Managing HR Globally, Strategically Managing the HR

1. Managing HR Globally,
Strategically Managing the HR
Functions
Rida Zaman

2. What Is International Human Resource
Management?
International Human Resource Management is all
about the regular HRM activities but at the
international level. IHRM helps an organization
manage its objectives without sacrificing its
competitive advantage in an international
scenario.

3. The Idea Behind GHRM?
The idea behind global human resource management is much similar to
regular HRM. An IHRM professional is typically responsible for handling
activities like hiring new talents, onboarding and training them,
managing appraisals to expedite global HRM operations.
Multi-National Companies (MNCs) have an active IHRM team that
manages the requirements of their universal employees at an
international level.

4. The Types of Employees That IHRM Departments Handle?

5. The Employees Residing In Your Home
Country
This means the employees who are living in the home country of an
organization where its headquarters are situated. For instance, Wal-
Mart is a US-based company and the citizens of the US are its home
country employees.

6. The Employees Residing In The Host Country
By this, we mean the employees of that very country where an MNC’s
subsidiary is located. For instance, Wal-Mart has 2000+ stores in
Mexico. Hence, the employees working in these stores will be the host
country employees.

7. Any Third-country Employee
Employees who are neither from the home country nor from the host
country have been hired additionally, fall under this category. For
example, an Australian employee is working in the corporate
headquarters of Wal-Mart, in the US. This person is a third-country
employee of Wal-Mart.

8. HRM Vs. IHRM
an In-depth Comparison of HRM
and IHRM

9. HRM Vs. IHRM
an In-depth Comparison of HRM and IHRM
• The most basic difference between IHRM and domestic HRM is that IHRM takes into account the
HRM operations of two or more countries while the focus of HRM remains strictly on home-
country operations.
• As far as a complications are concerned, domestic HRM operations are much less complicated
considering the fact that only home-country activities are involved here. On the contrary,
International Human Resource Management is highly complicated with the involvement of
several external and institutional factors.
• If you focus on the legal aspects, you’ll see that domestic HRM typically focuses on the
legislations of your home country. However, for IHRM, various international legislations that are
contextual, are also of prime importance.
• When we’re talking about domestic HRM, there are fewer risks involved as the scope of
adaptation is much greater. Alternatively, for IHRM, the adaptation possibilities are limited since
multiple cultures are involved. In that case, the risks involved are much higher.

10. What Are the Functions of Global
Human Resource Management?

11. International recruitment and onboarding
Recruitment and onboarding is the most fundamental part of any HR
professional’s responsibility. When it comes to IHRM, the same
responsibilities are there but in an international context. An IHRM
professional needs to develop job descriptions for the international
markets, interact with candidates to select suitable individuals from a
huge talent pool, create offers, and negotiate compensations if
required. Executing all these tasks in the international context is pretty
challenging considering IHRM challenges like language and cultural
differences, varying educational systems, currency differences, and so
on.

12. International payroll management
One of the most significant functions of global human resource
management is managing multi-currency payrolls. When
you’re recruiting an international employee, it is essential that you pay
them in their local currency. An MNC with multiple subsidiaries
worldwide, it is a necessity to manage multi-currency payrolls. Also
taking care of the employees’ social contributions like social security in
the US, CPF in Singapore, are also part of an IHRM professional’s job.

13. On-the-job training
Training a new employee is a mandatory requirement for organizations,
no matter how skilled the new candidate is. In the case of IHRM too,
on-the-job training becomes a critical function. The types or methods
of training may vary from organization to organization. However, it is
part of an HR professional’s job to ensure that all employee types are
receiving necessary training after their joining.
In today’s scenario where most organizations have transformed
digitally, conducting online training through courses, webinars, etc. is
no longer difficult. However, it is part of an IHRM professional’s job to
streamline such pieces of training and execute them in a structural
manner.

