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CHAPTER 7
SELECTION AND STAFFING OF INTERNATIONAL
EMPLOYEES
CHAPTER INTRODUCTION
The buyer buys the seller not the salt.
—HR advice from the ages
Chapter 7 looks at the important challenges in the selection and development of employees that
comprise those teams described in Chapter 6. Our attention in this chapter turns to a strategic
overview of employee selection options. A discussion of the details and intricacies of staffing
options, especially the use of expatriates, completes the chapter.
When they are involved, IHRM professionals can help address and handle problems. They are
instrumental in helping top executives understand and value different cultures, provide advice
about structure and coordination, and train employees in key cross-cultural skills that can impact
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CHAPTER REVIEW OUTLINE
SELECTION AND DEVELOPMENT OF INTERNATIONAL EMPLOYEES
I. Overseas Staffing: A World of Choices
The breadth of staffing options used by multinationals is often a function of how much
revenue they earn abroad, and practical and strategic issues. Generally, the greater the
their revenues overseas (e.g., Halliburton). Staffing foreign operations is a complex
proposition with a variety of choices. Table 7.1 presents the types of employees that
multinationals may want to consider.
A. Parent-Country Nationals (PCNs)
A traditional option is to use parent-country nationals in senior executive and key
1. the belief that local employees in a foreign subsidiary lack relevant skills
Sending a PCN abroad is an expensive option. Adding to the expense is that failure
rates for expatriate assignments (defined as a PCN who is ineffective in their job or
one who returns home prematurely) vary from 5 to 70%. About 25% of expatriate
postings end in failure. Perhaps the biggest risk in sending PCNs overseas is their
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often limited grasp of local cultures and business practices, especially early in the
assignment.
B. Host-Country Nationals (HCNs)
Many firms turn to host-country nationals to fill lower- and middle-level management
jobs. HCNs are individuals from the foreign country where a multinational has set up
C. Third-Country Nationals (TCNs)
Another related and common staffing option is the use of third-country nationals to work
D. International Cadres
PCNs, HCNs, and TCNs represent the most common staffing categories, but not all.
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High-potential foreign employees are sent to the home country to develop socialization
and business skills and strengthen their commitment to the parent firm. In turn, the
inpatriates teach others about doing business in foreign markets.
II. Selecting and Developing International Employees
How do firms decide which type of possible international employee is best for a specific
overseas position? Such decisions must be made with a firm’s international business strategy
Selection procedures can be customized and modified—e.g., traditional American procedures
can be adapted to better fit cultural values that Japanese firms want to emphasize in their U.S.
plants. In one auto parts plant, the Japanese management wanted to stress team skills,
Fortunately, the selection system developed at this Japanese plant in the U.S. cleverly
blended both approaches. In this hybrid system, groups of job applicants assemble
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The success of any selection or training program depends in part on how well it matches the
values and culture of the employees being trained. For most U.S. managers, self-focused
training improves performance more than group-focused training. The opposite is true for
many Chinese managers. Individualist cultures view performance in terms of a single
III. Staffing and Managing International Talent
The methods by which multinationals recruit and develop their international employee
workforce into a competitive advantage are reflected in the firm’s international strategy.
Major forces impacting multinationals’ efforts to develop their workforces include
IV. Developing Employees with International Skills
How should firms go about developing employees with appropriate international skills? One
option for forward-thinking firms is to move promising employees through a series of foreign
assignments over several years. This tactic results in employees with extensive experience
across many cultures and diverse situations.
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V. Expatriates: Improving the Odds of Success
Many multinationals have been trying to cut back on expatriates in recent years, partly
because of the high cost. International firms are increasingly looking to hire HCNs or TCNs
to staff their foreign operations, and have dispatched employees on shorter trips abroad and
VI. Balancing Risks and Rewards with Expatriates
Expatriates are a risky and pricey option, and when an expatriate fails for one reason or
another the consequences can be severe. Table 7.3 illustrates this point.
Expatriate postings are expensive, easily costing three times an expatriate’s in-country annual
salary. Thus, the cost for a three-year expatriate assignment can cost a multinational
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VII. Choosing People for Expatriate Assignments
Multiple factors must be considered in the selection and training of an expatriate, including
the assignment itself—e.g., what competencies are needed, how much interaction is required
with local employees or customers—and features of the location such as cultural and
socioeconomic differences. What the potential expatriate also possesses in terms of
motivation, skills, experience, and family situation matters greatly.
So how do multinationals actually evaluate candidates for expatriate assignments? Western
multinationals use talent information systems to build databases of potential expatriates to
identify the best candidate for in-depth interviews, psychometric tests, performance in
assessment center training, and intensive reviews of relevant past accomplishments. The key
goal is to pick the person who best fits the requirements of the assignment.
