The Staffing Challenge in MNCs: Expatriates or Locals in Overseas Locations
Why MNCs Need to Follow a Glocal Approach in Staffing of their Operations Overseas
Unlike domestic firms that operate in their own countries, Multinational Corporations or MNCs that operate worldwide face several challenges in terms of staffing and other Human Resource Management (HRM) functions as they have to deal with cultural, legal, logistical, and strategic issues in overseas locations.
Take for instance the case of an MNC that is operating in India or China. It not only does have to comply with domestic laws and rules and regulations, but, also has to deal with challenges in terms of adapting its global organisational culture to the local conditions without losing the essence of what it means to be an MNC.
In other words, it has to ensure that it does not lose its global focus and at the same time, melds itself into the local milieu.
What this means is that MNCs have to follow what is known as a Glocal approach (a term coined by the celebrated columnist and expert on globalisation, Thomas Friedman) wherein it retains its global organisational DNA and at the same time, adapts itself to local strategic imperatives.
While the Glocal approach can be applied to any and all of MNCs functions, we focus on the specific case of the staffing function in MNCs.
Staffing Challenges for MNCs in the Initial Phases of Operations in Overseas Locations
To start with, MNCs usually send expatriates in the initial stages of their operations overseas.
This is done to ensure that when the basic structures, not to leave out the physical premises, are being setup, it is necessary for Senior Level Expatriates, with enough experience in the parent firms to be based in the local offices overseas so that they can train and guide the local staff about the type and nature of the policies and the strategies that the parent firm is known for.
In other words, when MNCs setup operations overseas, they have to ensure that there is enough senior staff from their parent offices so that adequate guidance and knowledge transfer can happen to the local staff.
At the same time, it is also the case that this handholding and walking the local staff through the paces cannot continue indefinitely and hence, it is also common for MNCs to gradually withdraw their expatriate staff once the overseas locations are up and running.
Indeed, in our working experience, we have come across many expatriate managers who based themselves in locations all over India when their firms were setting up shop.
When to Transition to Local Staff and How to Retain some Expatriates
Having said that, it is also the case that many MNCs often ask some of such expatriate staff to remain in the overseas locations even after the initial setup is done and after the local subsidiaries are up and running.
The reason for this is that MNCs need their expertise and specialised knowledge in the management of operations and the administration of local units that cannot be provided by the local managers.
This is the case with MNCs that are in banking (investment banking and equity research and trading, to name a few) and in highly niche BPOs or Business Process Outsourcing units.
Moreover, even automotive majors such as Suzuki and Honda usually have expatriates running their overseas locations for reasons as specified earlier.
In addition, they also have expatriates on deputation for short and medium term periods to ensure that the strategic focus and the tactical direction of the firms are in the right paths as decided by their parent firms.
For instance, Amazon, which is betting big on India, has been seeing several high profile visits as well as permanent basing of its expatriate staff to ensure that its overall strategic thrust is maintained.
Cultural Challenges, Clamour for Locals as Staff, and Other Staffing Issues for MNCs
On the other hand, MNCs also realise that they cannot have too many expatriates based in the overseas locations as cultural and other challenges arise that can derail their objectives.
For instance, while India is known to have a large number of English speakers who are also more or less attuned to Western trends and lifestyles, the same cannot be said of other countries where expatriates often find it tough to adjust to the local milieu.
Moreover, there is also the case of the so-called Hardship Allowance that is paid to expatriates for being based overseas.
In addition, there are many countries (including some Indian states in recent months) that have been passing laws that mandate locals to be employed and hence, taken together, these challenges mean that MNCs have to necessarily be Glocal in their approach.
Apart from this, expatriate pilots and other service sector staff too now face challenges in many countries (including India) where there is a growing backlash against hiring them when local talent is available.
What more, it is also a challenge for expatriates to understand the administrative and legal as well as logistical challenges that confront MNCs in overseas locations and which can be easily dealt with by the local staff.
Finding the Optimum Staffing Mix
Therefore, the choice between expatriates and locals in the staffing matrix can be dealt with by taking into account all these factors and once the balance is achieved, then MNCs can glide into the smoother drive.
Of course, finding this balance can be tricky at times and this is where most management experts are now veering around to the view that a Glocal approach works best for MNCs.
To conclude, the desire for profit is the strategic imperative that drives MNCs into overseas locations and at the same time, it is counterbalanced by cultural challenges and hence, staffing challenges do arise which need to be dealt with professionally and with adaptability.
|❮❮ Previous||Next ❯❯|
- Hiring & Firing of Workers: Perspectives
- What to do if You are Laid Off from Job
- Termination and Outplacement
Authorship/Referencing - About the Author(s)
The article is Written By Prachi Juneja and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.
