Proper HR support critical to multinationals
The experience of Western companies in allocating human resources for multinational operations shows that they pick talent in three ways local employees who have the needed education, training and work experience; professionals from the host country who have worked or were trained at multinational companies' in-country operations; and people from a third country.
As Chinese companies reach out to overseas markets, the question arises about how they can pick the right people.
At the beginning of expansion, Chinese firms should send managers familiar with the strategies and aims of company headquarters; when their foreign businesses take root, Chinese companies only need to have a few Chinese employees in top positions for the sake of communication and fill the middle- and low-level manager positions with local talent; when their overseas operations are mature, localization or globalization becomes the next option.
Assigning the right managers is the key to the success and survival of overseas operations for Chinese companies.
Research indicates the failure rate of overseas managers can be very high. US human resources consultant Reyer Swaak estimates that the failure rate for US companies is as high as 25 to 50 percent, with an average financial cost for each failure $200,000 to $210,000.
The reasons for failure are technical and management problems, such as wrong selection criteria, lack of clear goals in assigning managers, or inadequate training.
There are also family or cultural issues.
Increasing the success rate of overseas professionals is not only about picking the right people, but also about how to support them in a foreign country and giving them proper treatment when they return.
Wayne F. Cascio, professor of management with the University of Colorado at Denver and Health Sciences Center, says five factors should be taken into consideration personality, skills, attitude, motive and action.
Research on multinationals shows importance is ranked according to abilities, professional qualifications, interpersonal skills, international experience, flexibility of families, experience in special countries and language skills.
We see that multinational companies mainly consider professional and international experience, as well as skills.
For Chinese companies, the criteria should include good ethics, international communication ability, professional knowledge and management experience.
Also important is a willingness to take on new adventures, optimism, a solid education, adaptability to different cultures, experience in handling success and failure, independence, trust in others and the ability win trust from others.
To support managers assigned overseas, companies should consider not only issues about work itself, but also about employees' families.
When the managers are in foreign countries, they may get a feeling of being neglected, so companies should exchange information regularly with them and have smooth communication mechanisms. At the same time, companies should also consider difficulties in employees' families, such as the work of their spouses and their children's education.
Chinese companies should pay attention to the careers of these managers, when they return to China. First, they should help managers with their career plans. Research shows that only 20 to 30 percent of managers assigned overseas say the experience is positive for their career, while 10 to 25 percent of managers leave companies within one year after they return to their home countries. This shows that worries about a negative impact on their careers do exist and surely impact the psychology of managers. The solution is to build a career plan, set a time span for their assignment and have an arrangement for their jobs when they return.
Companies should give adequate training when managers are back, as they need to adapt to the environment again.
The author is dean of the School of Business at Nanjing University
(China Daily 02/28/2007 page15)
