Ch. 19
Managing a Global Workforce
Managing a Global Workforce
BASK definition: the HR professional's role in managing global and mobile workforces to achieve organizational objectives.
BASK key concepts: HR structures that support global work (immigration and mobility specialists, geographic centers of excellence, global job classifications, international business travel policies); immigration and mobility (laws, visa processes and requirements, sponsorship expenses); best practices for international assignments; methods for moving work (offshoring, onshoring, nearshoring, remote teams).
Types of global organizations
| Type | Description |
|---|---|
| International | Mainly operates domestically, but exports, imports or has limited foreign operations directed from headquarters |
| Multinational (MNC) | Operates in several countries. Each country unit is fairly independent and adapted to local markets. |
| Global | Treats the world as one market, with standardized products and centralized control |
| Transnational | Combines global efficiency with local responsiveness. Knowledge flows in all directions. This is the most complex form. |
Globalization (BASK): the growing interconnectedness and interdependence of countries, people, markets and organizations worldwide.
Global staffing approaches (Perlmutter)
| Approach | Staffing pattern | Pros / cons |
|---|---|---|
| Ethnocentric | Key positions are filled by parent-country nationals (PCNs) | Control and consistency, but limits local talent and is insensitive to local culture |
| Polycentric | Local subsidiaries are run by host-country nationals (HCNs), while headquarters stays with PCNs | Local knowledge and lower cost, but can create a gap between headquarters and the subsidiaries |
| Regiocentric | Managers move within a region, such as Europe | Balances regional knowledge with mobility |
| Geocentric | The best person for the job, regardless of nationality | Develops global leaders, but is costly and complex (immigration) |
Employee categories
- Parent-country national (PCN): from the headquarters country. A PCN working abroad is an expatriate.
- Host-country national (HCN): a local employee.
- Third-country national (TCN): from neither the parent nor the host country. Example: a German working for a U.S. company in Brazil.
- Inpatriate: a foreign employee brought to the headquarters country.
- Global nomad: a person who moves from assignment to assignment.
HR structures that support global work (BASK)
These include immigration and mobility specialists, geographic centers of excellence, global job classifications (consistent job levels across countries so that pay and moves can be compared), and international business travel policies (safety, approvals, expenses, tax and immigration implications).
Immigration and work authorization (U.S. focus)
Work visas are a common exam topic. The details change often, so focus on the purpose of each visa type.
| Visa | Purpose |
|---|---|
| B-1 | Business visitor: meetings, conferences, negotiations. Productive work is not allowed. |
| H-1B | Workers in a specialty occupation, which requires at least a bachelor's degree or equivalent. There is an annual cap and lottery, and a Labor Condition Application is required to show the employer pays the prevailing wage. |
| L-1 | Intracompany transferee: someone who has worked for a related foreign company for at least 1 of the past 3 years. L-1A is for managers and executives; L-1B is for employees with specialized knowledge. |
| O-1 | Individuals with extraordinary ability in sciences, arts, education, business or athletics |
| TN | Certain professionals from Canada and Mexico under the USMCA (formerly NAFTA) |
| E-1 / E-2 | Treaty traders / treaty investors |
| H-2A / H-2B | Temporary agricultural / temporary non-agricultural seasonal workers. Both require labor certification. |
| F-1 | Students. Work is limited to OPT (Optional Practical Training) and CPT (Curricular Practical Training). |
| J-1 | Exchange visitors: interns, trainees, researchers, au pairs |
| Green card (permanent residence) | Employment-based categories (EB-1, EB-2, EB-3). Many require PERM labor certification, which shows that no qualified U.S. workers are available. |
Sponsorship expenses: employers pay for filing fees, legal fees and prevailing wages. Some H-1B fees must be paid by the employer and cannot be passed to the employee.
International assignments: best practices (BASK)
Why assignments fail. Common causes of expatriate failure (returning early or underperforming) are the family's inability to adjust, especially the spouse or partner; the employee's poor cultural adjustment; poor selection; and lack of support.
The assignment life cycle:
- Selection: assess technical skills, cultural adaptability, emotional intelligence, family readiness and language skills.
- Preparation (pre-departure): cultural and language training for the employee and their family, a look-see visit, and support with immigration, tax and housing.
- On assignment: clear performance expectations and evaluation (considering local conditions), health and safety support, socialization (mentors, expatriate networks), compensation adjustments, and education and housing help, including rental subsidies and education travel grants.
- Repatriation: plan the return before departure. Guarantee or plan the next role, address reverse culture shock, and use the knowledge the employee gained. Without good repatriation planning, many repatriated employees leave the organization soon after returning.
Types of assignments: short-term (under a year), long-term (one to five years), commuter (living in one country and working in another, with frequent trips), rotational (fixed periods on, then off, such as oil rigs), virtual (managing a team abroad from home) and permanent transfer (localization).
Methods for moving work (BASK)
| Method | Meaning |
|---|---|
| Offshoring | Relocating processes or production to another country, through a subsidiary or a third party |
| Nearshoring | Moving work to a nearby country, such as a U.S. company moving work to Mexico or Canada. The time zones and culture are closer. |
| Onshoring (reshoring) | Bringing work back to, or keeping it in, the home country |
| Remote / virtual teams | Teams spread across locations that work together through technology |
| Outsourcing | Contracting work to a third party, domestic or foreign. Outsourcing is not the same thing as offshoring. |
Global legal environment
- Legal systems: common law (U.S., U.K.) relies on judicial precedent along with statutes. Civil law (most of Europe and Latin America) relies on comprehensive written codes. Religious law is based on religious texts, such as Sharia. Many countries mix these.
- Levels of law: national; subnational (state, province, city); supranational (binding on several countries, such as EU regulations and EU directives); and international treaties.
- Extraterritorial application of U.S. law: Title VII, the ADEA and the ADA protect U.S. citizens working abroad for U.S.-owned or U.S.-controlled companies. There is an exception when complying would violate the host country's law.
- Foreign Corrupt Practices Act (FCPA): prohibits U.S. companies and persons from bribing foreign officials. It has a narrow exception for "facilitating payments" for routine government actions.
- Works councils: employee representative bodies, common in Europe, with rights to information, consultation and sometimes codetermination (co-decision) on workplace issues.
- Data privacy: the EU GDPR restricts processing and cross-border transfer of personal data.
- Termination: many countries require notice periods, statutory severance and a just cause for dismissal. U.S.-style at-will employment is rare outside the U.S.
- Global mandatory benefits: vary. Many countries require paid annual leave, 13th-month pay, generous maternity leave or government health systems.
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