International HRM: Challenges and Strategies for Global Companies

This essay delves into the multifaceted challenges and strategic considerations within International Human Resource Management (IHRM) in a rapidly evolving global context. It examines the pressures on businesses to be innovative, efficient, and effective. The essay analyzes the shift in Foreign Direct Investment (FDI) and the rise of emerging economies, particularly China's impact on global business. It presents case studies of two companies, Apple and Infosys, to illustrate practical IHRM issues. The essay explores crucial aspects such as adapting to new labor laws, preserving cultural diversity, providing effective training and development, and managing benefits and compensation in a globalized environment. It also addresses the challenges of employee and family adjustment, conflict resolution, and attrition. The essay emphasizes the need for companies to embrace global HRM, focusing on people, processes, and technology, and highlights the importance of cultural intelligence and outsourcing in achieving success. The analysis underscores the importance of these elements for global business success.

International Human Resource management

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In today’s globalized world, international HRM has to deal with multiple issues and there is
constant pressure for the companies to become more and more innovative efficient and effective.
One of the changes that are primarily seen in the context of international business is that initially
the FDI flows were in mainly in the developed countries but lately the shift has been towards
several other places like EU accession countries. Even the countries like India and China are also
newer places for inward FDI. Lately it is witnessed that there is a mammoth global shift towards
East Asia because of the growth rates. There has been seen a very quick growth in the Chinese
economy too. The impact of growth rate in China has posed serious implications on the business.
There are two companies that are studied in context of understanding international HRM from a
practical point of view. The first company is “Apple” which is an American company and has its
manufacturing units in Asia owing to availability of cheap labour. The next company that is
studied is Infosys, a company of Indian origin. Upgrading to newer HR system is very essential
these days. It is relevant in today’s time more so because more companies are becoming global
and it is essential that the HR system also makes use of latest technologies that are available in
order to handle the global pressures (Capterra Inc., 2019).
There are several developments at both economic, environment and political front in various
developed and developing countries that have shown great impact in IHRM research. In case of
Apple Company also the Chinese Government is focusing more attention towards its
environment and health issues of its employees because of which the company is under
tremendous pressure to either change its location or work towards the health issues of the local
people working there. Apart from this, recruitments of upcoming expatriates have also become
challenging because of terrorism in some Asian countries. The only option left is that the locals
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employed at high positions in these operations can be contacted. Another trend that is seen in the
contemporary times in context of IHRM is that there is a rising interest in the self-initiated
international assignments which the people have kick started for themselves with no
organizational support. The main effect of the rise of self-initiated international assignments is
that the MNC’s can use these individuals for their top positions at a lesser expenditure than
expatriates (Bradley, 2018).
When the businesses expand globally or recruit individuals from varied geographic backgrounds,
the businesses have to become accustomed with new labor laws and tax liabilities. To illustrate,
running an organization in Europe would need the business to pay value added tax. Recruiting
individuals who may be non – naturalized US citizens may need HR to pay additional heed to the
requirements. The HR may have to apply for work visa and apprise about the data to the
government. These laws are generally very difficult to understand; therefore, it can be as issue of
concern for the not so well aware HR manager to implement the same. The only solution for this
is that the HR department be well accustomed with the legal requirements of the firm’s
operations in the international market. This would help in lessening the complications and the
probability of getting into legal hassle. There is an upwards trend in the businesses which are
operating in the international market. It implies that there are diverse laws, culture and rules that
have to be paid heed to when formulating HR policies. In case of Apple also the HR department
has to understand the concerns in context of the local employees of China working in their
manufacturing concerns (Scullion, et al., 2007).
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Preserving the cultural diversity and training and development as per global standards are the key
feature in IHRM. Collaborating with individuals from diverse locations or from diverse cultural
backgrounds means adjusting to the organization’s work methods to new thoughts, different
ways of expression and unknown social practices. To illustrate the point, if an employee is
employed from England, then that individual may have unique ideas about how to do a particular
kind of work with respect to the experiences of his home country. Thereby being accepting to
fresher working styles and cultural dissimilarities is a great feature of cultural diversity in IHR.
Another key issue in the context of IHRM is training and development. The multinational
companies conduct in house training programs to impart knowledge and skills to the workforce
required by them to work globally. The HR department dealing in the outside world provides
language classes as relevant to their organizations in their global markets. In case of Apple
Company also the company is known to encourage teams on self-learning whereas some
employees who are recruited from other companies have the inclination towards getting proper
training. Therefore, the company should impart additional training to its employees by arranging
several networking events for them. The department also has to permit the employees to attend
conferences, global training seminars and other specific skill based programs. These practices
make sure that the employees sharpen their required skills in the global market (Francina, 2018).
