- Be able to explain the three staffing strategies for international businesses and the advantages and disadvantages for each.
- Explain the reasons for expatriate failures.
One of the major decisions for HRM when a company decides to operate overseas is how the overseas operation will be staffed. This is the focus of this section.
Types of Staffing Strategy
There are three main staffing strategies a company can implement when entering an overseas market, with each having its advantages and disadvantages. The first strategy is a home-country national strategy. This staffing strategy uses employees from the home country to live and work in the country. These individuals are called expatriates. The second staffing strategy is a host-country national strategy, which means to employ people who were born in the country in which the business is operating. Finally, a third-country national strategy means to employee people from an entirely different country from the home country and host country. Table 14.4 “Advantages and Disadvantages of the Three Staffing Strategies” lists advantages and disadvantages of each type of staffing strategy. Whichever strategy is chosen, communication with the home office and strategic alignment with overseas operations need to occur for a successful venture.
Human Resource Recall
Compare and contrast a home-country versus a host-country staffing strategy.