Expatriates are subject to international taxation and often have both domestic and host country tax liabilities. Hence, the HR department has to work out tax equalisation policies to reduce botheration to the employees.
Host of other activities to be carried out by HR includes:
Predeparture training in terms of cross-cultural issues and etiquettes
Providing immigration and travel details
Providing housing, medical care and schooling information for kids.
Making the expatriate psychologically comfortable while relocating them is also an important function of HR.
3 . More involvement in employees’ personal lives:
High degree of personal involvement in the employees’ personal lives is necessary for the selection, training, placement and effective management of both PCN and TCN employees.
The role of HR department is to make the expatriate employees understand their housing, healthcare, work culture, compensation and all other matters so that they feel comfortable at the new place.
Many MNCs have their own international HR service section to take care of such type of activities. Whereas, in the domestic scenario, the HR department’s involvement with an employee’s family is limited to only providing employee insurance programs or at the time of transfer, providing assistance in relocating the employee.
4. Emphasis changes as the workplace mix of expatriates and locals varies:
As international operations of companies gain experience, the emphasis put on the various human resource activities change.
For instance, with time, as the need for expatriates from the parent nation decreases, the resources previously allocated to areas like expatriate taxation, relocation and orientation are switched to activities like local staff selection and training programs.
The consequences of failure in international operations are more severe than the domestic business. The failure of an expatriate in terms of performance or his premature return from the assignment costs the company heavily and has tremendous impact over the market share and international customer relationship.
Another major risk factor that has emerged in the recent past is the threat of terrorism after september 11 tragedy in US. Most MNCs now consider this factor when deciding on international meetings and assignments more proactively to minimise the risk.
The influence of the external factors such as different types of government, state of economy and business policies and practices of various host countries are quite high and therefore pose a great challenge for HR professionals to manage.
Depending upon the attitude of the govt. towards international firms in their country, the HR policies of the MNC can be changed. In terms of state of the economy, there are variations, like labour is more expensive and well organised in developed countries than in developing countries.
These factors demand that the HR manager should converge himself with the local business dynamics, code of conduct and business values.