- H R Management - Introduction
- Importance of HRM
- Scope of HRM
- Various Processes in HRM
- What is Human Resource Planning ?
- The HRM Function
- Functions of a Human Resource Manager
- Staffing Role of the HR Manager
- Role of HRM in Leadership Development
- Role of HR in People Empowerment
- Talent Management and HRM
- Management of Contractors
- Performance Management as a HR Management Concept
- Successful Performance Management
- Hiring Strategies
- Social Media Profiles for Hiring Decisions
- Importance of Background Checks
- Retention Strategies
- Strategic HRM
- Global HRM
- Personnel Management vs HRM
- Managing Employee Performance
- Performance Appraisal Process
- Performance Appraisal Interview
- Managing Employee Relations
- Employee Rewards and Recognition
- Variable Pay
- Diversity in Organizations
- Managing Workforce Diversity
- Workplace Health and Safety
- Workplace Safety Programs
- OSHA Safety Manual
- HR Challenges
- Human Resource Audit
- Hiring in Shadow of Stagnating Growth
- The Challenges of Managing Attrition
- Employee Separation Process
- Tips for Pursuing a Career in HRM
- Role of HRM in Recessionary Times
- People Manager vs. Project Manager
- Use of Contract Staff & Temp Workers
- The Necessity of Drafting Proper and Foolproof Employment Contracts
- Importance of Vacation Planning
- Hiring & Firing of Workers: Perspectives
- What to do if You are Laid Off from Job
- Termination and Outplacement
- Emotional Intelligence for Professionals
- Assigning Key Responsibility Areas (KRAs) to Employees
- Role of HR in Performance Appraisals
- HR Policies and Procedures Manual and Employee Handbook
- Managing Downsizing in Organizations
- Managing Attrition in Organizations
- Rise of the Temp Jobs and the Freelance/Sharing Economy
- What is Blind Hiring and Its Implications for the HR Profession
- How Human Resource Managers should Manage Ethical Issues and Ensure Compliance ?
- Issues Related to Human Resource Management in the Hospitality Sector
- Human Resource Management in the Times of Emerging Digital Economy
- Human Resource Management in the Age of Acceleration
- How to Manage Star Performers and High Achievers
- Actualizing a High Trust Organization
- HRM Strategies for an Increasingly Complex, Uncertain, and Volatile World
- How Human Resource Managers can deal with Difficult Employees
- Why Human Resource Management Must Change for the Coming Robotics Revolution
- How Silicon Valley Firms are Implementing Innovative Human Resources Policies
- Effective HRM Strategies to Smoothen and Sweeten the Downsizing and the Layoff Process
- How HR (Human Resources) Function Can Save Time by Automating Routine Tasks
- How HR Managers Can Help Employees Avoid Burnout and Manage Stress
- Human Resource Management Strategies to Diversify the Workforce
- What is an HR Scorecard and How it Helps Contemporary Organizations?
- How Using the HR Scorecard Creates Long Term Value for Organizations
- How Technology Can Help in Collection of Metrics for the HR Scorecard
- HR Scorecard: Aligning People, Strategy, and Performance
- How Using the HR Scorecard Can Address Organizational Dysfunction
- Human Resource Management Best Practices in Contemporary Organizations
- Using HR Scorecard with Analytics to Actualize Next Generation Performance
- How the HR Scorecard Helps Actualize Cross Functional Excellence in Organizations
- How the HR Scorecard can Help Gig Economy Firms to Manage Freelancers Better
- How the HR Scorecard Helps Organizations to Actualize Change Management Initiatives
- How Innovative HR Policies boost Employee Productivity and Organizational Effectiveness
- Changing Recruitment Strategies of Corporates and Tips to Get Hired
- What is Social Mirror and How it Determines Individual Success in Career and Life
- What Do Hiring Managers Look for in Applicants when Making Hiring Decisions
- Why the Future of Work is Virtual, Gig Based, and Cognitive and its implications for HR
- Why HR Managers Must Enforce Data Security and Information Protection Policies
- Why Corporates Must Have Wellness Managers as well as HR Managers
- What is Employee Ghosting and How HR Managers and Organizations Can Deal with it
- The Increasing Popularity of Corporate Wellness Programs and What HR Can Do
- What Experienced HR Managers Watch Out For When Recruiting Candidates
- The Importance of Data Driven Analytics and HR Scorecard Dashboards for Corporates
- What Hiring Managers Look Out For During the Recruitment and Selection Process?
