The challenges faced by the MNCs

The purpose o this report is to examine the challenges faced by the MNC’s while making the selection strategy for expatriate employee/s, effects of Internationalization on the companies and the challenges faced by the Human Resource Manager/s. We will focus of the factors which are important to consider when hiring and placing an expatriate. The process starts from the creation job position and the requirement and selection of the right person and involves the hiring procedure, the compensation and benefits etc.

An expatriate is a person who leaves his country to work and live in a foreign country.

The need of expatriate is created when there is unavailability of the required skill set and talent makes the organization to find talent from other countries. The procedures and policies of recruiting and selecting the human resources are different, even within a single organization. The procedures differ according to the post, the skill set required, the nature of work etc.

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Recruitment of Expatriates:

The number of organizations venturing into global business arena has increased and so has the number of business representatives crossing international borders have surged dramatically. It has become of an utmost importance for MNC’s to attract, select, develop and retain employees who can live and work effectively outside o their own national borders. An organizations corporate culture has an impact on the expatriate selection strategies (including policies and criteria) used in MNC’s

The recruitment and selection procedures and considerations are drastically different for expatriates than that of the domestic employees. Recruitment of expatriates involves greater time, monetary resources and other indirect costs. Improper recruitment and selection can cause the expatriates to return hastily or a decline in their performance. 

A mismatch between job (its requirements) and people can reduce the effectiveness of other human resource activities and can affect the performance of the employees as well as the organization. The recruiters for recruiting the expatriates should be carefully selected and trained. The recruitment strategies for expatriates should be aligned with requirements of the job. The interviews of expatriates are designed in a manner to judge there: 

Adaptability to the new culture

Attitude and motivation

Empathy towards local culture

Family situation

Flexibility

Intercultural interaction

Language ability

Past international work experience

Professional expertise

Tolerance and open-mindedness

Recruiting expatriates require special considerations and skills to select the best person for the job. Except for a few expatriate selection policies, the expatriate selection criterion is generally organization and nation specific. There are many factors which should be considered prior to the recruitment process.

The job / position description:

Job descriptions are like roadmaps that guide you to your specific destinations. Within a company, they allow the employees concerned to understand their role and how they fit into the organizations vision and mission. Job descriptions point to the landmarks that employees must reach to come to the desired end results of their efforts within the gridlines of their duties. They define the employees speed, given the timeframe when they are supposed to finish a given task. Employees have roles to play and are made accountable for them through clear statements of duties in their job descriptions.

While job descriptions provide the stability to an employee’s position, job descriptions should have a built-in mode that allow their functions and responsibilities to be modified as dictated by the dynamic processes that go on within the business. This fact notwithstanding, job descriptions should also provide a way for the continuous assumption of roles regardless of how managers interpret what is stated in the job description. They should be no arbitrary interpretation that could manipulate the roles beyond the obvious and what is really done in practice.

For the job description that reflects the realities of the position of the manager of engineering equipment plant to be established in Australia, some of the important factors we should consider are as follows:

PRIMARY RESPONSIBILITIES

Prepare engineering analysis of projects to include: preliminary design, calculation, life cycle cost and equipment selection.

Conduct surveys to gather field data.

Prepare and interpret blueprints, schematic drawings, layouts and other visual aids.

Prepare technical construction specifications.

Perform Civil engineering duties surrounding the following; public works, buildings, sub-divisions, drainage, traffic, road, airport, tunnel, bridge, water supply, sewage, and environmental systems.

Perform Mechanical engineering duties surrounding the following; mechanical devices, components, engines, transportation equipment, environmental control, materials handling, machine tools, robots, automated manufacturing equipment, and power producing machines such as internal combustion engines, steam and gas turbines, and jet and rocket engines.

Perform Chemical engineering duties surrounding the following; food, pharmaceuticals, heat transfer and energy conversion, petrochemicals (chemicals made from petroleum or natural gas), or consumer products such as plastics, detergents, paint, and synthetic textiles.

Manage construction document printing process.

Manage project issues, budgets, and schedules.

Review and critique proposed changes to engineering standards, policies, or details.

Review development plans for compliance with adopted engineering standards and good engineering practices.

Meet with the general public and/or developers, landowners, and interest groups concerning zoning, subdivision projects, building projects, and engineering regulations, standards, or policies.

Coordinate the activities of the design and construction teams.

Other duties as assigned.

ADDITIONAL RESPONSIBILITIES

Provide technical presentations to elected officials, appointed boards/commissions, the public, and staff.

Function as chief inspector on engineering projects.

