In present time, Globalization has increased its presence in the companies in all over the world. The companies are expanding its business in different countries to get success and growth. The objective of this essay is to analyze and observe the various issues of the human resource management in the international market. The essay has provided the deep understanding about the cultural and HRM issues which can be faced by the UK companies which are going to establish a call centre in Philippines. The companies must take into consideration the issues and challenges to avoid and reduce the chances of the failure. The human resource management is not limited to staffing, planning, training and education, performance management, labor relation, and compensation undertaken by the organization (Adler &Gundersen, 2008). Human resource management has now changed to international human resource management. Due to evolution of international human resource management, the activities related to HRM are getting more complex with various functions such as international relocation, administrative services, international taxation, training and appraising of the employees in the international market, and inter-government relation etc. the international HRM is quite differ from the local HRM because of many complexities. The company of UK may face various issues and complexities related to culture and HRM while opening a business of call centre in Philippines. The culture and regulations are differ in one country from another and it many create various challenges for the HR of company to manage everything (Gurbuz, 2009).
International human resource management: Impact of various cultures
It is clear that the human resource management is the source of competitive advantage for every organization. Basically human resource management can impact the performance of the organization with the strategic management. So, the international human resource management is connected with the strategic needs of the organization. International human resource management can be described as the combination of various actions, processes and functions which are adopted to attract, develop and maintain the human resource in the multinational company. It is the combination of diverse HRM methods to manage the people in the multinational companies (Price & Price, 2003). In the study of international human resource management, there is the study of various HR activities such as managing HR practices and policies in many countries across the world. The international human resource management affects the goals and objectives of the company. The HRM should be a strategic activity for the organization for the international perspectives. If the goal of the company is international market, then the international human resource management will impact the performance of the company. But it is not easy to manage the human resource in the international market as the company has to adopt various strategies to survive in the international market (Hansson, 2007).
The main issue of international human resource management is the conflict between globalization and localization. Globalization refers to having competitive advantage by the MNSs over the national companies based on the capacities and this can be achieved by the standardization of the HR practices and policies. So, HRM in the global market is sometimes directing between two different demands which can be beneficial strategically under various situations. There is the need of the HR strategies to be fit for the employees working in the international area (Green, Wu, Whitten & Medlin, 2006). The HR polices must meet the demands of culture and strategy for the MNC to flexible in the market. Due to the development of globalization, there are many new challenges and complexities to manage the MNCs. International HRM can be seen as the key feature for balancing, controlling and coordinating the organization. This includes international coordination, development of global leadership, and management localization etc (Briscoe, Schuler & Claus, 2011).
The human resource practices in one country are different from another country. There are number of human resource policy which are successfully practiced in certain countries may not be successfully practiced in other countries. So, the UK companies must focus on the Human resource practices which would be suitable in the Philippines. For example, in the United Kingdom there is the policy of performance scheme and is successfully practiced in the country but it cannot successfully be used in another country. The culture of the country has also affected on the decision making process of the organization related to strategy and HR practices i.e. performance appraisal of the employees. There are many HRM practices with the specific characteristics in the various countries (Caligiuri & Tarique, 2012). By the evaluation and analysis, it has been observed that the UK companies have promotion policy, and they invest more amount of money for the comfort and management development program of employees (Syed & Yah, 2012).
The culture of the Philippines is quiet differ from the culture of UK. The culture of the Philippines, the business is done by the personal relationships. So, the HR has to maintain its relationship with the other corporate organizations. In the UK’s culture the communication style is direct but on the other hand, in Philippines, the communication style courteous and is often indirect. Although there are strong human resource policies in UK but there are the chances that policies cannot be implemented successfully in other countries. But the policies and procedures are different in the Philippines as compared to UK. So, UK companies must understand that there is the requirement of those policies which must fit in the target country (Guest et al, 2003).
Management of people as a business resource:
The companies can face many challenges while expanding the business in the international market. The companies may face challenges due to future workforce and the changing nature of work. So, the HR of the companies needs to get ahead by understanding the challenges and issues which can be faced by them while locating a call center (Taylor, 2015).
Figure 1: International HRM
(Source: Taylor, 2015)
There can be various challenges and issues for HR in Philippines. Some of those are as follows:
Winning the war for talent
To recognize the right talent for the company is one of the major complexes for the HR managers in the international market. Along with this, in the international market, government plays a significant role in controlling the flow of labor. When the company is expanding globally, it faces the shortage of skills and workforce. So, the companies seek the ways to attract the labor force in the international market. It is a challenge for the HR to sort out the right talent among the unskilled people. Due to presence of various laws in the target country, HR may have limited number of telnet for hiring. For the HR, it is the challenge to hire the right people. Before hiring the people in Philippines, the HR of the company will have to define the hiring strategies and programs to attract larger workforce. Due to the combination of different culture and nationalities of UK and Philippines, HR will have to grab the details of laws and legislations to make sure that the employees are selected legally in the organization. Along with this, the HR needs to redefine the strategies and meet the deployment demands. So, the HR may find the difficulties in selecting and hiring the right candidate in the international market (Chris, Paul & Guy, 2007).