Multinationals will do well follow the recommended process laid out in Figure 7.3. Selection
teams that consist of home-country, host-country, and IHRM professionals can help identify
expatriate candidates using appropriate selection methods. Home- and host-country managers
on the team represent the needs of the parent firm and foreign subsidiary, respectively. Once
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VIII. Preparing Expatriates for their Overseas Assignments
Preparation should include activities before, during, and after the assignment. Many
expatriates experience major adjustment problems and culture shocks when they start their
overseas assignments and again once they return home, making repatriation efforts critical.
Cross-cultural training runs the gamut from brief, generic activities that take a couple of days
to detailed, multifaceted programs that take weeks or even months to complete. Table 7.4
presents different levels of training rigor along with typical activities associated with each.
Training rigor should reflect the cultural toughness of the assignment location. The greater
the difference between the host-country culture and the expatriates’ home culture, the more
challenging their adjustment will be. Training is more rigorous when expatriates are sent to
places high in cultural toughness for them. Cultural toughness has important implications for
Expatriates should not rely exclusively on their employers for assignment preparation and
IX. Coming Home: Repatriation Challenges
Significant challenges face expatriates once they are home. Repatriation issues are often
responsible for the high turnover rate of expatriates after they return home. After years
overseas, expatriates experience the following problems upon returning:
1. Home feels “foreign” because political, economic, or social changes have occurred.
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2. Home feels foreign because the expatriate’s attitudes and values have changed while
abroad.
Multinationals must address repatriation concerns well before expatriates depart for their
assignments. A firm’s strong repatriation program can serve to stem destructive levels of
X. Seeking an International Career?
In many companies, having significant international experience is no longer a luxury for
advancement to the top—it is a necessity. Experience as an expatriate, particularly over
multiple assignments, is likely to remain the gold standard for acquiring the skills and talent
often needed to rise to senior management in a multinational firm.
A. Recent surveys of MBA students (American, Canadian, and European) from top-rated schools
asked about their level of interest in foreign assignments as a stepping stone to an international
career and upper management. While interest in “international assignments” was high (roughly
80%), interest in pursuing an “international career” was not (about 50%). About one third of
those surveyed wanted an international assignment as their first post-graduation job.
XI. Pursuing International Career Paths
The following is some general advice to consider for those committed to an international
career, and willing to work for an extended period abroad.
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1. Identify multinationals that do an outstanding job of recruiting people into management-
development programs that include clear, well-defined international career paths.
Table 7.6 presents a variety of tips for landing an overseas job. For additional information,
investigate job boards for people seeking overseas positions (e.g.,
www.anamericanabroad.com).
CHAPTER SUMMARY
This chapter discussed the options for staffing foreign operations, including PCNs, HCNs, and
TCNs. Some multinationals seek to develop an international cadre that can serve anywhere,
Firms follow specific selection philosophical approaches (geocentric, ethnocentric, polycentric,
or regiocentric) in staffing their foreign operations. Preventing the costly consequences of failed
The chapter concludes with a brief discussion about international career paths. While it may be
possible to acquire significant foreign experience through a variety of mechanisms, experience as
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DISCUSSION QUESTIONS
1. What are some of the pros and cons associated with using PCNs, TCNs, and HCNs?
• PCN pros:
o excellent technical skills
• Cons:
o often lack understanding of the local business environment and/or culture
• HCN pros:
• TCN:
o may combine deep technical and cultural skills with less expense than PCNs
2. What should the basic elements of a successful program to select, prepare, and repatriate
employees destined for foreign assignments look like?
• See Figure 7.2, Table 7.3, and Table 7.4
3. How can cultural toughness and family issues be managed effectively for expatriates?
• Systematic approach to screening and selection process, including consideration of
family dynamics, motivation to go, and so forth
4. Are you personally interested in an international career? Give reasons why or why not.
• See Table 7.6
ADDITIONAL ACTIVITIES
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MAKING THE CASE FOR INTERNATIONAL UNDERSTANDING – Multinationals
Find Recruiting and Retaining Chinese Talent a Tall Order
BOXED FEATURES
CULTURE CLASH – Getting Personal to Get the Job
ADDITIONAL RESOURCES
Table 7.1 Choices, Choices: International Employee Types Available to Multinational
Firms
Types of Employees
Description
Parent Country Nationals
(PCNs)
Employees who are citizens in the nation where the
multinational is based
Traditional Expatriates
PCNs who are sent abroad on assignment for one year or more
Expatriates
home country and who are then posted overseas for one year
or longer to a country other than where they were born
Just-in-Time Expatriates
Expatriates hired from outside the multinational on a one-time
basis to fill a specific role or particular assignment—hired on
an as-needed basis
relocation
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Frequent Business Travelers
Employees who must make frequent international trips for
their jobs, usually lasting from a few days or weeks to a few
months at most
Localized Employees
Employees who are posted to a specific foreign location and
treated as a local employee; the firm or individual may want to
be permanently based there
Permanent Expatriates
Employees who spend many years, if not their entire careers,
in international assignments, going from one foreign posting to
another
Host Country Nationals
(HCNs)
Locals hired to staff foreign subsidiaries or operations
Inpatriates
Typically, HCNs who are brought to the multinational’s parent
country to fill a temporary assignment lasting from months to
two years
Third Country Nationals
(TCNs)
Employees who are hired to work in a foreign subsidiary or
the headquarters of a multinational, but who are actually
citizens of another country
Domestic Internationals
Stay in their home country, but perform “remote” international
work (e.g., interacting with foreign customers by phone, email,
video calls, etc.)
