2. These managers are considered third country nationals, or TCNs The most qualified candidates are selected, but no single nationality is stressed. In theory, the relationship between your business (the client) and the contractor is governed by general contract law. Parent-Country Nationals Advantages • Organizational control and coordination is maintained. This term paper will investigate the advantages and disadvantages that go along with a polycentric attitude concerning international recruitment in multinational enterprises. The majority of companies who use third-country national staffing have many operations already overseas. Four approaches to international staffing, advantages and disadvantages. Table 14.4 Advantages and Disadvantages of the Three Staffing Strategies. There are several advantages of this staffing policy. There are lots of regulations to deal with, since you have to abide by more than one country’s tax code. The Problem: Intellectual Property Protection. Too often, communication-style differences can be perceived as performance issues , when the root issue is that both sides aren’t on the same page yet. Finally, a third-country national strategy means to employee people from an entirely different country from the home country and host country. The Disadvantages of Internal Staffing Advantages of Internal Recruitment. These individuals are called expatriatesAn employee from the home country who is on international assignment in another country.. Recruiterbox. It is expensive than ethnocentric staffing policy. Available under Creative Commons-ShareAlike 4.0 International License. The advantage, as shown in Table 14.4 "Advantages and Disadvantages of the Three Staffing Strategies", of hiring a host-country national can be an important consideration when designing the staffing strategy. There are also many difficulties with adjustment of PCN especially related to languages barriers. iii. 8. 2. Frustration may occur because of everyday living, such as language and cultural differences., adaptionA phase of expatriate adjustment; the employee gains language skills and starts to adjust to life overseas. Many consulting firms who work in particular regions have a network of resources they can tap to help you.”. Relocation costs are usually much lower and a standard compensation package consist with local market is usually sufficient. Perhaps the biggest benefit of hiring internationally is that you’re no longer constrained by your talent pool, and can look to hire purely on the basis of talent. Other disadvantages of this approach of international staffing is that there is no promotion opportunity for HCN’s as promotions for managerial position stays with PCN expatriates. Types of Staffing Strategy. But when that’s not an option, it’s more important than ever to keep everyone up to date. The main reason why companies use third-country nationals as a staffing strategy is the ability of a candidate to represent the company’s interests and transfer corporate technology and competencies. Second, sending employees abroad is a very good way of developing managers into a competitive and knowledgeable cadre. In this phase, the expatriate is embracing life overseas. They include job factors, relational dimensions, motivational state, family situation, and language skills. Here we look at the advantages and disadvantages of each option. It creates a sense of security among the employees. “More Third Country Nationals Being Used,” n.d., SHRM India, accessed August 11, 2011, Table 14.4 "Advantages and Disadvantages of the Three Staffing Strategies", Table 14.5 "Categories of Expatriate Success Predictors with Examples", http://www.expat-daily.com/news/russia-starts-to-abolish-expat-jobs/, http://articles.economictimes.indiatimes.com/2011-04-20/news/29450955_1_global-firms-joint-ventures-investment-banking, http://www.newyorker.com/reporting/2011/06/06/110606fa_fact_stillman, http://www.shrmindia.org/more-third-country-nationals-being-used, The third-country national may be better equipped to bring the international perspective to the business, Managers gain experience in local markets, Possible better understanding of local rules and laws, Costs associated with hiring such as visas may be less expensive than with home-country nationals, Possible greater understanding and implementation of business strategy, Hiring costs such as visas are eliminated, Morale builder for employees of host country, Adapting to foreign environment may be difficult for manager and family, and result in less productivity, Host-country manager may not understand business objectives as well without proper training, Must consider traditional national hostilities, Expatriate may not have cultural sensitivity, May create a perception of “us” versus “them”, The host government and/or local business may resent hiring a third-country national, Familiarity with host country and headquarters operations, Interest in specific host-country culture, Willingness to acquire new patterns of behavior and attitudes. . As a result, the appropriate selection process and training can prevent some of these failings. Congratulations! How to Recruit. What are the advantages of engaging international contractors? The Problem: Tax Rates. Figure 14.2 Phases of Expatriate Adjustment. But as with most remote hiring situations, the biggest problem is one of communication. This is the focus of this section. Are you going to relocate them, or are they better off working remotely? Read this book using Google Play Books app on your PC, android, iOS devices. If you’re not keeping employees in the loop, they may not know what they should be doing. Research methodology This term paper analyses the pros and cons of polycentric staffing … Table 14.4 "Advantages and Disadvantages of the Three Staffing Strategies" lists advantages and disadvantages of each type of staffing strategy. One of the major decisions for HRM when a company decides to operate overseas is how the overseas operation will be staffed. What are the main advantages and disadvantages