What Companies Operating Overseas need to invest in for Employees working in Global Operations
The primary objective of any HR department in an organization is to invest in the motivation of staff to ensure quality work. Multinational organizations are not an exception. Factors, such as the interests of employees, remuneration packages, development and training, and promotions must be favorable. MNC’s, however, operates in very peculiar circumstances as opposed to local companies (Liu & Lee 2008). For example, one distinct characteristic of the workforce in international companies is the mixture of the expatriate and repatriate employees in service delivery. Further, these organizations work in a totally new environment and must, therefore, adhere to the labor and safety standards of the countries in which they operate in order to comply with corporate social responsibility (Liu & Lee 2008). It should also be noted that the main intention of locals seeking employment opportunities in multinational companies is to advance in their careers professionally, receive good remuneration, and acquire the necessary skills. Professional training must, therefore, be a part of multinational companies’ employment priorities. For the expatriates, however, there is a need to learn and understand the foreign languages, the culture, and the traditions of the local people, as well as the laws and regulations governing workers in the host country (Lazarova & Caligiuri 2002). All these issues, therefore, form a foundation of some of the areas in which multinational companies can invest in employees for proper production and strong retention. I will, therefore, endeavor to discuss them below.
Investing in the Employee Selection Process
The success and failures of employees working in multinational companies vary from one country to another. Therefore, there is a need for companies to carry out surveys to identify a proper selection criterion that meets the needs of the local employees. A failure on the part of multinational companies connotes the expatriates returning to their countries and local workers quitting their jobs for more successful and well-paying ones (Lazarova & Caligiuri 2002). According to research, 10 percent of the United States of America companies end up failing in their international endeavors. This is detrimental to the development of a company as it affects the company’s growth and reputation (Lazarova & Caligiuri 2002). On the part of the expatriates, some of the reasons as to why they fail is because of the inability of the spouses to cope in a foreign country and the failure to sustain the international responsibilities at work. In Japan, the multinational company’s expatriates complain of the lack of the necessary skills and competency in the handling of the job. Therefore, the selection process is necessary to get the right staff. It is obvious that a huge investment should go to this sector. The vetting process for the selection of employees must be a thorough one and encompass all the tests ranging from intelligence tests, expertise tests, and cultural adaptability tests. In meeting the criteria highlighted above, the personal characteristics of an employee are also necessary for a company to realize whether the employees they are about to send for international assignments are capable of changing and improve the organization. Their spouses have been proven in the past to comply with such requirements. Further, the adaptability test must also be conducted on the employees and their families to ascertain that they are indeed up to the task (Chew, 2004). The experience is another important aspect of the employee selection process in these companies. The experience is based on the time spent by the employee on international assignments. In most cases, during a pre-assignment visit by an employee to the country, they are expected to work so that a test of their ability to cope up with the life there can be tested. To this end, a multinational company should substantially invest in the selection of workers based on their personal characteristics, job experience, and adaptability.
The second most significant investment by multinational companies towards their employees is investment in education and development. Most companies, for example, realize the importance of training but are reluctant to initiate it. This attribute is more common in North American Companies (Chew 2004). The investments necessary to train international workers must fall within a four step process as highlighted below. The first training of any international worker, must always focus on cultural differences (Chew 2004). This test assists in assessing whether an employee is capable of meeting the cultural requirements of the company. It is also at this level that the differences in cultures are depicted, and the employees’ competence is tested to affirm that the employee will be of great help to the company. The second examination is the attitude test which tries to assess the positive and the negative attitudes of an individual and their impact on the company (Chew 2004). After these two examinations, the third one involves assessing whether the employee has enough factual information regarding the company he is about to work in. After all these, the training in language becomes more vital, and it is at this point that the company should also step in to assist the employee’s family in adapting to the international setting. One of the companies that are very dedicated to following this process is IBM, which has a development center in virtually all countries it operates in, geared towards training its employees.
Investment in Good Compensation
When it comes to compensation, a multinational company must always ensure that the pay scales are not discriminative and that they are in line with the payments within the countries they operate. For example, in senior management, the salaries of the managers on the same level in all the branches of the company internationally should be the same. Such a system is referred to as international compensation management (Chew 2004). If the international payment rates are not properly considered, then it may lead to the cost of living in some countries being more expensive than the employees can afford. When this scenario happens, the workers will be tempted to seek jobs in other companies (Evans, Pucik & Barsoux 2002). It, therefore, calls for the company to conduct a very thorough research regarding the compensation of the companies and creates an equity in the salaries using the allowances as a way of balancing the wages where possible. One of the companies that conduct these surveys annually is the Kraft Company. The surveys are conducted in UK, Germany, and Spain (Evans, Pucik & Barsoux 2002). Lastly, the mobility premiums are also a good incentive to encourage the employees to continue working in the organization.