International Commuters
Live in one country, but commute to work in another country
Boomerangs
Employees who are hired or chosen to return to their home
countries to work for the multinational
Outsourced Employees
“Employees” who actually work for global employment firms
hired by the multinational to provide workers or even entire
staffs for a foreign outpost
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Table 7.2 Think You Have the Right Stuff? A Skill Profile for International Managers
Skill Area
Thumbnail Sketch of Desired Competencies
Multidimensional
perspective
Has extensive multi-functional, multi-country, and multi-
environment experience
Line management
proficiency
A successful track record in overseas projects and assignments
Decision making
Successful in making strategic decisions across a variety of
situations
Resourcefulness
Has skills to be accepted by host country’s government and
business elite
Cultural adaptability
Can quickly adapt to foreign cultures, with diverse cross-cultural
experience
Cultural sensitivity
Deals effectively with people from many cultures, races,
nationalities, religions
Team-building
Can create culturally diverse working groups that achieve
organizational goals
Mental maturity
Has the endurance needed for the rigors of foreign posts
Negotiation
Has track record of successful business negotiations in multi-
cultural contexts
Delegation
Has track record of ability to delegate in cross-cultural contexts
Business Practices
Can conduct business across borders successfully in a global
environment
Change agent
Has track record of successfully initiating/implementing
organizational changes
Vision
Can quickly spot and respond to threats and opportunities in the
host country
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Table 7.3 Expatriates and the Consequences of Failure
Failure
Consequence
Description/Implication
Premature return
Estimates of the percentages of expatriates who are asked to come home (or
request it) vary on the assignment and situation. Yet, premature return can
jeopardize a firm’s ability to compete effectively.
Wasted
relocation costs
Sending expatriates abroad (plus partner, spouse, children), is very
expensive. Wasted costs on relocation can easily top $100,000.
support costs
an expatriate.
Other indirect
costs
Failure hurts the career/confidence of the expatriate and damages relations
with local employees, officials, customers, and suppliers (which take time to
repair).
Ineffective
performance
Even if expatriates stick out their assignments, they may not be performing
well (e.g., making poor decisions, hurting local relations, not meeting firm
goals).
Turnover after
repatriation
When expatriates after returning from a foreign assignment, it leaves the
posting.
Negative
momentum
As word spreads of the problems expatriates have (e.g., failure, “out-of-
sight, out-of-mind” issues, lousy repatriation prospects), recruiting becomes
harder, making it more difficult to capitalize on overseas opportunities.
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Table 7.4 Levels of Cross-Cultural Training Rigor
Level of
Rigor
Time Duration
Activities Included
Low
4–20 hours
Lectures, films, books, area briefings
Moderate
20–60 hours
Everything above, plus role plays, cases, survival-level
language training
Everything above, plus assessment centers, simulations, field
trips, in-depth language training
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Table 7.5 Before, During, and After: Suggestions for Improving the Repatriation Process
Time Frame
Suggestions/Description
Before
departure
• Clearly communicate reentry job options, establish career development
plan
• Appoint home and host country mentors to support expatriate
• Arrange home visits for visibility
3–6 months
before
return
• Conduct briefings with employee/family about what they’ve learned
• Explain home country changes that may impact their return
• Ask expatriate to list return expectations to minimize misunderstandings
• Explain firm’s moving policies and repatriation programs
• Offer counseling for more serious problems
3–6 months
after return
• Provide training for reentry shock, or any negative feelings about return
• Ask employee how new skills and experience can be better used by the
firm
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Table 7.6 Want an Overseas Job? Better Get Busy
Tips for Snaring a Job
Abroad
Explanation/Description
Learn additional languages
Multi-lingual professionals are always in demand
For lower level jobs, leverage
any specialized skills
Specialized skills can provide an edge in lower level jobs if
marketed correctly
For higher level jobs, network
like crazy with key players
Focus on people who have clout where you want to go and develop
long-term relationships with executive recruiters
Get involved in international
professional groups to raise
your visibility
Attend international meetings, participate in global bulletin boards,
and speak at international conventions—these provide opportunities
to meet and pitch to people who might hire you for an overseas job
international issues to raise
your profile as an expert
about international business topics in newspapers or business
foreign suppliers, customers,
and officials
someone who can in your desired location
Keep track of former
colleagues
They may now be working for a new employer in a foreign country
and may be in a position to help
costs
but it may impress a hiring manager overseas and help you compete
against local talent that is cheaper to recruit