Times are moving at a rapid pace and technology keeps on altering now and then because of
globalization. Keeping abreast with the updated technology and training people alongside is a
very challenging task for the HR department. The achievement of technological change is
dependent upon how effectively the HR department handles the change and manages people
issues. Benefits and compensation are of the most essential component of HR strategy. In case of
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International HR, it becomes all the more important (UCOP, 2015). It is relevant because it helps
in providing work life balance to the employees. The main rational for providing work life
balance is that employees can enhance both their personal as well as professional lives. There are
several MNC’s that pay due heed to executing such practices. Even by law in several parts of the
world it is compulsory to follow such programs like flexible working time, paternity leave,
extended holidays and on-site childcare. Being able to implement such programs at local level is
a very challenging and reward full task. The rising markets across the globe require a system that
encourages employee engagement, reworking on sexual harassment guidance and increasing
corporate wellness elucidations. It also requires implementing AI to develop HR processes. In
today’s globalized environment, if companies want to have a prosperous, engaged and
committed workforce the companies should recruit, hire and retain talent. In this age there is
surplus talent available everywhere. Thereby the companies have to increase spending on HR
solutions; this will promote a range of HR innovations to reach higher heights in 2019 and ahead
(Moran, 2018).
Infosys is a company of Indian origin which provides consultancy services across various
countries of the world. In order to be innovative and live up to the changing times the company
has deployed an enhanced version of human resource development and payroll system. The
company deployed oracle’s people soft capital management and incorporated it with the existing
payroll scheme. It will also reduce the payroll execution time from just 10 hours to 22 minutes. It
also helps in providing services like Absence management, Administer training, health and
safety and other customized modules to the council of Europe. HR has evolved from the earlier
times to times of now, the times are of quick information and using the latest technology, this
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renewal of HR Activities would help in more efficient recruitments, training, and payroll system
across the world (Infosys Limited, 2016).
In context of IHRM, there is an important challenge of employee and family adjustment. There
has to be various arrangements that have to be looked upon like housing arrangements, medical
and health care, pay packages, assisting in looking for education for their children, local
regulation and tax policies. It is essential that the employee with adequate knowledge, skill,
attitude and ability is chosen to manage international communication. HR department has to
assist the employees in learning the foreign language. They also have to be well equipped in
dealing with a very difficult task of handling varied workforce dealing with different age groups,
religious beliefs, income, parental backgrounds and different geographical locations. In addition,
they also have to deal with several different viewpoints, lifestyles. In order to do justice with
these challenging tasks of binding the different cultures together, the HR employees should have
excellent communication skills, flexibility, alertness, and positive approach. Because of
globalization the employees have the leverage of working anywhere in the world. The world
provides several opportunities to the employees; therefore, retaining the best talent has become a
very difficult task. It is essential to have pleasant relations with them, providing remarkable work
culture and paying more than the competitors is of paramount importance. Another important
issue is that of conflict that is very much prevalent in context of both HR and IHR. It is the
responsibility of the HR department to tactfully handle and resolve conflicts that arise. The team
should be able to understand and communicate in a convincing manner to avoid future conflicts.
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Attrition is also a global challenge that is looming over MNC’s. Several IT companies like
Microsoft have seen extraordinary attrition in the recent times. Considering the brand image of
such companies, attrition can badly hamper the goodwill of the companies. This is the reason
that all the big companies take attrition very seriously and conduct exit interviews of their
employees.
In order to be more efficient in the global world the companies have to be more innovative. The
concept of IHRM is now more like Global HRM, apart from managing expatriates, cross cultural
employees, expertise in international IHRM the most recent role is facilitating capability
development on global level. There has to be effective knowledge management. To achieve this
Global companies has to focus on three parameters; people, process and technology. These
companies should also have tie ups with local HR service providers to go into the foreign market
to get a hold of the cultural complications and to gain cost advantage. Outsourcing is another
mechanism that can be used in the global organizations. Its benefits are lesser costs, more service
quality by greater economies of scale, more accountability and expertise. The same can be
understood in context of the Apple as discussed in the subsequent paragraphs. Off shoring can
also be undertaken in cases where similar job in some other location can be done economically.
