Appealing to IHRM is Good or Bad for company success ?

 

“The set of distinct activities, functions, and processes that are directed at attracting, developing, and maintaining multinational enterprises' human resources” (Taylor, Beechler, & Napier, 1996, p. 960).

Figure 01

                                                                              Clip 01 

Three Effective Tips for Successful IHRM

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.

 

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.

 

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.

 

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 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.

Pros of IHRM !

International Human Resource Management (IHRM) offers several key advantages in the increasingly globalized business landscape:

Talent Acquisition and Diversity: IHRM enables organizations to tap into a diverse talent pool from different countries, enriching the workforce with various perspectives, skills, and experiences.

Global Strategic Alignment: IHRM ensures that HR practices are aligned with the organization's global business strategies, fostering consistency in management approaches and facilitating smoother international expansion.

Cultural Sensitivity and Adaptation: IHRM emphasizes cultural awareness and sensitivity, helping organizations tailor their practices to suit local cultures and norms, which in turn enhances employee morale and engagement.

Knowledge Sharing and Learning: Through IHRM, employees from different countries can exchange knowledge, best practices, and innovative ideas, promoting cross-border learning and boosting overall organizational performance.

Flexibility and Mobility: IHRM supports the movement of talent across borders, allowing for the deployment of skilled individuals to different markets and regions based on business needs, thus facilitating better resource utilization.

Cost Efficiency and Localization: Effective IHRM practices help organizations optimize costs by leveraging lower labor costs in certain regions, while also adapting compensation and benefits to local economic conditions.

 

International Human Resource Management (IHRM) refers to the management of human resources in a global context, where an organization operates across national borders. While IHRM offers numerous benefits, it also comes with several potential disadvantages or cons for an organization.

Complexity and Diversity: Managing a global workforce introduces complexity due to differences in languages, cultures, laws, and business practices.

Legal and Regulatory Challenges: Each country has its own labor laws, regulations, and employment practices.

Communication Barriers: Operating in different time zones and languages can lead to communication challenges.

Costs and Resource Allocation: IHRM often requires significant investments in terms of training, technology, and administrative resources to manage a globally dispersed workforce. Additionally, compensation packages may need to be adjusted to account for cost-of-living differences, which can impact the organization's budget.

Cultural Differences and Adaptation: Cultural diversity can lead to misunderstandings, conflicts, and difficulties in integrating diverse teams.

Talent Retention and Engagement: Maintaining employee engagement and retaining top talent across different locations can be challenging. Cultural differences, limited career advancement opportunities, and other factors can impact employee satisfaction and loyalty.

Inconsistent Performance Standards: It may be difficult to establish consistent performance evaluation standards and criteria across diverse cultural and regulatory contexts.

Data Security and Privacy: Managing HR data across borders raises concerns about data security, privacy, and compliance with data protection laws.

Resistance to Change: Employees and local managers in different regions might resist or be hesitant to adopt new global HR policies and practices, especially if they perceive them as incompatible with local customs or practices.

 

Conclusion

 International Human Resource Management plays a vital role in shaping the success and competitiveness of organizations in today's interconnected global landscape. By effectively managing human capital across borders, organizations can harness the benefits of cultural diversity, strategic workforce planning, and efficient resource allocation, ultimately contributing to their growth, innovation, and sustained success.

 

References

 

Narangn M & Smith (2016) Definition of Human Resource Management :  Working Paper Series, 14th ser., 1­30. Retrieved February 1, 2016  https://www.economicsdiscussion.net/human-resource-management/definition-of-human-resource-management/31830 .

 

Aishu 1 (2013) Difference between Personnel Management and Human Resource Management  Working Paper Series, 25th ser., 1­30. Retrieved May 23 . 2013https://www.economicsdiscussion.net/difference-between/difference-between-personnel-management-and-human-resource-management/31629

Angouri, J., & Glynos, J. (2009). Managing Cultural Difference and Struggle in the context of. IDA World: Working Paper Series, 26th ser., 2­20. Retrieved February 1, 2016  (https://scholarcommons.sc.edu/cgi/viewcontent.cgi?article=1061&context=senior_theses)

The Lavin Agency Speakers Bureau (2014) Business Speaker Erin Meyer: How Cultural Differences Affect Business [Online video] https://youtu.be/zQvqDv4vbEg [Accessed 15 August 2023].