Overview of International HR Activities
International HR activities can broadly be categorized into five major areas:
- Staffing
- Performance Management
- Training and Development
- Compensation
- Recruitment and Selection
Let’s go over each one in simple terms:
1. Staffing
Staffing is all about figuring out how many people a company needs, what roles they need to fill, and then hiring the right people to do the job. It includes things like planning for future workforce needs, forecasting, and figuring out how to get the right people in the right place.
In international HR, this becomes more complex. Companies have to consider whether to hire locals or bring in employees from other countries.
Here’s how companies usually break it down:
- HCNs (Host Country Nationals): Locals hired in the country where the company is operating.
- Expatriates (Expats): Employees working outside their home country. They can be:
(a). PCNs (Parent Country Nationals): From the country where the company is headquartered.
(b). TCNs (Third Country Nationals): From a different country altogether.
For example, a U.S.-based company might send an Indian manager to Brazil—that’s a TCN.
In regions where skilled manpower is limited, like parts of Africa or Latin America, companies may hire skilled professionals from countries like India instead of their home country, where the cost may be higher.
2. Performance Management
Performance management is basically how a company measures and improves employee performance. It includes setting clear expectations, giving feedback, and making decisions related to promotions, pay, or transfers.
But managing performance internationally isn’t so straightforward.
Some challenges in global performance management:
- Conflicts between what the headquarters wants vs. what local branches need
- Different market situations in each country
- Cultural differences when giving feedback
- Lack of comparable performance data across locations
HR managers need to balance global consistency with local sensitivity. Also, international markets often take longer to show results, so patience and proper planning are important.
3. Training and Development
Training is about giving employees the skills and knowledge they need to do their jobs better. Development goes beyond that—it prepares them for future roles and responsibilities.
When employees move abroad, it’s not just about training them. Their families also need support to adapt. That’s why pre-departure training for the employee, spouse, and kids is becoming common. It helps make the transition smoother and reduces adjustment issues.
4. Compensation
Compensation refers to all the financial rewards employees receive, like salaries, bonuses, and benefits.
For international roles, designing a fair compensation package is tricky. It must:
- Match local laws and standards
- Attract and retain good talent
- Be fair and motivate performance
There are three main types of compensation strategies used for expatriates:
- Home-Country-Based: Salary is based on the home country’s pay scale (also called the balance sheet approach). For example, an Indian posted in the US would still get an India-based salary plus some benefits to equalize cost of living.
- Host-Country-Based: Salary is based on what local employees earn in the host country. Benefits might still be tied to the home country.
- Hybrid System: A mix of both. This is designed to create a more globally unified approach, treating all expatriates as part of one international workforce.
5. Recruitment and Selection
Recruitment is how companies attract the right people to apply. Selection is the process of choosing who actually gets the job.
These processes can vary a lot between countries:
- Asia: Formal testing is very common. People are comfortable with exams and detailed screening.
- USA: Formal testing is used less due to legal concerns around equal opportunity and affirmative action.
- Europe: Somewhere in between Asia and the USA in terms of testing.
- Canada: Even less testing than the US because of stricter human rights laws.
Because every country has its own legal and cultural context, international HR teams need to adjust their hiring methods accordingly.
In Summary:
Managing human resources across borders comes with unique challenges. Whether it's finding the right people, setting fair compensation, or managing performance, international HR requires balancing global goals with local realities. A strong IHRM strategy can help organizations stay competitive and build a global workforce that’s ready for the future.
