley, Turner and Foster (2007) ○ “Those employees who are expected to make a difference in the performance of the organization through their immediate contribution or their expectation of long-term performance.” People who regularly demonstrate exceptional ability and achievement in a range of activities and situations or within a specialized field (Williams, 2000). 19 Global Talent Management (strategies) 1. Comprehensive succession planning - Strategy that is aligned with market conditions and business needs. - Companies today need skills that go beyond those available nationally. - It does not only imply deciding on a person, but also being able to develop high-potential profiles, whether they are possible candidates or not. 2. International mobility - Expats 3. Employer brand - Create an image and culture that fits globally. - Not only will the employer brand have positive effects internally, but also externally. Having a consistent employer brand will help the company position itself in the market and make workers want to be part of it. https://greatplacetowork.es/mejores-empresas-trabajar/ 20 Challenges Björkman and Smale (2010) Challenge 1: Who to focus on? Challenge 2: How to evaluate “potential”? Challenge 3: How to avoid country of origin bias? Challenge 4: Will you tell those who have been selected, and those who have not been selected? Challenge 5: To what extent should we focus on talent identification, and to what extent on development? Challenge 6: Succession planning or talent pools? 21