Provide on-the-job training to new staff.

KNOWLEDGE AND SKILL REQUIREMENTS

Knowledge of applicable federal, state and local building codes and safety laws. Work requires advanced math skills, special relationship abilities, and the ability to understand “abstract” principles behind math and physics. Working knowledge of CAD tools. This is normally acquired through a combination of the completion of a Bachelor’s Degree in Civil, Mechanical, or Chemical Engineering and three to five years of engineering experience. Requires registration as a Professional Engineer.

Work requires travel to meetings, site visits, and inspections. This requires the possession of a valid state drivers license within 60 days of employment.

Work requires willingness to work a flexible schedule.

A sample position / job description and person specification may be as follows:

Person Specification

Job Title: Campaigner

Department: Campaigns

E = ESSENTIAL, D = DESIRABLE for applicants to meet relevant standard

SELECTION CRITERIA

CRITERIA

STANDARD

E/D

MEASURED BY

Work experience

At least 2 years’experience of working or volunteering within a campaigning organisation.

E

Application form

Experience of working with volunteers

E

Application form/Interview

Experience of carrying out research

E

Application form/Interview

Experience of lobbying and/or working with MPs/civil servants/local authorities.

D

Application form/Interview

Experience of organising and prioritising a demanding workload

E

Interview/Test

Experience of setting up events and meetings

E

Application form/Interview

Knowledge

Knowledge of political processes

E

Application form/Interview

Knowledge of environmental/ conservation issues

D

Application form/Interview

Skills

Ability to produce accurate work to tight deadlines under pressure

E

Application form/Test

Ability to communicate clearly in writing and orally to committees and small meetings

E

Application form/ Interview/Test

Word processing skills/ability to be self-sufficient in terms of administration

E

Application form/Test/ Interview

Ability to draft campaign literature

E

Application form/Test

Attitude

Commitment to An Organisation’s aims

E

Application form/Interview

Compensation and Benefits:

Human Resource Management (HRM) has never been as significant as it is today. Companies want to attract, retain and motivate brains to meet objectives. Today Humans are regarded as one of every company’s assets so they need to be efficiently and effectively managed. One of the tools companies use to attract, retain and motivate its people is Compensation Management.

Gary Dessler in his book Human Resource Management defines compensation in these words “Employee compensation refers to all forms of pay going to employees and arising from their employment.” The phrase ‘all forms of pay’ in the definition does not include non-financial benefits, but all the direct and indirect financial compensations.

A variety of factors can directly affect expatriate compensation, with three primary approaches an organization should consider. These factors include

host-country cost of living

housing, dependent education

tax implications

health care – factors most often incorporated as a component of one of the primary approaches to compensation discussions: destination-based approach, the balance-sheet approach, and the international headquarters approach..

Benefits:

Employees today are not willing to work only for the cash alone, they expect ‘extra’. This extra is known as employee benefits. Also known as fringe benefits, Employee benefits are non-financial form of compensation offered in addition to cash salary to enrich workers’ lives.

Employee benefits as a whole have no direct affect on employee performance, however, inadequate benefits do contribute to low satisfaction level and increase absenteeism and turnover in employees (DeCenzo and Robbins; 2007). The benefit package has to be carefully designed. Your package may include a cell phone to each worker, taking them to a training workshop or seminar, giving them a day or two off every month and so on. While deciding on the benefits package, do consider the associated costs.

Advantages of Compensation and Benefits:

Advantages to Your Boutique:

A well designed compensation and benefits plan helps to attract, motivate and retain talent in the organization. A well designed compensation & benefits plan will benefit your organization in the following ways.

1. Job satisfaction: The employees would be happy with their jobs and would love to work for you if they get fair rewards in exchange of their services.

2. Motivation: All employees have different kinds of needs. Some of us want money so they work for the company which gives them higher pay. Some value achievement more than money, they would associate themselves with firms which offer greater chances of promotion, learning and development. A compensation plan that hits workers’ needs is more likely to motivate them to act in the desired way.

3. Low Absenteeism: Why would anyone want to skip the day and watch not-so-favorite TV program at home, if they enjoy the office environment and are happy with their salaries and get what they need and want?

4. Low Turnover: Would your employees want to work for any other boutique if you offer them fair rewards. Rewards which they thought they deserved?

Advantage to Your Employees:

1. Peace of Mind: your offering of several types of insurances to your workers relieves them from certain fears. Your workers as a result now work with relaxed mind.

