Global Human Resource Planning

GLOBAL HUMAN RESOURCE PLANNING

Human resource planning provides the essential link between MNC strategy and people- who make strategy work- including outsourced workers. It is an integral part of strategic mgmt process- both in terms of strategy formulation and strategy implementation. It includes scanning the environment for opportunities and threats and taking an inventory assessment of the orgs’ human capability. Global HR planning should be responsive to both the shortterm and long-term needs and plans of the org and it’s worldwide operations. Lack of HR planning for linking HR practices to the strategic goals and objectives of the firm make the org vulnerable to the fads and popular practices of the day, which typically address business goals and needs in only a superficial, noncustomized way. Before staffing and other detailed action plans are made, there should be thoughtful consideration, as part of careful global HR planning, about the nature of present and future work demand and potentially viable sources of labour supply – wherever they may be. Imp considerations for HR planning function will include the following:  Determination of work demand and labour supply based on strategic objectives  External environmental scanning  Work organization and job design  Analysis of imp sources of labour supply  Long-term HR planning issues – forecasting labour supply trends and opportunities, building global capability and succession planning strategies WORK DEMAND AND LABOUR SUPPLY After determining int’l business strategies, specific cost-effective implementation or action plans must be considered. Global HR planning plays a central role in this implementation phase in determining both what kinds of human work and tasks need to be carried out and who will do this work. The ‘what’ component in this HR involvement may be considered part of work demand; it leads directly to decisions regarding work organization and design,

such as breaking down larger business performance plans and goals into specific coordinated and integrated tasks, responsibilities and jobs for people to perform. The ‘who’ component of global HR planning for strategy implementation comprises of diff kinds of decisions related to supply of appropriate human resources or labour with specific skills to address the identified work demand. In effective global HR planning there should be a logical flow from strategy to work demand to labour supply, with each step consistent with and responsive to the previous step. This will need the help of scanning and assessment of external environment, which can greatly influence those work demand and labour supply decisions.

EXTERNAL ENVIRONMENTAL SCANNING Business leaders must today continuously scan the environment and maintain awareness of changing and developing challenges- presented by threats and opportunities- to successfully carrying out business plans and competing in our global marketplace. With its close interface with strategic planning, HR planning personnel should also continuously scan the env for the array of complex, interrelated challenges that present themselves. The major overarching current trends, influences and developments like globalization, contingent work arrangement, technological advancements, changing demographics, and national culture must be monitored regularly in terms of their implications for new work demand and the ability to meet that demand through human labour or automation. -labour market conditions and characteristics: the opportunity presented by increased demand for goods due to globalization, has led to sourcing of manufacturing operations to countries like China, Vietnam, Romania, Malaysia, India, Brazil, Portugal, Mexico and Thailand representing attractive labour markets where labour supply if plentiful, of an adequate skill level and relatively inexpensive compared with labour supply in more developed countries. In fact, some countries with a relatively low-cost labour force also hold a comparative advantage in terms of technical skills, such as India and the countries of Central and Eastern Europe. Inevitably, market forces of supply

and demand come into play in global HR planning. As more firms source their work to a foreign country with an attractive, low-cost labour force, there is increasing competition for a limited labour supply, which then eventually drives up the cost of labour for the MNC. Within the increasing globalization movement HR planning should include a careful and ongoing scanning of various national labour markets to identify particular opportunities or potential problems related to the supply of labour to support ongoing MNC strategic objectives. Scanning of global labour markets might consider current levels of adult literacy and technical skills among the present labour force. For eg, the United Kingdom is significantly behind France and Germany in the number and proportion of the national labour force achieving craft-level qualifications in engineering and technology, suggesting that plans for expanding heavy R&D and high-tech business activities into the European Union might favour Germany or France where the global labour force would be more capable of supporting these more demanding and knowledge-intensive business activities. -Governments and other labour interest organizations: inevitable threats to the rapid expansion of globalization fostered by the low cost of labour in developing countries arise both from home as well as abroad in those host countries where the sourced operations are located. A company in its home country can feel strong social pressure in terms of patriotism and national solidarity to not move jobs to other countries, which would result in the immediate loss of jobs and increase in national unemployment. Governments or influential unions supported by those govts can also impede or completely prohibit certain kinds of work, such as those related to key industries and national security, from being sourced to other countries. For optimal FDI spillover of knowledge and skills, host country govt can require that MNCs staff their local operations with targeted levels of host country supervisors and managers, or place joint venture requirements to encourage sharing of expertise. Govts in host country low-cost labour markets are becoming very competitive in providing MNCs with attractive incentives in the form of tax breaks and exemptions from certain costly labour regulations in exchange for foreign direct investment. Yet they can also begin to extract increasing costs for the access to and use of its labour supply in the form of higher taxed and the passage and enforcement of more costly and restrictive labour laws.

