Staffing Policies & Approaches in IHRM

 

Staffing Policies and Approaches in International Human Resource Management

In International Human Resource Management (IHRM), staffing policies refer to the strategies and approaches that businesses use to recruit, select, and manage employees for their international operations. Staffing policies are critical to a company's international expansion success because they ensure that the right employees are placed in the right roles in foreign locations. Here are some common IHRM staffing policies:

• ·       Ethnocentric Staffing Policy
• ·       Polycentric Staffing Policy
• ·       Geocentric Staffing policy

Ethnocentric Staffing Policy

Home-country nationals are designated as top-ranking employees in global operations under the ethnocentric policy or approach to staffing. Some executive positions at consumer electronics companies, such as Sony and Samsung, can, for example, assign Japanese and Korean nationals to offices in other countries. The main advantage of the ethnocentric staffing approach is that it enables the organization to ensure that people in top corporate positions are familiar with the firm's operations and strategies. This is especially true in host countries or overseas locations where there are insufficient qualified workers to fill top positions in the business organization.

Ethnocentric staffing policies can be used to ensure that the overall culture of a multinational organization is unified rather than diverse. However, these policies do not fully support the company's acquisition of local knowledge. Expatriate managers of overseas operations may struggle to gain a thorough understanding of the local workforce or business environment. This issue may arise as a result of knowledge sharing among local workers.

Polycentric Staffing Policy

Polycentric staffing policies or approaches typically assign home-country workers to top positions in central offices or headquarters and local workers to other positions in overseas operations. For example, Americans are in key positions at its headquarters as well as local managers in some of its facilities outside the United States. The polycentric policy has the advantage of facilitating organizational learning about local markets. This staffing strategy also gives locals more opportunities to advance in their careers through promotion. However, one disadvantage of polycentric staffing policies is that they may result in knowledge and performance gaps between overseas and home-country managers.

Geocentric Staffing Policy

Regardless of the worker's place of origin, the geocentric staffing model assigns employment vacancies to people who are most fit for the positions. Geocentric staffing rules are used in restaurants or cafés by McDonald's, Hard Rock Café, Starbucks, and many other food-service organizations. Furthermore, Disney's theme parks use this staffing approach to maximize favorable interactions between personnel and guests.

The geocentric staffing policy has the advantage of being adaptable. It can broaden the firm's cultural understanding of various markets and countries. However, one disadvantage of the geocentric approach to staffing is the difficulty of filling job openings when qualified local workers are unavailable. In such cases, immigration policies, the costs of relocating expatriate workers, and diversity management put pressure on human resource management.

Impact on Staffing Policies

In International Human Resource Management (IHRM), the choice of staffing policy can have a significant impact on various aspects of an organization's operations and outcomes. Here are some of the most significant effects of the IHRM staffing policy:

Culture in the Workplace: The organizational culture of a company's international operations can be influenced by its staffing policy. Ethnocentric staffing, in which employees from the home country are primarily hired, can result in the replication of a strong home country culture in foreign operations. Geocentric staffing, on the other hand, can foster a diverse and inclusive organizational culture that values global perspectives. Regional organizational cultures may emerge as a result of regional staffing. Staffing policies can thus be chosen.

Employee behavior, communication, and performance in international operations can all be influenced by the staffing policy that is chosen.

Local Market Adaptation: A company's ability to adapt to local markets can be influenced by its staffing policy. Polycentric staffing, which focuses on hiring locals, may result in better adaptation to local market conditions, customer preferences, and business practices. Employees with local knowledge and language skills can more effectively navigate the local market, understand customer needs, and develop relationships with local stakeholders. However, ethnocentric staffing, which relies on employees from the home country, may face difficulties in adapting to local markets, potentially leading to a loss of market share and competitiveness. Geocentric staffing, which focuses on hiring the best talent from around the world, can help.

can also allow for effective market adaptation by leveraging diverse skills and expertise.

Employee Motivation and Retention: Staffing policies in international operations can have an impact on employee motivation and retention. Employees who feel valued, understood, and aligned with the organizational culture are more motivated and committed to their work. Ethnocentric hiring practices may make it difficult to motivate local employees who may feel excluded or marginalized, resulting in lower job satisfaction and retention. Polycentric staffing may result in higher levels of motivation and loyalty because employees feel a sense of ownership and belonging. 

Geocentric staffing, which focuses on talent from various countries, can result in a motivated and diverse workforce, but it may face challenges in retaining employees who must relocate frequently.

Communication and coordination: Staffing policies can have an impact on coordination and communication both within and across international operations. Due to language, cultural, and communication barriers, ethnocentric staffing may result in communication challenges between employees from different countries. Because of the need to manage multiple local cultures and practices, polycentric staffing may face coordination challenges. While geocentric staffing promotes diversity, it may also necessitate effective communication strategies to manage employees from various countries with diverse backgrounds. Geocentric staffing can help with coordination within a region, but it can be difficult to coordinate activities across multiple regions. 

To address the impact of staffing policy on these areas, effective communication and coordination mechanisms must be in place.

Compliance with the law and regulations: In international operations, staffing policy can have an impact on legal and regulatory compliance. Different countries have different labor laws, immigration regulations, and hiring practices that must be followed. Compliance with local labor laws and immigration regulations may pose difficulties for ethnocentric staffing, resulting in legal and regulatory risks. Polycentric staffing may mitigate some of these risks by hiring local employees who are already familiar with local regulations. While geocentric staffing provides access to global talent, it may also necessitate careful compliance management to ensure compliance with local laws and regulations. Geocentric staffing may face varying legal and regulatory requirements that must be addressed across different regions.

To address the impact of staffing policy on these areas, effective communication and coordination mechanisms must be in place.

Conclusion

Finally, the choice of IHRM staffing policy has a significant impact on various aspects of a company's operations in international markets, such as organizational culture, local market adaptation, and employee satisfaction.

Companies may use a combination of staffing policies depending on their business objectives, local market conditions, and organizational culture. Staffing policies in IHRM should be aligned with the company's overall strategic goals, local market requirements, and the need for global talent management. Proper international assignment planning, recruitment, selection, and development of employees are critical to the success of a company's international operations.

References

Whitehead, S. (2015) Staffing Policy & HRM Issues in International Business - Panmore Institute, Panmore Institute. Available at: https://panmore.com/staffing-policy-hrm-issues-in-international-business.

Bika, N. (2018) International Recruitment Policy, Recruiting Resources: How to Recruit and Hire Better. Available at: https://resources.workable.com/international-recruitment-policy.