Personnel Needs to Support Globalization Efforts - Essay Example

Personnel Needs to Support Globalization Efforts Introduction Companies today are conducting business outside their own borders with a large number of them having extensive operations abroad while others prefer to engage only partially with foreign countries. Regardless of the extent of globalization in a particular company, it is becoming increasingly clear that certain human resource issues have to be dealt with before internationalization yields effective outcomes. Three crucial global challenges affect human resource managers, and these include deployment issues, knowledge dissemination as well as talent development. HR personnel must get the right skills for the right area of the organization regardless of where it is in the world, so this implies a need for proper deployment. Additionally, companies are required to spread the latest practices and knowledge throughout the entire organization in spite of where it comes from, so knowledge dissemination is vital. Finally, firms must deal with the challenge of effecting talent development for the global organization by identifying and developing those talents. Most important skills and qualifications for overseas assignments in Scandinavian countries In order to select international managers, it is necessary to accommodate some of the issues that make global work more challenging than local assignments. Therefore, certain social and personal characteristics have to be met by the qualifying candidate, and the first one is intercultural sensitivity. The concerned manager needs to know how to work with people from different cultures; it may not be necessary to hire from the Scandinavian nation, as sensitivity to all cultures is the chief concern but if a Scandinavian possesses the qualities, then he should be hired. Being adventurous in terms of culture is a bonus as this individual should enjoy working with persons that do not belong to his or her own background. This manager needs to demonstrate an ability to work with other people and to bring out the best in them (Spreitzer, McCall & Mahoney, 1997). The right manager should also have sound business knowledge of the services and products being offered by the company initially. In order to make the person truly international, the applicant ought to have knowledge of how the business is conducted on a global level. Sometimes this may come in the form of experience when working in the same company or could also come in the form of exposure to similar competitors. Risk-taking is a desirable quality for the individual as running a regional department requires substantial risks and ventures, which must be accommodated. There should be demonstration of plenty of insight when dealing with complex issues and also a commitment to the success of the organization. Sometimes having these qualities may necessitate acting with integrity as telling the truth will spare the organization from unwanted disadvantages on all levels (Covidien, 2014). A high degree of openness to criticism is essential for an international manager in Nordic countries as several things may change with time. It may also be imperative for the person to continually look for feedback from others even in instances when they are unenthusiastic about it. Seeking new ways of learning is also highly desirable because the concerned manager needs to take advantage of various opportunities when they present themselves (URS, 2014). Aside from social characteristics that must be valued by all international firms, research also shows that certain skills are paramount in succeeding within Nordic countries. For instance, technical skills and competencies have been shown to bear a lot of weight in the determination of the appropriate candidate for a job in most Nordic countries. In a survey conducted among these nations, it was found that 46% of growth firms in Denmark value technical skills and competencies. In Finland, Norway and Sweden, the degree of emphasis on the skill was 60%, 49% and 53% for growth companies, respectively (Ministry of Employment and the Economy, 2012). This indicates that aspects like possession of computer technology expertise, having knowledge of certain designs and other technical parameters is crucial in the country. The quality should not be disregarded when hiring because the selected manager will be in charge of Scandinavian division and his abilities should mimic those ones sought after among the locals. Organizational skills and competences have also be shown to carry a lot of weight in the Nordic job market, so these qualities will be given due consideration during recruitment. The survey cited above demonstrated that in Nordic countries, companies have moderate degrees of commitment towards the quality. The following was the percentage level of dedication that firms in Nordic countries demonstrated towards organization skills; 51%, 38%, 46% and 37% representing Denmark, Finland, Norway and Sweden respectively (Ministry of Employment and the Economy, 2012). Therefore, candidates ought to demonstrate that they have had experience in team management, leadership and project management. Finally, methodological skills will also be another form of competence assessed during the recruitment process; these refer to processes needed to get work done. For instance, managers need to have an ability to make presentation, carry out research and organize their work properly. However, the latter competence is not as critical as other skills like social skills and technical skills as these carry more weight in the Scandinavian environment. Educational qualifications will also be critical owing to the fact that several countries in the region value it; these nations believe that a person’s education reflects their ability to learn. It also shows how effective their analytical skills are and the intensity of their work ethics. People with a high range of qualifications in the same category are more likely to attract more attention than those who choose not to do so. Having an analytical mind as shown through high educational accomplishment will be a desirable quality; however, it will be even more important for them to have a creative mind. Therefore, having the right mix of social skills, problem solving and analytical skills will mark the difference between ideal and non ideal job candidates. Challenges of doing business abroad The