-global competition : companies compete both at home and abroad to attract and retain customers by attempting to consistently deliver high-quality products and services at lower costs. Orgs also compete for human talent itself that drives competitive advantage. It requires ability to attract and deploy a motivated, innovative, team-oriented, cooperative, responsive, flexible, and competent workforce at all levels. -Cross-National cooperation and conflict: several diff regional and multinational trade treaties and agreements among various countries have imp HR planning implications related to business conducted with and within participating countries. For eg joint venture formation and appropriate staffing to promote treaty country partnerships, standardization, and harmonization of acceptable HR practices, formation and staffing of regional headquarters and HR functions corresponding to treaty member geographic arrangements, movement of workforce operations across participating national borders to take advantage of operational efficiencies, and appropriate cross-cultural awareness skill development for those involved. In addition, managers and decision makers must be aware of important current and changing guidelines and even detailed requirements that these multiple-country agreements can have related to professional licensing, union representation, benefits, training, work standards, and worker rights. Apart from global cooperation, serious forms of conflict within and between countries, like local or global terrorism, ongoing trade wars and skirmishes bet countries can present obstacles for foreign business development in those countries, including those associated with human resource staffing and utilization.

JOB DESIGN FOR MEETING GLOBAL STRATEGY WORK DEMAND Once work demand that directly addresses the implementation of co strategy and business objectives has been identified, decisions are needed regarding work organization and design, involving breaking down larger business performance plans and goals into specific coordinated and integrated tasks, responsibilities and jobs for people to perform. These are studied in detail through a process called job analysis. The job analysis process forms the basis upon which key employment decisions related to recruitment, selection,

training, performance appraisal and compensation are made. Major methods of job analysis include incumbent employee observation, interviews, questionnaires, or keeping a diary or log; when jobs are new, expert input by experienced managers or other professionals often can be useful. It leads to job description, listing duties and responsibilities, working conditions, supervision or reporting arrangements, and knowledge and skills required to perform the job effectively. This document is reviewed regularly and discussed with emps and revised if necessary to ensure that work performance expectations are clearly understood. Some major factors influencing global work design are: -Cultural Adaptation Considerations in Work Design: general tasks and responsibilities for similar jobs can be identified from central corporate headquarters, their specific working conditions and arrangements in their foreign location should be carefully examined to ensure a good fit with local cultural norms and expectations. -Regulatory influence on Work Design: diff govts might have specific restrictions about how work is organized and carried out- like for work and breaks for rest and even prayer time (such as in some Islamic countries); how many hours a day a business can remain open. Govt might specify how many hours a week emps can work and give very tight restrictions on the availability of overtime or emp safety. -Labour Market Skill Levels: depending upon the levels of skills and knowledge available in the labour force, jobs can be designed with more or less technical complexity or requiring more or less careful supervision. -Available Technology & Infrastructure: work design should take into account such factors as the availability and development of technology in the local area of business operations as well as the surrounding infrastructure supporting business. With new technologies, human work is constantly being redesigned around tasks that are now automated, requiring higher employee skills and resulting in a worldwide drop in manufacturing jobs due to increased efficiencies and automation. -Personal Accommodation Needs – along with skill and cultural requirements, individual emps may have unique circumstances that might influence the

design of their work. For eg, long commutes could have fewer work days or work may be designed on a “telework” basis. -Alternate forms of International Work Arrangements: besides traditional fullworkday arrangements, alternate forms of work arrangements are available like extensive travel, short-term foreign assignments, expatriate assignments, inpatriate assignments, virtual expatriate assignments, and multinational virtual teams. -Extensive Travel: some kinds of regional sales and mgmt jobs require constant travel to various business locations in a country or economic region, often part of an early and development phase of business development and might eventually result, as business becomes more established and predictable, in more permanent assignments at the worksites to where the previous travel had been targeted. -Short-term foreign assignments: with increasing priorities for cost savings and localization of talent, short-term foreign work assignments, or sometimes called secondments, ranging from a few months to a year are on the rise. -Expatriate Assignments: the need for expatriate services has been primarily based on the requirement to fill a critical skills gap by transferring operating knowledge and techniques and general managerial skills held by the expatriate to the distant subsidiary, thereby allowing the MNC to more directly provide coordination and controls to ensure that the foreign subsidiary is performing up to MNC expectations and consistent with MNC strategy. -Inpatriate Assignments: a work assignment featuring the transfer of foreign managers from their host country operation locations to global or regional headquarters on a semipermanent or permanent basis is known as ‘inpatriation’. Major purpose is to increase the foreign inpatriate managers’ understanding of company strategy, culture, and critical operations and practices. Such assignments are more appropriate for organizations of intermediate and advanced levels of internationalization whose host country emps have significant experience with the co and that possess adequate capital resources to support sucha long-term human resource investment.