There is an increasing significance of international mobility in the framework of rising global
activities of the organization. The concept of cultural intelligence has also become popular where
it plays the role of the intermediary between language skills and goal to work abroad. This
concept needs to be applied in case of recruitments and while mentoring expatriate (IESE
School, 2015).
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Apple Company offers diversity and equal employment opportunities because of which it is
successful in pulling talented workforce from different parts of the world. Apple also provides
very competitive pay packages to its employees. The company provides insurance cover,
employee stock purchase program, product discount and investment and saving plan. Employees
are also provided with regular stocks for their worth to the company (Edwards, 2016).
Employees are also given confidence to work from one industry to another which means they
can shift from music industry to computer to Smartphone industry. Apple also provides
internship program and the interns who do not get employment in their company get employed in
other company immediately because of the real learning experience that Apple provides. Apple
has a very distinctive training approach. It is mandatory for the teams to keep doing new things
all the time, the teams always compete to provide new developments which are different from
the earlier projects. When the work gets finished, the best team is selected. Employees at Apple
learn on their own through free thinking and innovation. The recruitment process at Apple is
more focused towards cultural fit and not on the basis of skills and experience of the employees.
This strategy can block talented employees to apply for the positions thereby recruitment
procedure should be more welcoming. Apple Company’s corporate culture does not encourage
morale of employees therefore to manage the diverse backgrounds employees it is essential that
activities of employee engagement are undertaken by the company. The Apple employees also
complain of long hours and employee discrimination. HR should have policies where the
employee’s satisfaction level is addressed. The dual career couple is a fact of the 21st century.
With the rise of dual career couples’ success there is a rise of required uprooting activated by
succession planning and logistics (Kobie, 2017). Apple Company needs to be more thoughtful in
case of relation as; some of the locations where the company has its manufacturing units are very
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challenging like Brazil, Russian Federation, India and China. The relocation is essential also
because US does not have the capacity in terms of number that China has. But lately Apple is
facing great troubles in China because the country is paying attention towards its air, water and
soil pollution. If the Apple Company shifts somewhere else, there will be additional costs at both
old and new locations. The amalgamation of physical perfection and less cost is difficult to attain
in USA. Thereby the company should start a competent program where the suppliers and
manufacturers are paid more for their welfare and transparency and policies are framed by the
HR department towards the health of the employees of those concerns. Apple Company should
also impart more training to the staff recruited from around the world (Gaudiano & Hunt, 2016).
Thereby in order to be successful in today’s times it is important that the companies of today all
across the world address all the issues of managing employees from diverse backgrounds,
manage couple’s dual careers, look into expatriates’ livability in other countries and understand
the changing situations of the manufacturing units in the Asian and other developing countries. It
is also essential that the companies implement the latest HR software in their company to address
the issues timely and efficiently. The HR managers should strategically develop policies which
help the company in moving into far off territories with ease and efficiency (Ting-Fang, 2018).
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References
Bradley, J. (2018) International HR Issues.
Capterra Inc. (2019) Human Resource Software: Find the best HR Software for your business.
Compare product reviews and features, and learn from our HR Software Research. [Online]
Available at: https://www.capterra.com/human-resource-software/
Edwards, J. (2016) Apple employees break their vow of secrecy to describe the best - and worst -
things about working for Apple.
Francina, M. (2018) A Study on Trends and Challenges in Global HRM. International Journal of
Engineering Technology Science and Research, 5(1), pp. 1-7.
Gaudiano, P. & Hunt, E. (2016) Apple's Diversity Report Reveals Problems, Risks And
Opportunities Facing All Corporations.
IESE School (2015) Why You Need Cultural Intelligence (And How To Develop It).
Infosys Limited (2016) Infosys Revamps Council of Europe Human Resource System- Multi-
step upgrade will enable modern self-service, better integration, improved security and
productivity.
Kobie, N. (2017) Apple is losing staff by the dozen. But that's not a problem.
Moran, C. (2018) HR Trends: 5 Major Human Resource Innovations in 2019.
Scullion, H., Collings, D. & Gunnigle, P. (2007) International Human Resource Management in
the 21st Century: Emerging Themes and Contemporary Debates. Human Resource Management
Journal, 17(4), pp. 309 - 319.
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Ting-Fang, C. (2018) Apple suppliers face manufacturing woes in China.
UCOP (2015) HR Strategic Plan 2015-2019.
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