Investment in Employee Appraisals
Employee appraisals are usually a very key aspect of the motivation of the employees working in virtually all organizations. The issue, however, becomes problematic in multinational organizations, especially when dealing with the question of expatriates (Chew 2004). The determination of who is responsible for the promotion of an expatriate is always a complex one. For example, cultural differences make it very difficult because if local management has to decide on the appraisals, then it will lead to bias (Chew 2004). An expatriate in the United Kingdom, for example, may be examined differently for the appraisal purposes. If the task was also left to the management in the home country, they might not understand the working difficulties of the country an expatriate is based in. Therefore, the geographical limitations may prevent fairness from being achieved in the process (Chew 2004). A team of specialists must, therefore, be hired by multinational companies to conduct research and rate expatriate managers, while considering the difficulties they undergo in their countries. Such a move would assist in a smooth appraisal that would leave every employee motivated
Barriers and Problems in the Expatriation Processes of the Multinational Companies
The term expatriation, when concerning the operation of multinational companies, refers to the transfer of employees or expatriates from their home countries to international assignment in another country (Baruch & Altman 2002). On the other hand, the term repatriates refers to the employees sent on international assignments, who voluntarily choose to return to their home country (Baruch & Altman 2002). These two aspects present processing problems and must be well managed for the company to progress effectively. When the employees get repatriated, upon uniting with their families, they always perceive their employers as having neglected their professional and personal needs (Baruch & Altman 2002). Hence, one major problem that arises is the feeling that an expatriate has lost touch with the mother company at home and is, thus, disconnected from the company’s culture. The “Out of sight, out of mind” feeling is developed in the employee, making them less productive in the home company (Chew 2004). Further, these workers feel disconnected from the home company’s executives and those in the senior management positions. For these reasons, when the expatriates get back home, they are usually placed in very mediocre positions in which they feel less appreciated by their companies and would even prefer working for other companies.
It has become apparent that the cross-cultural experience gained by expatriate employees abroad is of less value to the multinational company, as compared to the experience earned in the parent firm based in the home country (Chew 2004). Any employee working abroad, therefore, considers his experience to be of no value, rather than having added value and capable of giving him a good job when he goes back to the parent company. These people even end up shocked when they discover that their old friends, who they left home, had already risen up the corporate ladder and are now holding very senior positions, even despite being juniors when the expatriate left (Evans, Pucik & Barsoux 2002). The family of the expatriate also experience numerous problems uniting with their old friends, often leading to a culture shock (Evans, Pucik & Barsoux 2002). Worse, however, is the fact that the expatriates who feel undervalued by the company may choose to move from the company to another company in search of greater opportunities and appreciation (Evans, Pucik & Barsoux 2002). When the latter happens, the company loses an important and useful human resource. Thus, the fear of lack of promotion always acts as a barrier for people undertaking international assignments.
In a similar manner, expatriates face numerous challenges in the country they intend to work in abroad. The first problem is the cultural and language barriers (Chew 2004). It, therefore, means that these expatriates must take their time to learn the local language and the culture of the country they work in. The second barrier is the need to find a suitable place to stay and cope up with the local community (Chew 2004). The other barriers, however, are similar to the repatriation barriers.
Recommendations to the Multinational Companies in Solving the Expatriation and Repatriation Problems
Since the expatriates feel disconnected from the company and the community at large as a result of their international experience, I recommend that a reorientation program is offered both to the repatriates and the members of their families to assist them in adapting to the life back home.
Second, the Multinational companies should come up with repatriation agreements. These agreements should clearly state the duration of the stay for the expatriate in a foreign country. The agreement should go further and state that upon the repatriation of an expatriate employee, a job which is similar or more valuable than the one held abroad will be offered to them. These terms will give confidence to the employees, and they will feel more valued.
Third, multinational companies should embrace the career counseling options as a way of creating confidence for expatriates. Career counseling may help expatriates find value in their international assignments worth embracing and putting into practice in the parent firm in the home country.
Fourth, the employee should also be granted one sponsor who hails at the parent firm. The sponsor must be an individual at the senior management level. The work of the sponsor should be to keep the expatriate updated on all the matters affecting the company back home. Through the sponsor, the expatriate may be able to negotiate in his interest in the parent organization at home and remain relevant.
The fifth recommendation is that there should be a close tie between the expatriate and the parent organization at home. All communications about the running of the business must, therefore, be kept open. If possible, video conferencing should be used so that all the managers become a part of the meetings of the company, notwithstanding the locations they are in physically. Other means of keeping the communication going may include granting leave from time to time so that expatriates could attend meeting at the headquarters and keep abreast of the important issues affecting their interests.
Finally, a key challenge to the expatriates is the manner in which they will pick up work in their home country, considering that some of them have to sell their houses. The companies should, therefore, ensure that they offer financial assistance to meet the legal and real estate costs necessary for maintaining home property.
In conclusion, just like local workers, expatriates sent on international assignments need to be motivated to remain productive in the company. The motivation may come in the form of appraisals, good remuneration, and the company’s investment in the safety of employees, training and development, and investing in teaching language and culture. Further, several problems arise that affect the expatriation and the repatriation processes, which include leaving one’s home, fear of demotion and lack of recognition of one’s international experience, and the language barrier. Constant communication between the expatriates and the headquarters may, however, assist in solving the problem.