The company is locating the call centre in a quite different environment. So, in many cases, HR has to adopt various policies such as incentives, benefit policies and retention strategies for the employees. The reason to adopt these policies is that the company will be new in the market and the employees are the main part of the organization. So, it is not so simple to recruit the capable staff. The HR has to ensure that the people are productive, committed and will not leave the organization within the short duration. It is important to engage the employees in the operations of the call centre for the growth and for the HR managers; it will not be an easy task (Khalid & Rehman, 2010)
Managing the risk of global operations
Although there are many benefits of expanding the business of call centre in the Philippines but there can be the risk of operating business globally. HR may face difficulties while managing a team. There can be some obstacles such as the time differences can complicate the organization and co-ordination. HR has to manage the social bond with the people which is the most difficult to develop. For the development of call centre in Philippines, HR needs to develop the better strategy for risk management and business planning activity. The HR of the companies needs to be more involved in the preparation for disruptive events such as natural disasters, interruptions in IT-system; complexities in the supply chain etc. along with this, the HR should also adopt the social-responsibility practices. HR of the company should also understand the types of risks such as child labor, toxic and other illegal practices. In locating the call centre in Philippines, HR of the company has to consider the various types of risks that can be raised in the international market. HR has to adopt some strategies to manage the impact of risk in the business operations (Khan, 2010).
The company has to with the various kinds of risks such as political risk, risk related to setting up the business. The political environment of every country is different. The structure, democratic system and government policies are totally diverse in Philippines as compared to UK. Along with this, the ecosystem of Philippines is different such as command economy, mixed economy, market economy, political instability etc. The HR in UK companies has to face the issues related to these differences. These are the real challenges the HR has to face while entering in the global market by the company. The government of the Philippines has different rules, regulations and policies and the HR needs to understand those policies, priorities and philosophies. There is the requirement to accept and follow the viewpoints by the HR to be successful. Along with this, economic policies of both the countries are also different in terms of fiscal policy and import policy etc. (Okpara & Pamela 2008).
Further, to operate in the Philippines market, UK Company has to adopt many different ways based on the nature of the consumers and many different things. For example, there are different currencies of both of the countries so the company can face the issue of currency exchange. HR has to understand the rules and regulations of monitory policy of the Philippines. It would be big challenge for the HR managers while entering in the global market (Michael & Michael, 2006).
When a company enters in the global market, it has to face currency risk in that country. The currency risk can be occurred due to the fluctuations in the exchange rate of that country. Along with this, currency risk can be raised due to foreign taxation, asset valuation, inflation, and transfer pricing etc. As discussed above, there would be the difference the cost of workforce and operations in the Philippines as compared to UK. There is sufficient workforce presented in the international market but the cost of the resources may differ in the Philippines as compared to host market. It would be the challenge for the HR as cost creates big dissimilarity for operations. HR managers have to deal with the cost issues in the international market. In case of HR in call Centre Company has to be conscious about the generated revenue due to fluctuations in the exchange rates.
As the UK Company has the idea of locating call centre in the Philippines, the HR has to hire the employees from the different geographic and the cultural background. For this, the HR has to adopt the laws related to tax and labor which have different wages rates for the work. The compliance with the international laws related to currency can be the issue for the HR managers as these laws are very complex and difficult to implement in other country’s HR system.
Further, in the different country such as Philippines, there would be diverse labors having diverse principles and standards regarding wages and salaries. So, HR managers have to understand the terms and laws related to cost in the country. There is no certainty about the fluctuations in the exchange rates and it is the great challenge for the HR to understand to deal with the exchange rates of currency in the global market. By understanding the regulations, HR will be able to hire the employees based on their requirements (Keating &Thompson, 2004).
The international human resource management is not only focused on the permanent employees but also on those employees who migrate due to the company. Those employees are provided little attention in the organization. Along with this it would be difficult to manage various HRM for the UK Company in the Philippines. So there can be many problems for the host company in the international market. There are some recommendations that must be considered by the company in UK while locating the call center in Philippines.
- Company must adopt the HRM strategies such as training, selecting, compensating, and repatriating for the global employees.
- Company should have specific policies in the HRM process to deal with the various factors such as economic factors, industrial relations norms, labor cost factors etc.
- HR should have open communication procedure by the management meetings around the world to understand the infrastructure of various countries.
- The HR should conduct development retention programs for the employees in the international market so that they can adjust in the environment of the company.
- HR manager should have prior experience of the international market and its operations which is very important for the company to deal with the issues. Such experience may lower the issues of human related problems.
- There should be a local staff in the MNCs to deal with the various issues such as communication gap, and integration process. HR should use the management committee of local staff for the better adaptation of the global environment (Tessema & Soeters, 2006).
The essay has discussed about the international HRM and issues faced by those companies who are going to operate in the international market. From the above essay, it has been evaluated that entering in the international market and to experiencing the international market is a complex job for the organizations. The HR managers have to face numerous challenge and issues related to civilizations, plans, HR policies and procedures and behavior of the customers. It also has been observed that the international human resource management is not an easy process like human resource in the host country. The human resource in the international market is not the name of providing training, education, doing staffing and planning. It is the also related to labor relation, compensation, and performance management within the organization. So, it is clear that the company of UK has to face many issues and challenges regarding the process of HRM while locating the Call Centre in Philippines. Further, it also has observed that international human resource management impacts the targets and objectives of the company. So, the strategic activity should be adopted by the human resource management for the international market. The company in UK can face the issues in terms of cost, infrastructure, differences in workforce, tariff barriers, rules and regulations of government in different countries etc. To overcome from the issues and challenges, the company has to adopt some strategies. The recommendations are given in the essay which can be adopted by the company of UK to get success in Philippines market.
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