14. Managing benefits and compensations
When an employee joins your organization, they’re subject to certain
benefits, irrespective of their home country or host country employees.
These benefits are motivation boosters for employees and helping
them avail those perks is one of the fundamental functions of global
human resource management. Some of the common IHRM benefits
may include health insurance, Covid-19 insurance, accidental coverage,
etc. The more country-specific these benefits are the better for the
employees.

15. Handling legal compliances
It is also a critical function of IHRM to handle the stay compliant with
the regulations of different countries. Every country has different labor
laws, minimum wage legislation, data protection law, and more. IHRM
aims to evaluate all these aspects and ensure that the employees are
getting what they deserve.

16. Three Effective Tips for Successful IHRM

17. Focus on hiring the apt talents
Your first focus should always be on hiring the right talents for
international human resource management. The costs and time
involved in an IHRM recruitment program are much higher. So, it is
always preferable to take time but hire the candidate who can do
justice to the open position. It is okay to screen the candidates for
multiple rounds, but the end decision you make has to be appropriate.

18. Never ignore the power of training
Training often becomes a less significant factor in IHRM. With so many
additional aspects involved, training often takes the back seat.
However, that’s a big mistake and enterprises may have to pay for it the
hard way. Always focus on training the employees with the
organizational processes, cultural differences, language training, etc.
That way, it will be easier for the employees to adapt.

19. Make sure that employees are getting
compensated properly
Being an IHRM professional, you must always focus on compensating
the employees correctly. We understand that several factors are
involved in this process including currency differences, compliance
differences. However, don’t forget that compensation plays a major
role in motivating the employees. Around 18% of employees are
disengaged from their jobs and in most cases, the reason behind such
disengagements is insufficient compensation. So, work on
compensations in order to create an engaged workforce.

20. Global HRM and the Staffing Policy

21. Global HRM and the Staffing Policy
Ethnocentric: Here the Key management positions are filled by the parent
country individuals.
Polycentric: In polycentric staffing policy the host country nationals manage
subsidiaries whereas the headquarter positions are held by the parent
company nationals.
Geocentric: In this staffing policy the best and the most competent
individuals hold key positions irrespective of the nationalities.
Geocentric staffing policy it seems is the best when it comes to Global HRM.
The human resources are deployed productively and it also helps build a
strong cultural and informal management network. The flip side is that
human resources become a bit expensive when hired on a geocentric basis.
Besides the national immigration policies may limit implementation.

22. What Are the Major Challenges of IHRM?

23. What Are the Major Challenges of IHRM?
• Managing diversity in the workplace is one of the biggest challenges of IHRM.
IHRM professionals' responsibility is to build and maintain a diverse workforce
where each employee can stay engaged and there are no cultural differences.
• In an international scenario, HRM professionals need to bridge the gap between
employees and executives in order to create an open communication channel.
This can be a great challenge, especially in the international context.
• In IHRM, it is also a critical challenge to manage a global payroll while staying
compliant throughout. This is also something that IHRM professionals should
take into consideration.
• Removing gender-based differentiation and execute equal pay across different
subsidiaries of an MNC is another major challenge of global human resource
management.

24. Importance of Global Human Resource
Management
When the global pandemic hit the world, majorities of
countries went under nationwide lockdown. But for
organizations, there was no stopping. Businesses had to
continue their operations digitally to keep the work
going. Covid-19 has forced 30% of global employees to
work remotely.

25. Importance of Global Human Resource
Management
This will probably explain the importance of IHRM. MNCs and
international businesses are now maintaining a global
workforce without the physical presence of the employees in
their respective workplaces. Digitalization has made all these
possible. So, when if you ask us, “What is the importance of
global human resource management in the context of
international employment?” Our answer will be “Huge”.

26. Importance of Global Human Resource
Management
With IHRM, managing multinational workforces has become
easier than ever. IHRM ensures that no matter where an
employee resides, they’ll receive their share of salaries and
benefits, seamlessly. It is part of an IHRM professional’s job to
offer the employees what they deserve without considering
any geographical roadblocks in the way.