Human Resource Challenges in t

Human Resource Challenges in the Global Environment

In the next decade, international issues will become more important to human resource (hereafter referred to as HR) professionals in the United States as a growing number of businesses participate in the global marketplace. Indeed, nearly 17 percent of U.S. corporate assets are invested overseas. Through early awareness of emerging international trends, HR professionals can help their companies respond to the international environment in the way best suited to their organizations. Compiling a complete laundry list of topics for the HR professional to monitor would in itself encompass an individuals career. The scope of this paper is limited to three issues that HR professionals should closely monitor in the expanding global market. First, management must be aware of the host country workforce framework and structure. HR professionals must provide these services to the company by developing sound approaches. Second, the growing importance of international labor standards has fueled the need to understand apply these standards overseas. Finally, with a growing reliance on computers in relation to HR programs, HR professional must be aware of HR integration during development of company intranets.

U.S companies must be aware of the host country workforce framework and structure. Russia provides an excellent example as a big country with big needs-millions of potential consumers eager for goods and services denied them under communism. Since the fall of that system, a new market economy has grown quickly. Foreign businesses (an estimated 35,000 registered enterprises, not including joint ventures) now compete with each other and with Russian startups for market share.

Today, most U.S. companies are looking to replace expatriate employees with Russians at all organizational levels. Cost is a big part of the answer, primarily because Russian salaries in U.S. firms average 20 to 30 percent below U.S. employees' wages, although the gap is narrowing, especially at senior levels. In addition, Russian workers don't receive the housing, travel, and healthcare allowances that U.S. workers require.

Another reason for hiring Russians is that they, unlike U.S. employees, are more likely to work long-term in a company's Russian operation. The hope is that these Russians will grow in their jobs, learn the trade inside out, become seasoned managers and spearhead their organizations' strategic planning. The senior managers in foreign companies that are staffing up are still largely expatriate. The problem is that it's hard to find Russians who've traveled, studied or worked abroad and have the right skills and experience for senior jobs.

The scarcity of Russian candidates able to fill management slots is due in part to a lack of familiarity with U.S. leadership and management, which calls for initiative and open communication. Most Russians have lived and worked in only one system, and many of these organizations were behemoths, and most jobs were highly specialized. The general director made all the decisions, and everyone else did as they were told. That working environment has left several legacies. One of the most influential might be called a "keep your mouth shut" style of working-a natural result of years spent under a system in which to talk and ask questions was to invite trouble. No wonder, then, that many Russians are hesitant to ask for help, take the initiative, admit to being confused or engage in open styles of communicating.

An unfortunate consequence of this style of working is that often U.S. managers don't realize their messages aren't getting across. U.S. managers think if they tell someone to do something, it should get done. In other words, they 'send' a message and consider it received. Russian employees 'receive' the message but rarely give feedback. Such differences in style make it easy for miscommunication to occur, especially when unfamiliar words or different modes of delivery are used. The result is that the Russian does something, usually not exactly what the manager had in mind, and then feels insecure, and the manager starts mumbling about the incompetence of Russian employees.

When talking about training and development for Russian employees, many HR and senior managers in U.S. firms maintain that a mix of hard and soft approaches and styles is necessary. U.S. managers must navigate between pride and ignorance of how things are done in the U.S. setting and use caution in ensuring that business teaching and training don't become condescending. Under communism, responsibility was diffuse; everyone in general and no one in particular was responsible for getting things done or for taking the initiative.

To help Russian employees understand and make better use of U.S. business practices, some companies offer special training programs. For example, one firm operating in Russia (Pepsi International Bottlers) identifies potential high-performing leaders, evaluates them across 10 to 15 categories and provides them with customized training based on their evaluations. This training, which is designed to enhance general managerial and personal skills, addresses areas such as negotiation, customer focus and business writing. In addition, the firm assigns a mentor to each Russian trainee and provides further on-the-job training. Sometimes this training involves travel to facilities in other countries. Typically, most Russians have had little experience with situational leadership, a result of communism, even if they've worked for some time as managers. Russians have traditionally followed a different model of leadership in which the group conforms to the leader's style in all situations. The program helps Russians develop leadership skills, which is vital. Now let's explore the impact of international labor laws.

In the past several years a movement toward minimum international labor standards continues to gain strength. HR professionals with international responsibilities may be asked to assume responsibility for communicating and administering these standards in their organizations. Four forces are driving the trend toward international labor standards: pressure from social advocacy groups, labor union activities, resentment of multinational corporations (MNCs) in developing countries, and U.S. and European proposals for linkages between trade policy and human rights.

Social advocacy organizations committed to the establishment of international labor standards are growing more vocal in their efforts to encourage organizations to adopt codes of conduct. While apparel manufacturers remain the traditional target of advocacy organizations, companies operating in other industries are no longer immune. In 1995, for example, the US-Guatemala Labor Project (USGLP) initiated a campaign to persuade Starbucks Coffee Company to adopt a code of conduct outlining its labor standards and those of its suppliers operating in Latin America. At first, Starbucks management rejected the USGLP. Known for its progressive treatment of workers in the United States, the Seattle-based company believed its donations to international relief and development agencies were generous enough to insulate it from charges of labor exploitation. The USGLP disagreed and continued to exert pressure on the company. After more than 70 USGLP-led demonstrations were held at Starbucks coffee bars around the country, the company agreed to draft a code of conduct. The code was released in October 1995.

Labor unions in the United States are also attempting to influence the international labor practices of U.S.-based corporations, arguing that U.S.-based employees are unable to compete with overseas workers who are paid below-market wages and benefits. As an example, in 1995 the National Labor Committee (NLC) and the Union of Needletrades, Industrial and Textile Employees (UNITE) approached The Gap, a major U.S. clothing retailer, about working conditions at its Mandarin factory in El Salvador. Finding the NLC and UNITE allegations valid, Gap management announced it would cancel its contract with the Mandarin facility. Contending the company had missed the point, the NLC and UNITE accused Gap management of abdicating its responsibility to the Mandarin workers by pulling out rather than using its influence to secure better working conditions. As a result, the company agreed to work with its contractor and the El Salvadoran government to bring the facility into compliance with acceptable labor standards and to resume operations once the standards were met.

In addition to social advocacy groups and unions in the United States, some developing countries are beginning to hold Western-based multinational corporations responsible for their foreign labor practices. In 1996, representatives from several Asian labor groups publicly chastised multinational corporations for failing to apply the same labor standards they use in Western countries to their Asian operations. The groups alleged the workplace environment in Asia is deteriorating as a result of MNC actions.

As a result, some countries have announced they will become more vigilant in policing the labor conditions of workplaces operated by foreign multinationals. Vietnam, for example, has promised to strictly enforce safety rules at foreign-backed ...

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