2. Increases self-confidence: Every human being wants his/her efforts to get acknowledgment. Employees gain more and more confidence in them and in their abilities if they receive just rewards. As a result, their performance level shoots up.

I hope this hub added to your knowledge of compensation management. I shall, explain types of rewards & parts of salary in my next hub.

Authorization to Recruit and Advertising the post:

Before the beginning of the recruitment and selection process, the authorization for making the hiring for the post is to be obtained.

Furthermore, the advertisement of the post is also very important. The advertisement can be made within the organization to give equal opportunity to existing employees and tit may be done through media, newspapers or a third party recruitment firm. The advertisement must give information related to type of post, is it temporary or permanent, desired skills and personality traits etc. The information is based on the information compiled in Job Description and Person Specification.

Composition of the Selection Panel:

A composition panel should be in place to conduct the necessary interview and analyze the candidates. The panels should include supervisors and colleagues of the job position in question. The advantage of committee interviews is that they are more reliable and job-related since panel members are accountable to each other, and interviewer can make their decisions on the same sample of behavior.

Candidate Selection:

Staff responsible for shortlisting, interviewing and selection of candidates is clearly informed of selection criteria and of the need for their consistent application. They are given guidance or training to the effects which generalized assumptions and prejudices about sex, race, disability, age, religion/belief and sexuality can have on selection decisions. They are made aware of the possible misunderstandings that can occur in interviews between persons of different cultural background.

Wherever possible, shortlisting and interviewing will be done by members of the selection panel. 

Shortlisting decisions will be based on the information provided by applicants measured against the criteria listed in the person specification.

Selection Tests:

Selection tests can be very useful tools in the selection process to help with assessing the suitability of candidates for the role. Any tests and selection procedures must be fair, unbiased and directly relevant to the central requirements of the job. Ideally, they should take place in an environment similar to the job situation.

For the given Job of a Manager of new plant of engineering equipment, the person needs to possess sufficient technical knowledge as well as he should have good managerial and leadership qualities.

Invitation to interview letters:

Once the Human Resource prepares the shortlist memo, the candidates will be invited for the interview. The HR will also send an interview pack to the interview panel members which will have a set of CV’s of the short listed candidates, references of the candidates (if applicable) copy of the advertisement, job description and person specification and Interview record form.

In the interview letters, the candidates are given clear directions about the venue and directions. The reception will also be informed of expected arrivals of the candidates.

Travel an accommodation expenses:

There might be candidates who will need to travel from a distance. There must be plans and arrangements in place to accommodate them. In case the organization is making arrangements for them to stay in the company rest house, the required intimations and notifications should be sent. If no such arrangements have been made, then appropriate compensation must be paid to any such candidate.

The selection Interview:

Preparation is an important part of the recruitment and interviewing process. It is very necessary for the Interview Panel to meet in advance. It is not adequate for the panel members to meet a little time before the start of interviews. Suitable time should be set aside for the panel members to meet and decide

Interview format.

Order of questions / specific questions (if any).

General mood and direction of interview.

Any details the candidate may need to know about the role / position in question.

At the time of shortlisting, the applications are looked through and so general o specific questions can be developed at this phase.

Appoint a successful candidate:

Once all the candidates have been interviewed and analyzed, the final selection is made. The final assessment is based n the evidence given through the questioning and any exercises or tests (if conducted). In some panels, scoring systems are opted for assigning marks to the candidates and then each area of criteria is looked if it has been full met, partially met or has not met at all.

The most important thing is the justification of the decision made. All the candidate records, interview details etc. should be kept under proper records for any future reference or use.

Making an offer:

After the panel has made their decision, the offer should be presented in front of the candidate verbally. The offer detail should cover the details such as:

The salary scale

The pattern of work / job in question and the start date

Request for satisfactory references

Verification of provided data / qualifications

Requirement of work permission in Australia / visa related issues:

The selection criteria should also consider the eligibility of the candidate that he qualifies for Australian work visa.

Unsuccessful candidates and second choices:

Unsuccessful candidates will be notified in writing soon after the successful candidate has accepted the offer of employment. The panel should also keep a second choice candidate in case the preferred candidate is unable to accept due to any reason.

Once the acceptance is received from the candidate, a final letter of regret is sent to the remaining candidates.

Expatriate Preparation:

Expatriate failure is a serious problem generally resulting from the lack of familial or situational readiness or cross-cultural adaptability of expatriates and their accompanying families. While the financial burden of a failed expatriate assignment can be staggering, the indirect costs to an organization’s global strategy can be devastating. A discontented expatriate can lower the morale of the company as well as cause irreparable damage to relations with foreign partners, customers, and the host country employees.

