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 this 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
the bottom line. Consider a firm that wants to enter a country that is in the process of converting
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
percentage of revenue earned overseas, the more likely it is that firms will insist their senior
proposition with a variety of choices. Table 7.1 presents the types of employees that
multinationals may want to consider.
A. Parent-country nationals
A traditional option is to use parent-country nationals (PCNs) in senior executive and key
technical roles overseas. PCNs are citizens of the country where the multinational is
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 that is ineffective in their job or
one that returns home prematurely) are vary from 5-70%. About 25% of expatriate
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postings end in failure. Perhaps the biggest risk in sending PCNs overseas is their
often limited grasp of local cultures and business practices, especially early in the
assignment.
B. Host-Country Nationals (HCNs)
Many firms turn to to fill lower- and middle-level management jobs. HCNs are
C. Third-Country Nationals (HCNs)
Another related and common staffing option is use of third-country nationals (TCNs), to
work in foreign subsidiaries or at multinational headquarters. TCNs hold citizenship in a
D. International Cadre
PCNs, HCNs, and TCNs represent the most common staffing categories, but not all.
Multinationals often want a talented international cadre—a group of managers who can
be plugged into any country and successfully represent the firm’s values. These managers
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Sending high-potential foreign employees to the home country is done 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.
Table 7.2 depicts the staffing complexities that multinationals must consider and deal
II. Selecting and Developing International Employees
How do firms decide which type of possible international employees is best for a specific
overseas position? Such decisions must be made with a firm’s international business strategy
in mind, taking into account its competitive environment, overseas sophistication, level of
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
windshield wiper motors. Employee performance within groups is assessed by trained
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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 is reflected in the firm’s international strategy. Major
forces impacting multinationals’ efforts to develop their workforces include globalization,
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 deep experience across
many cultures and diverse situations.
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Other firms with extensive overseas operations have developed global training programs for
employees that includes training for expatriates going to specific countries. Global training
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 7.5 illustrates this point.
This high number may be due to expatriates finding themselves increasingly posted to
challenging countries where living conditions can be harsh and far removed from the home
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 process for an expatriate,
including the assignment itself, such as which competencies are needed, how much
interaction is required with local employees or customers, and features about the assignment
location such as cultural and socioeconomic differences. What the potential expatriate also
possesses in terms of motivation, skills, experience, and family situation matters greatly.
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 past accomplishments relevant to the
assignment. The key goal is to pick the person who best fits the requirements of the
expatriate assignment.
Multinationals will do well follow the recommended process laid out in Figure 7.6.
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,
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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 7.7
Companies may invest in new directions for expatriate preparation that promise to increase
expatriate success rates. Offering a mentoring program that provides expatriates with both
home-country and host-country mentors keeps expatriates “plugged in” about developments
in the home office while host-country mentors can also help expatriates to share their
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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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 the
surveyed wanted an international assignment as their first post-graduation job.
XI. Pursuing International Career Paths
A. 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
B. Table 7.9 presents a variety of tips for landing an overseas job. For additional information,
investigate job boards for people seeking overseas jobs (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 (either geocentric, ethnocentric, polycentric, or
regiocentric) approaches in staffing their foreign operations. Preventing the costly consequences
an expatriate is the gold standard for international careers. Interested international career
individuals should focus on multinationals that do an outstanding job of recruiting people into
substantial management development programs leading to clear, well-defined international career
paths.
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DISCUSSION QUESTIONS
1. What are some of the pros and cons associated with using PCNs, TCNs, and HCNs?
• PCN
• Pros:
• excellent technical skills
• have relevant, necessary skills
• Cons:
• often lack an understanding of the local business environment
• HCN
• Pros:
• TCN:
• May combine deep technical and cultural skills with less expense than
PCNs
• Provide opportunity to develop international cadre of managers
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
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4. Nature, extent, and rigor of training programs; that is, more rigorous training needed
5. Are you personally interested in an international career? Why or why not?
• See Table 7.5
ADDITIONAL ACTIVITIES
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
CULTURE CLASH –Hardship Post or Comfortable Sojourn? Western Expats in China
and Chinese Expats in the West
ADDITIONAL RESOURCES
Table 7.1 –
Table 7.2 –
Table 7.3 –
Table 7.4 –