of the ethnocentric polycentric and geocentric approaches to staffing … In the resistance phase, the employee may start to make frequent comparisons between home and host country and may seek out reminders of home. Most companies who utilize third-country national labor are not new to multinational businesses. Larry Harding ( @HardingLarry ), advises that while it’s important to have someone to navigate the legal intricacies of hiring globally, having someone on the ground can be just as useful. The globalisation of the world’s business economy has been particularly significant, resulting in an increase in the importance of, and interest in, international human resourcing. Trained and/or experienced potential workers to choose from: The baby boomer generation is gradually retiring. Whichever strategy is chosen, communication with the home office and strategic alignment with overseas operations need to occur for a successful venture. When looking for outsourcing opportunities, an organization should look at potential areas and each component within that area to determine if part … In this assignment, we will define in a first part the four main approaches to staffing within International Human Resource Management and what are the advantages and disadvantages of each approach to . But if you can afford relocation, or have figured out how to avoid the pitfalls of remote work , hiring international employees is more than worth it. Advantages & Disadvantages of Ethnocentric Approach Advantages Disadvantages When lack of qualified and or skilled employees in the host country. Divya Rajagorpal and MC Govardhanna Rangan, “Global Firms Prefer Local Executives to Expats to Run Indian Operation,”. As a result, it might be difficult to synchronize schedules in order to ensure your customers receive what’s promised to them on a reliable timeline. Explain the reasons for expatriate failures. In an International Assignments Survey,“More Third Country Nationals Being Used,” n.d., SHRM India, accessed August 11, 2011, http://www.shrmindia.org/more-third-country-nationals-being-used. Compare and contrast a home-country versus a host-country staffing strategy. Potential advantages include: Flexibility. In the elation phase, the employee is excited about the new surroundings and finds the culture exotic and stimulating. The first strategy is a home-country national strategyThis staffing strategy uses employees from the home country to live and work in the country.. First, securing the personnel control, on this way firm try to incorporate headquarters’ culture, values, norms, goals into foreign operations (Traven, 2006). 14INTERNATIONAL STAFFING 15. Types of Staffing Strategy . Discuss the requirements to obtain a work visa in that country. GEOCENTRIC APPROACH DISADVANTAGES: Host govt. The US military has more than seventy thousand third-country nationals working for the military in places such as Iraq and Afghanistan. Be able to explain the three staffing strategies for international businesses and the advantages and disadvantages for each. In this phase, the expatriate is embracing life overseas. How do you source, engage, interview and hire someone from another country? And that’s not even the paperwork stuff. Family stress, cultural inflexibility, emotional immaturity, too much responsibility, and longer work hours (which draw the expatriate away from family, who could also be experiencing culture shock) are some of the reasons cited for expatriate failure. So now you’re getting better workers, more retention, and the advantage of someone who can expand an untapped marketplace for your organization. First, in the. Disadvantages of Internal Recruitment. The advantage, as shown in Table 14.4 "Advantages and Disadvantages of the Three Staffing Strategies", of hiring a host-country national can be an important consideration when designing the staffing strategy. also discusses the advantages and disadvantages of particular approach in staffing policy. Of course, hiring internationally isn’t the same as hiring remotely . Advantages and Disadvantages of Joint International Ventures 861 Words | 3 Pages. Table 14.5 Categories of Expatriate Success Predictors with Examples. Instead, upper level management positions are held by the most qualified employees selected form a global pool of candidates. For example, Shiv Argawal, CEO of ABC Consultants in India, says, “An Indian CEO helps influence policy and regulations in the host country, and this is the factor that would make a global company consider hiring local talent as opposed to foreign talent.”Divya Rajagorpal and MC Govardhanna Rangan, “Global Firms Prefer Local Executives to Expats to Run Indian Operation,” Economic Times, April 20, 2011, accessed September 15, 2011, http://articles.economictimes.indiatimes.com/2011-04-20/news/29450955_1_global-firms-joint-ventures-investment-banking. Sometimes during this phase, expatriates may even tend to reject their own culture. One major disadvantage of outsourcing particular tasks is the risk that your freelancers or partner agency may be marching to the beat of a different drum. Expensive to implement because of training and relocation expense. A phase of expatriate adjustment; the employee gains language skills and starts to adjust to life overseas. To employ people who were born in the country in which the business is operating. When globalization first occurred, it was more likely that expatriates would be sent to host countries, but in 2011, many global companies are comfortable that the skills, knowledge, and abilities of managers exist in the countries in which they operate, making the hiring of a host-country national a favorable choice. Read More. And if you’re worried about these new remote hires slacking off, don’t; remote workers are happier , work better and are less likely to quit. The valuable contacts with major suppliers are kept when staffing is done internally. Are they bilingual? Foreign experience is seen as necessary for further companies’ … Requires more centralized control of staffing. Frustration