Employees Safety and Expatriate Family:

Expatriate Preparation is important as it ensures that the company’s risks are minimized through professional training of both the expatriate employee and his /her family.

The arrangements should be employees and their families to successfully transition from one culture to another by enabling them to develop an understanding of the concept of culture and intercultural communication, the notions of national differences and values orientations, differences in organizational cultures, the psychological processes of cross-cultural transition, and country-specific knowledge. With these tools, the expatriate employees and their families will be able to fully enjoy their experience, and function effectively in their new environment.

Sufficient effort must be put into consideration of expatriate families. The children are required to live in appropriate premises with secure living. The school going children must be provided with the right educational opportunities and recreational facilities for a healthy academic and social life.

There are a number of factors attributing affecting the expatriates and repatriates.

Inadequate selection criteria

Inadequate plans of orientation and training for expatriates

Inadequate plans and arrangements or the expatriate spouse and children.

Inappropriate system for communication and support.

Repatriation Plan:

When the expatriate assignments come to an end, the time comes for the employees to come back to the parent company. Unlike the common belief, repatriation puts forward additional issues as compared to expatriation. The expatriate employees commonly assume that they will be assigned their previous or higher job position and will receive all the benefits that were attached with it only to in the situation different from what they think.

For one reason or another a large percentage of those who move abroad actually return home at some point in the future…

The repatriation shock issues are apparent in various ways and originate from an ongoing, underlying sense of confusion in the mind of the expatriate.  On the one hand the want to feel ‘at home’ in their country of birth, in their old house even, but changes such as government, road layout, bureaucratic rules up to a change in staff at the old place of employment make them feel alienized and this is what the repatriating individual is not prepared. The feelings of displacement and confusion are hard to encounter.

There are a number of support practices that HR professionals can consider to help managers develop realistic expectations about their work and non-work lives before repatriation, making the experience more positive and rewarding for all parties involved.

Maintain contact with the ‘home’ office

Ensuring contact is maintained between the expatriate and their home unit decreases the ‘out of sight, out of mind’ risk for both parties, as well as making the eventual transition from expat to repat smoother. Many expatriates are often ‘tapped up’ by the competition well before their own company starts to talk with them about repatriation.

There are a variety of ways to maintain this contact, for example, inviting expatriate managers to ‘dial in’ periodically to staff or team meetings on a conference call facility that enables them to update their colleagues on their plans and activities; arranging return visits to the home office; or having a named contact in the home country to ensure that both parties are kept informed and up-to-date on progress and plans.

Agree what will happen after the repatriation

Pre-departure career discussions are a positive way for HR professionals to begin managing repatriate expectations. By defining an individual’s repatriation job status early, they are less likely to worry about their situation and more likely to concentrate on the job in hand. As a result, they can better prepare for the repatriation when it eventually occurs.

Following repatriation, many employees find themselves in a holding post, with no serious job to do, or in a new position with clearly less authority than they had while abroad. Not only does this situation prevent individuals from using the skills they acquired overseas, but it has a significant negative impact on employee morale and motivation, with the prospect of driving valuable employees out of the business.

Manage the additional knowledge coming in to the business

The organisation needs to consider how it will use the additional knowledge and experience individual managers have gained through the expatriate experience.

This process needs to be considered and managed from the beginning of the managers’ relocation – development and strategic goals need to be agreed from the outset to ensure there are valuable outcomes for the individual and the organisation. ‘Debriefing sessions’ with senior managers are also a good way for the organisation to learn more about its international environment and to make the repatriates feel valued.

Consider the impact on work and personal relationships

The change in interpersonal relationships between repatriates, their colleagues and friends must also be a significant consideration. Reintegration, particularly where there may be jealousy about the time abroad or changes within departments, can cause problems for repatriates. Maintaining communications between the expatriate manager and the ‘home’ office will minimise the effect of this situation.

Family members and dependants also have a huge impact on the success of the repatriation – if they are unable to adjust to the move ‘home’, this is likely to become the focus of the employee’s attention, distracting them from their work and, as the employee becomes less productive and less motivated, their levels of satisfaction and their value to the business are diminished.

HR needs to consider strategies such as re-entry counselling for all those involved in the move, as well as building in the needs of the family and dependants into repatriation programmes.

Is it worth it?

Although it is a complicated process to implement, generally it is accepted that foreign experience is good for career development. It is only when there is no careful management of the repatriation process that the value of overseas experience may be lost to the organisation and to the individual manager.