expansion of business into overseas markets has serious implications on the human resource function, and HR personnel ought to adjust accordingly in order to accommodate those needs. First, candidate selection alters when one deals with overseas workers; here business and technical skills are not sufficient as global projects need additional traits like interpersonal skills, sensitivity to culture and a high degree of flexibility (Pucik, Tishy & Barnett, 1992). Labor laws and rules differ substantially between the host nation and the target one, so pay arrangements, compensation programs and other benefits could be acceptable in the US but be illegal in Scandinavian nations. Issues such as inflation rate may have to be accommodated when establishing pay scales for employees in the foreign nation. Additionally, mandatory health insurance could different in the host nation and the target one, so necessary accommodations have to be made. Perhaps one of the biggest challenges in human resource management of globalized firms is cultural differences between the foreign subsidiary and the host nation. Countries differ in terms of the language they speak, their value systems, extent of power distance, individualism, and a range of other cultural parameters. In some countries, a lot of emphasis is given on group work, so compensation ought to be tied to these aspects; however, others tailor work incentives on an individual basis because their cultures dictate this. These differences in cultural factors require human resource department to alter selection processes in light of local norms; they also point towards the need to hire locals in the management of human resources (Pucik, Tishy & Barnett, 1992). If an employee has the same culture and attitude as the overseas workers, it is likely that the selection process will be in tandem with the needs of locals and the HR function will be more effective. Economic challenges may also impede seamless human resource transitions into the global platform as inter-country differences matter. Some countries have free enterprise systems where efficiency is the driving force behind employment practice, so human resource issues may put at the periphery. In such nations, work hours may be higher, pay may be linked to output and staff cuts are also quite common when market forces dictate. On the other hand, some countries place human resource needs above other factors and will try to safeguard employment even when it comes at the cost of efficiency. The latter nations belong to socialist systems while the former ones happen to capitalist ones; this factor will come into play in the concerned company because Scandinavian countries are largely perceived as socialist while the US is predominantly capitalist. In close association with the economy is the cost of labor factors; companies often strive to get as much value for their input as they can, and human resource is no expectation. If labor costs are high in a certain country, then a company is likely to dwell on efficiency, so they may implement pay for performance regimes in order to get employees to improve their outcomes (Pucik, Tishy & Barnett, 1992). Conversely, the nature of output mandated by the government also affects global HR practices as work weeks in some countries are substantially lower than in others. Pay vacations may be a requirement in some areas and be non-obligatory in others; these gaps require alterations in compensation outcomes. Industrial relations may also affect business in the international market because the strength of trade unions may vary from nation to nation. Some countries do not interfere with labor market issues while in other countries, employees have due right to participate in the creation of company polices; these differences must be anticipated and accommodated. It takes a considerable amount of money to send employees to overseas markets as more often than not, the company must accommodate their families in these efforts. Estimates show that some companies spend as much as five times the employee’s local salary to make that move. Therefore, HR personnel must decide where it is more effective to hire locals for certain positions or where it would make more budget sense to use expatriates (Jones, 2010). Relocation challenges may also impede the smooth transition from local to global business as a number of technical issues ought to be provided first. Assignment letters containing details about the person’s pay as well as their requirements need to be documented and so do tax programs and benefits. Sometimes pay considerations may differ between the host and target nation owing to differences in living expenses as well as government wage policies. When an employee reaches the overseas department, they require assistance in relocation concerning transportation, residential location, shipment and many others. These issues are all a matter of concern for the company sending the employee as it must ensure everything is in order lest the relocation fails. Hiring plan When sourcing for candidates, it may be imperative to select the professional employer organization to provide applicants, as their affiliation to an employment organization eases technical difficulties in hiring. The organization will also consider whether there is something unique that the candidate can offer within the concerned position. If local staffing agencies can supply workers and no external candidate has been found to compel an international applicant’s case, then it is better to go local. Local vendors know all the laws in the Nordic region and have the capacity to assume employment and compliance responsibilities. This will save the organization from having to incur extra costs in researching about these facts, and it will also be aware of the risk involved in non compliance (Nordic Centre for Spatial Development, 2013). In order to ensure that the new manager is successful, it will be critical to conduct an adaptability screening test in which the applicant will be assessed for his probability to succeed in Scandinavian countries. This is a psychiatrist test that looks at a person’s and his or her family’s ability to handle a transfer to a foreign subsidiary (Roberts, Kossek & Ozeki, 1998). In the screening process, if a candidate demonstrates non work or work experience in living with other cultures, then he or she should be given priority. Usually, education acquired from Nordic