- The Growing Popularity of Flex Work and HR Strategies to Deal with It
- What the Case of Amazons AI Powered Recruitment Tool Means for Other Corporates
- Pay Cuts vs. Lay-Offs
- Game Changers or Slave Drivers? Human Resource Managers in the Gig Economy Firms
- Preparing for the Workplace of Tomorrow: Some HRM Strategies for the Digital Age
- The Managerial Challenge: Using Early Warning Systems to Spot Signs of Trouble
- Top HR Trends for 2019: Technological Convergence and Smarter HR Management
- How Should HR Managers Deal With Occupational Hazards at the Workplace?
- How HR Managers Must Deal with Legal and Regulatory Challenges in Organizations
- How HR Managers Must Address the Pay Disparities and Pay Gaps in Organizations
- How HR Managers can Make the On-boarding Process more Pleasant and Effective
- Why HR Managers Must Treat the Exit Interviews as Feedback and Learning Experiences
- The Importance of Due Diligence in Human Resource Management Processes
- The HRM Challenge: Managing the Millennials Entering the Workforce
- The Future of Human Resource Management in an Agile Driven and Automated World
- The What, Why, and How of the Difficult Decision to Fire Employees in Organizations
- How Using Blockchain Can Transform the HR Function and Change the Way it Works
- Corporate Corruption and the HRM Function: Legal, Ethical, and Moral Perspectives
- How Predictive Analytics Helps HR Managers Make Better Hiring Decisions
- Skills that the HR Professionals Need to have to be Successful in the Present Times
- The HRM Challenge: Promoting Diversity and Inclusivity in Illiberal and Charged Times
- Role and the Importance of Human Resource Managers in Recessionary Times
- How Blockchain can Help Human Resource Managers in Efficient Management
- HR Professionals and the Law: The What, Why, and How of Awareness of Laws
- Is the European Model of HRM Better than the American Model? Some Perspectives
- The Staffing Challenge in MNCs: Expatriates or Locals in Overseas Locations
- The HRM Challenge: Managing Opinionated Employees in Polarized and Divisive Times
- Why Auditing of the HR Function is Necessary and Important in the Present Times
- The Role of the HR in How Corporates Can Win (and Lose) the Global Race for Talent
- The Changing Nature of Employment and Impact on Professionals and Societies
- Fixing Fraud and Biases in the Recruitment Process and Making it Fair and Transparent
- HRM Strategies in Non Profits and How Similar and Different are They from Corporates
- Organizational and HRM Strategies for Virtual Workplaces and Remote Workforces
- The Role of Feedback in Enhancing Employee Performance and Productivity
- The Role of Monetary and Non Monetary Incentives in Enhancing Employee Performance
- Will Hire and Fire at Will Labour Laws Work in the Indian Socio-Economic Context?
- How Insights from Behavioural Science Can Help Corporates in People Management
- What is Ghosting and How it Disrupts the Hiring Process and Ways to Tackle this Menace
- How Staffing Agencies Need Better Regulation in the Corporate Ecosystem
- How Corporates Have to Let Go of Legacy Employees in an Empathic, Yet, Firm Manner
- Designing an Effective Pay and Perks Package across the Organizational Hierarchy
- Why Do Some Excel in the Interviews, But, Fail on the Job and How HR Can Fix This?
- Why Technology Can Diminish the Role of HR Function, but, Not Eliminate It Altogether
- The Challenges of Recruiting and Onboarding Remote Employees in Virtual Workplaces
- The Importance of Values in Human Resource Management in the Post Pandemic World
- Why We Need Employee Friendly Laws and HR Policies in the Post Pandemic World
- What is Second Chance Hiring and Why It Matters in the Present Times of Distress?
- Pandemic and Lay off: Putting People over Business
- The Hype and Realities of Networking in an Interconnected World and Leveraging Them
- What is Blind Hiring and How it Promotes Diversity and Inclusivity Efforts in Corporates
- What is Great Resignation? What can be done to Address the Mass Attrition Trend
- Why are American Millennials Burning Out and Quitting Jobs in Record Numbers?
- As American Corporates Order Employees Back to Office, What Are the HR Challenges?
- What Is Quiet Quitting, Why It Matters, And How Is It Impacting American Corporates?
- As Tech Firms Layoff Thousands, Is the Party Over and What It Means For Indian IT
- After Quiet Quitting Comes Quiet Hiring! What It Is, And Why It Would Be Trending In 2023!
- Quiet Hiring vs. Traditional Hiring: A Comparative Analysis and What Works When and Why
- White Collar American Workers are burning out More Than Ever! Here are the Reasons Why!
- Who are Boomerang Employees?
- Why is Everyone Talking About Artificial Intelligence Suddenly and How it Matters to All of Us?
- Heres Why Businesses in the United States are Finding it Hard to Hire Workers
- HR Challenge: Both Ageism and Youngism are Forms of Discrimination at the Workplace!