may occur because of everyday living, such as language and cultural differences. A short discussion on why international assignments fail. In Russia, 42 percent of respondents in an expatriate survey said that companies operating there are starting to replace expatriates with local specialists. What can you gain from hiring someone from across the pond. The likelihood the assignment will be a success depends on the attributes listed in Table 14.5 "Categories of Expatriate Success Predictors with Examples". Advantages And Disadvantages Of Staffing Options In International Human Resource. In this case, the third-country national approach might be the better approach because of the language aspect (both Spain and Argentina speak Spanish), which can create fewer costs in the long run. 19 January, 2016 - 15:28 . Let’s explore some of the advantages and disadvantages of outsourcing. Explain the reasons for expatriate failures. It can take a lot of time, effort, and money to find the perfect candidate...recruitment agencies may be the answer you're looking for! Polycentric Staffing The advantages of Polycentric Staffing Policy are: i. Sometimes the best person to do this isn’t based in the United States or in the host country. “Hiring and managing talent overseas can work if both sides are willing to work together to make it a success. need for bilingual workers continues to rise, performance problems when it comes to international hiring, hiring internationally isn’t the same as hiring remotely, check out our website and request a live demonstration today, Are you willing (and able) to deal with the. You’re thinking about hiring internationally! First, it is less costly in both moving expenses and training to hire a local person. During the adaptation phase, the employee gains language skills and starts to adjust to life overseas. A phase of expatriate adjustment; the employee may start to make frequent comparisons between home and host country and may seek out reminders of home. Also important are the connections the host-country nationals may have. This would be opposed to the company in the United States sending an American (expatriate) manager to Argentina. It assists in infusing beliefs and practices into foreign country. Choose a country you would enjoy working in, and visit that country’s embassy page. pressurizes MNC to employ high number of HCNs. They include elation/honeymoonA phase of expatriate adjustment; the employee is excited about the new surroundings and finds the culture exotic and stimulating., resistanceA phase of expatriate adjustment; the employee may start to make frequent comparisons between home and host country and may seek out reminders of home. Sometimes during this phase expatriates may even tend to reject their own culture. But first, let’s discuss the recruiting process. “An accountant with international experience is useful, but it’s also a good idea to get help from someone who’s handled hiring in that area, such as a consultant . Then you have an even bigger advantage, because while the need for bilingual workers continues to rise, the number of job seekers planning to study a second language in America is quite low. In fact, many American companies are seeing the value in hiring third-country nationals for overseas assignments. In the last phase, biculturalism, the expatriate embraces the new culture and begins to appreciate his old life at home equally as much as his new life overseas. The international company is a type of multi-unit business organisation, which has a corporate centre in its home and its business units located in various host countries. Develop and align your staff through better recruiting and applicant tracking, performance management, and learning management. Download for offline reading, highlight, bookmark or take notes while you read The Pros and Cons of International Staffing Policies. ... Outsourcing can be a permanent or temporary arrangement to bridge the gap in staffing, to learn better quality techniques or improvement of faulty product design. In this phase, the expatriate is embracing life overseas., and biculturalismA phase of expatriate adjustment; the expatriate embraces the new culture and begins to appreciate his old life at home as much as his new life overseas. Home » Human Resource Management » International HRM » Staffing Internationally. German and French workers have been rated as more productive than American workers in the past, even though Americans have longer work weeks. Recruitment can be done in-house OR through an external recruitment agency. Many of the problems associated with expatriate failures, such as family life and cultural stress, have diminished. One of the major decisions for HRM when a company decides to operate overseas is how the overseas operation will be staffed. There has been a rapid pace of internationalization and globalization over the last decade. The host-country national already knows the culture and laws, for example. International … Trakstar is a multi-product HR software provider helping organizations put the people back in people management. The disadvantages of setting up a foreign entity can include: The expense and time required for setting up a full local company may not be worth it in a market with unknown potential There is an increased risk of triggering “permanent establishment” and exposure to corporate tax liability Time consuming. Many of the problems associated with expatriate failures, such as family life and cultural stress, have diminished. Limits to the promotion of employees, which might … The Problem: Labor Laws, Agreements, and Contracts. The second staffing strategy is a host-country national strategyTo employ people who were born in the country in which the business is operating., which means to employ people who were born in the country in which the business is operating. It is the personnel that a company employs that makes the difference. Most companies that want to hire internationally are either adept at handling remote workers, or can splurge on relocation.