International Recruitement Approaches

International Recruitment

-Prof. Nishikant C. Warbhuwan
Research Scholar, S.R.T.M. University Nanded,
S.R.T.M. University, Sub centre, Latur, India.
Email: nishikant.warbhuwan@srtmun.ac.in

International Recruitment

 While recruiting people for international operations, the international HR
managers must identify the global competitiveness of the potential applicants at
the time of the recruiting process.

 Approaches to Recruitment in IHRM Though the general aim of any
recruitment policy is to select the right people for the right task at the right time,
the HR department of international companies may adopt one of the following
three specific approaches available for recruiting employees for global
operations.

nishikant.warbhuwan@srtmun.ac.in

International Recruitment Approaches /Sources

1. Ethnocentric Approach

2. Polycentric Approach

3. Region-centric Approach

4. Geocentric Approach



 Under this approach MNC’s at their headquarters formulate mission, objectives,
important decisions for the subsidiaries and expect the subsidiaries to implement them
and report back to all functional managers at headquarters level

 Therefore it sources HR for subsidiaries from its own countries or the country where
headquarters are situated

 When a company follows the strategy of choosing only from the citizens of the parent
country to work in host nations, it is called anethnocentric approach. Normally, higher-
level foreign positions are filled with expatriate employees from the parent country. The
general rationale behind the ethnocentric approach is that the staff from the parent
country would represent the interests of the headquarters effectively and link well with
the parent country.



Ex- Procter & Gamble, Philips, Samsung

 Philips filled important vacancies by Dutch nationals before 1990s as it was a Dutch
Company

 In 1996, 71% of subsidiaries of Japanese MNC’s were headed by Japanese nationals

 Toyota, Samsung follow this approach even today
Why do MNC’s Prefer Ethnocentric Approach :

 1. Non availability of qualified HR in Host country

 2. High cost of host country nationals

 3. Parent country nationals when work in foreign they are more committed

 4. Parent country nationals when work in foreign shows highest belongingness



When Should MNC’s Prefer Parent Country Nationals:

 1. During early stage of establishment of subsidiary

 2. Inadequacy of managerial and technical skills in host country

 3. Grater need for maintaining close communication and coordination with
headquarters

 4. . Grater need for maintaining uniform corporate culture

 5. When the headquarters has core competencies

 6. when home country nationals are less costly than HCN



Advantages:

 1. Parent country nationals are familiar with headquarters, policies, systems

 2. maintain close communication network

 3. maintain close coordination

Disadvantages:

 1. reduction in catching opportunities for host country

 2. Decline in morale

 3. Fails to get talent worldwide

 Cross cultural management



 MNCs under this approach treats each subsidiary as an independent company
and decentralizes almost all the operations and delegates decision making
authority to its executives

 These executives formulate the strategies based on the mission and vision of
subsidiary, design product based on host country's environment

 MNC sources perspective employees including senior managers for the
subsidiary from the host country nationals or local nationals

 When a company adopts the strategy of limiting recruitment to the nationals of
the host country (local people), it is called a polycentric approach

 Ex- Coca Cola



 Why do MNC’s Prefer Polycentric Approach

 Policy of developing HCN’s

 Social Responsibility

 High cost of Expatriates

 Cultural fit for MNCs

 Global Approach of MNCs



 When Should MNC’s Prefer Host Country Nationals

 During Growth Stage of subsidiary

 HR of Host Country is developed and fully qualified

 Distinctive in way of serving customers and mode business

 Cost of expatriates is High

 Host govt. conditions

 When Head quarters do not have any competency



 Advantages

 Less Cost of HR

 Cultural fit

 Employee retention

 Employee job satisfaction

 Appreciation by people



 Disadvantages

 Coordination becomes complex

 Less promotional opportunities

 No hands on experience both in head quarters and subsidiaries

 Limits mobility

 Different cultures at head quarters and subsidiaries


3. Region centric Approach

 MNCs after operating successfully in a foreign country, think of exporting to
the neighboring countries of the host country

 Ex- Hindustan Lever exports to Sri Lanka, Nepal, Bangladesh

 At this stage foreign subsidiary considers the regional environment (Asian or
European) for formulating common strategies like pricing for that region

 Similarly MNCs sources the prospective employees within the region in which
subsidiary is located

 Ex- Bata (India) Ltd sources its employees from south east Asian regions

 Ex- LG sources its employees from Asian regions



Why do MNC’s Prefer Region centric Approach :

 Non availability of qualified personnel from host country

 Neighboring nationals possess more similar cultural values

 availability of qualified personnel at neighboring countries at low cost



When Should MNC’s Prefer Region centric Approach :

 During transition between growth and maturity stages

 When subsidiaries expand operations in neighboring countries

 Inadequacy of managerial & technical skills host country



Advantages:

 Culture fit

 Comparatively less HR Cost

 Meets expansion needs of HR

 Perform better in neighboring countries


4. Geocentric Approach/ Global Approach

 Under this approach the entire world is just like a single country for MNCs

 They source all kinds of resources from all countries of world

 Each subsidiary functions independently and autonomously

 MNCs source for the best prospective employees in terms of suitability from entire
world

 When a company adopts the strategy of recruiting the most suitable persons for the
positions available in it, irrespective of their nationalities, it is called a geocentric
approach.

 Ex – Ms. Indra Nooyi, the Indian national appointed as a CEO of Pepsi Cola Ltd, Many
European MNCs follow this approach



 Why do MNCs prefer Geocentric Approach

 Global Business Policy

 Intensifying Competition

 Technological Revolution

 Innovative Practices in Functional Areas

 Increasing Migration



 When Should MNCs prefer Geocentric Approach

 Maturity Stage

 Customer Awareness

 Non availability of Talent in Home and Host Country

 Absence of Restrictions of Host Government



 Advatages

 Competent Pool

 Shared Learning

 Core Competencies

 Flexibility and Adaptability

 Reduction in Resentment

 Best Talent at Less Cost

 Transpatriates


International Recruitement Approaches

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