-Global Virtual Teams: competitive trend of leaner and flatter orgs using best orgn’l talent available in the MNC, irrespective of the location, combined with new information and communications technologies leading to the formation of partial work arrangements is known as global or multinational virtual teams. Their work has three design components in common: (1) responsible for formulating and/or implementing decisions that are imp to their org’s global strategy. (2) use a substantial amount of communications technology to support group member interactions, and (3) comprise members working and living in diff countries. Most are knowledge-based teams formed to improve orgn’l processes, develop new products, or satisfy complex customer problems.

SOURCES OF GLOBAL LABOUR SUPPLY FOR MEETING WORK DEMAND Various sources of labour can be considered to fill the desired work demand. These may be: -Regular or Standard Employees : better known as “full-time” or “permanent” emps, these terms have been dropped in the new global scenario, largely due to the presence of other emp groups like temporary emps. Regular emps are recipients of full benefits typically by the org,and considered the core of the orgn’s employment picture. As practiced by large Japanese firms for many, years, the non-core emps serve as a protective buffer for their core emp counterparts, and are the first ones to lose their jobs. -Parent-Country Nationals(PCNs) : are citizens, legal residents of the “home country” of the parent company or the country where the primary co headquarters is located. Much of the PCN, especially managerial or executive level within the MNC, have a great understanding of the company culture, priorities, and strategy and what it takes to be successful. Also experienced PCN is likely well networked within the MNC and has a good understanding of the key decision makers and power brokers within the org. They could possible lack in adjusting to a foreign business location and practices -Host-Country Nationals (HCNs) : are citizens or residents of a country that “hosts” or provides local property and facilities, for MNC operations abroad. As

a source, they can come from the ranks of existing MNC emps in the host country operation or also from outside the firm. Particular strengths include familiarity with the local culture, common business practices, and economic conditions. May least initially lack a clear understanding of the predominant national and orgn’l culture or MNC headquarters or its business priorities, accepted and expected business practices and strategic mind-set. -Third-Country Nationals (TCNs): emps could also be hired from residents of different third country apart form the parent or host country. TCNs represent a useful alternative labour source for filling work demand there the focus is on obtaining the most cost-effective labour, regardless of what country the emp comes from. This staffing approach often follows an overall regiocentric strategy, where regional emps are assigned as TCNs to nearby host country operations. Significant disadvantages of TCNs include their possible lack of understanding of the local HCN culture and difficulties with local public sentiment and governmental obstruction where TCNs are perceived as taking away jobs from local HCNs. They might also have language difficulty in communicating effectively with PCNs and MNC headquarters. -Contingent or Non-Standard Workforce : are those who work on a flexible basis as needed or contingent to an org’s work demand and have neither an explicit nor implicit contract for continuing employment. These form a rapidly growing source of labour for filling global work demand and serving to increase overall world employment, not just to fill in for layoffs and lost jobs. An international study estimated an average of approximately 25% of the world labour force is in “casual” non-standard or contingent employment.

HR PLANNING FOR LONG-TERM Along with env scanning and work demand planning, HR planning should also study external trends and conditions pertinent to the firm’s long-term survival and competitiveness. -Country Labour Forecasting : environmental scanning should consider such longer-range factors as national birth rate statistics, health conditions and mortality, the nature and quality of educational systems within a country and

changing demographic trends in workforce participation to gain a clearer picture of the nature of the global labour force available for supplying longterm future work demand

-HR Planning for Global Capability: global HR Planning should consider what an org wants to become in the long run – including orng’l core competencies and culture and w/f alignment of shared mind-set-and plan its HR activities and policies accordingly. International firms, large and small, should also carefully plan their selection, training, perf mgmt and remuneration practices to support the acquisition of common core priorities and competencies that promote alignment and coordination across national boundaries.

-Global Succession Planning: concerns the selection of talented emps to replace senior managers who leave the MNC because of retirement, reassignment, or for other reasons. Effective succession planning emphasizes minimizing disruption and confusion arising from such leadership changes, with a view to implementing company strategy and achieving orng’l goals in a smooth and continuous manner. Building on their long-range HR Planning for developing desired capability and global leadership talent throughout the org, MNCs should engage in careful global succession planning to reduce change and uncertainty and ensure availability of senior executive leadership talent for future co guidance.