countries, command of Swedish, Finnish or other native tongues, and travelling experience in that target area is an advantage. An organization such as Colgate Palmolive lives by this philosophy; the best determinant of future success is their past experience. This organization often considers certain aspects of the applicants life that demonstrate a commitment to working abroad, so even modest exposure to foreign living is valued. The psychiatric test should then be followed by a series of interviews in which the applicant will demonstrate all the earlier-mentioned qualities like social skills, technical skills and methodological ones. Usually, the ones with the right education background will be contacted for the interview as this will be the initial method of removal (Stahl, Ingmar, Farndale and Morris, 2011). After the above tests, the company will gather as many of the basic facts about the candidate as possible; these include bio-data and job relevant information. For instance, the person’s citizenship will be known, their residency status as well as their visa status; this ought to be combined with the target residency for the individual. Once this has been established, it may be imperative to make different plans and allocate more resources if the manager will come from a country other than the target nation. Details about the salary, responsibilities for the concerned managers as well as the time allocated for the project will be identified. Matters of health insurance as well as other benefits will also be covered in the agreement as sometimes local laws may not include expatriate workers. Once the right candidate has been identified, it will be imperative for the company to create an employment contract; local contracts will no longer be appropriate. The organization will need to create a template that can be used every time the company needs to hire internationally; it can then customize on the template depending on the local laws under consideration. Utmost care should be taken in order to accommodate the workers’ protection laws, employment regulations, insurance issues as well as termination clauses affecting the candidate. In the event that some sort of immigration will need to occur, then the right work authorization should be established. This means that the firm needs to know the right body to authorize the visa for the successful applicant as well as other issues. It may be critical to consult and plan early in order to minimize any time wastage that may result from the concerned authorities. Matters to do with travelling and safety need to be accommodated as there may be dangers associated with hiring a person from certain countries of the world, especially those where political instability is common. During the budgeting process, it may be necessary for the organization to consider some of the tax and income liabilities that will result in the Scandinavian countries. Usually, persons accumulate tax liabilities when in a foreign nation, so they ought to be placed on local payrolls in order to meet their tax obligations. Usually, it is relatively easy for the payroll agency in the Nordic country to provide these compliance services and most of them will charge a modest fee for their service (Norden, 2013). The company must also be keen on the payroll tax costs as it also has obligations to its own local nation; it may be imperative to work with payroll service providers that will handle these issues on behalf of the firm. Problems with double taxation could also result, so it may be necessary to consider whether a totalization agreement exists between the United States and any of the Nordic countries. Some of the expenses that will be included in the hiring process include the costs of transportation, relocation allowances and housing needs. Obtaining work authorization and immigration requirements for the applicants should also be included in the department, and so should the manager’s salary. Payroll service costs as well as social tax obligations either associated with the hired person or the concerned company need to be taken into consideration as well. Conclusion As mentioned in the introduction, companies have to alter their human resource strategies in order to accommodate globalization efforts, and this is also true for a manager working for a US firm in the Nordic region. Some of the human resource challenges that companies must respond to in the international arena include intercultural differences, differences in labor relations, economic differences, relocation challenges and labor cost differentials. In order to deal with issues, the person being hired into the company needs to demonstrate social or personal characteristics that include openness to learning, correction and cultural sensitivity. However, in order to include Scandinavian employment preferences, it will be necessary for the company to hire people with proper technical skills, organizational skills as well as education expertise. References Covidien (2014). Regulatory affairs manager (Nordic countries). Retrieved from https://careers.covidien.com/job/140001mq/regulatory-affairs-manager-nordic-countries Jones, S (2010). Going global: How international firms are using the internet to recruit. Canadian HR Reporter, p. 21. Ministry of Employment and the Economy (2012). Working in Finland. Retrieved from http://www.te-palvelut.fi/te/en/pdf/workinginfinland.pdf Norden (2013). Working paper 3: demand and supply of labor in the competitive job creators. Retrieved from http://www.damvad.com/media/45797/wp_3_-_demand_and_supply_of_labour_by_the_competitive_job_creators.pdf Nordic Centre for Spatial Development (2013). The Nordic countries at the top of their game. Retrieved from http://www.nordregio.se/en/System/News/The-Nordic-countries-at-the-top-of-their-game/ Pucik, V., Tishy, N. & Barnett, C. (1992). Globalizing management. New York: John Wiley & Sons. Roberts, K., Kossek, E. & Ozeki, C. (1998). Managing the global workforce: challenges and strategies. Academy of Management Executive 12(4), 93–106. Spreitzer, G., McCall, M. & Mahoney, J. (1997). Early identification of international executives. Journal of Applied Psychology, 82 (1), 6–29. Stahl, G., Ingmar, B., Farndale, E. and Morris, S. (2011). Six principles of effective global talent management. MIT Sloan Management Review, 3, 45. URS (2014). Career opportunities. 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