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Question: Discuss about theHuman Resource Management for Multinational Companies. Answer: Introduction Human resource management deals with the study of understanding human behavior within an organization. It is one of the most important functions of any organization because people are the most important assets for a firm (Brewster, 2016). In this era of globalization, it is increasingly been noticed that employees move from one geographic location to another for their jobs. There are a lot of multinational companies who hire employees from across the globe for their company. Geography is no longer a barrier, people tend to go wherever there are available work opportunities. This is definitely an advantage for any firm as there is a strong demand for work and companies do not need to struggle to get employees (Sparrow, 2016). However, in this procedure there are many challenges that are faced specially by a multinational organization. An employee working in a new country or in an organization which has its base in another country can face various cultural issues, technological hindran ces and difficulty in adjusting to the work environment. At the same point of time it is important for any multinational organization to hire employees from different countries so as to gain an in depth understanding of the local functionality of a country (Marchington, 2016). This report throws light on the three major challenges faced by the human resource management team of an MNC. For the purpose of convenience, it has been assumed that the MNC in discussion is a retail industry. Cultural Differences and adjustments This is one of the biggest issues faced by any multinational organization. Every MNC requires individuals from different countries to maintain diversity and gain a better understanding of the business in a particular area. However there are many cultural differences that spring up which require immense amount of adjustment from the employees end. Every country has a different culture and it is often difficult to accept and adopt an entirely new working culture (Deresky, 2017). This may also adversely impact the employees performance. This is why organizations heavily invest in ensuring that the employees feel at ease and are able to adjust to the organizational culture (Moran, 2014). Issues faced: Language difference: Although most of the companies follow English as their official language but the use of local language in work environments is prominently noticed. This language difference between two countries can often impact the employee as he or she may not be able to adjust to the local language (Madera, 2014). This can often lead to miscommunication which in turn will affect the employees productivity (Harzing, 2013). Communication barrier: Communication barriers due to lack of understanding of the language or misinterpretation of behavior can lead to miscommunication. This can immensely impact the employees productivity as well as overall efficiency of the team (Dawson, 2014). There are various cultural differences in nonverbal communication and style of talking as well. For example, in the United Kingdom, if someone does not like an idea, they will say I dont agree with this idea because, However if in China someone does not like an idea they will not be able to say this directly (Budhwar, 2013). In fact they find it rude when someone makes a strong statement as above. These differences in communication are a challenge faced by IHRM. Organizational culture: The culture within the organization is different for different organizations. Some firms have an extremely decentralized structure, while some are strongly centralized. Certain companies promote and give a platform to innovative ideas while some companies believe in following exactly what is being told. There are organization that work in teams and there are organizations where individuals are given personal targets to achieve (Alvesson, 2015). These are various organizational differences of culture that makes it difficult for employees to adjust in a new firm. Societal differences: Society shapes the individual and largely affects his thought process and working attitude. When MNCs hire people from different societal backgrounds, they may not be able to adjust to the change in culture (Csikszentmihalyi, 2014). For example, in various Middle Eastern countries, a working women is looked down upon, now when an individual from that background, starts working in Australia, he may get a cultural shock. Many societies appreciate and accept meeting clients over drinks, whereas in certain specific societies it is considered unprofessional. Recommended Solutions These cultural issues are a serious concern and this is why human resource managers work hard to remove these differences and ensuring that all their employees feel comfortable, respected and involved in the organization. Few recommended solutions to overcome these cultural barriers are as below: Teach culture: This is very important for any multinational organization. Since they have employees working from across the globe, it is imperative that efforts are put in to teach employees different cultures and their prominence (Berrey, 2014). Sessions should be conducted monthly to learn about other cultures. This would help employees in communicating better and develop respect for other cultures of the world (Wilson, 2014). Team building activities: Team building activities are the best way to involve employees and help them work together as a team. This also helps employees to get to know each other better and hence create a more comfortable working environment (Carlson, 2015). Recruit wisely: When employees are recruited, the HR manager must ensure that the candidate is made aware about the cultural differences. It must be understood exactly what cultural background does the candidate come from and what efforts might be put in to induct the candidate in an efficient manner. Also, planning must be done to provide training to existing employees of the firm about the new culture introduced in the organization. Open communication: every company must ensure that open communication flows through the organization and its departments. Communication solves various problems and hence it is imperative that members of the organization communicate with each other. This should be implemented by employee hotline, town halls, and informal coffee meetings, team meetings, promoting written communication over verbal for important discussions, meeting minutes and open door policy adoption by the top management (Nancarrow, 2013). Technological differences Technology advancements is a major difference between countries and individuals. The technical skills possessed by an individual as well as the level of technological advancement in the country varies immensely. The technology in use will also be different for different geography. Also, we often see that youngsters are able to adopt to changing technology fast whereas the elder members of the organization find it difficult to adjust themselves to changing technology (Gonsen, 2016). There are lot of issues faced when an individual cannot cope with the technological advancements of his organization. Few of the issues are given as below: Issues faced Difference in technological backgrounds: this often causes differences in employees. Every employee is differently equipped with technology and may or may not be able to adjust to changing technological requirements of the firm. Also it is possible that the employee recruited for an MNC is better skilled than the technology currently in use at the firm and this may lead to frustration due to decreased efficiency. For example, someone working in the United Kingdom might be well equipped with the use of Chatbots whereas in India it is still a new and upcoming concept. Hence if someone from India is asked to work on Chatbots, he or she may not be entirely comfortable and will spend time in learning the same. Difficulty in learning: Many times employees may find it difficult to learn the technology in use at their new organization. This is specifically difficult in firms which are more technologically dependent like mining and engineering. An employee may face difficulty in learning the new technology and hence this may impact his performance and ability to complete tasks with the same pace as others. Resistance of change: Many times employees are resistant to change their working habits and hence it is difficult to them to learn new technology or adjust to the current technology if it is different from what they were previously using. This is specially seen in the elder members of the organization (Hon, 2014). They have more experience but take a longer time to adjust to or learn new things. Increased cost for training: Technology is by default an expensive element. Unlike language and culture which can be taught on the job by a few activities, technological training is expensive and requires more time. Also every time a new candidate in recruited, they need technological training to perform well in the organization. This can be time consuming and expensive. Recommended Solutions Every organization ensures that all the concerned members of the firm are well equipped with the technological aspects of the organization. This is done to ensure that their performance is not hampered and the company is not adversely impacted. Today every company runs on technology and if the members are not equipped with the recent trends then it will be give the firm a severe competitive disadvantage. Few recommended solutions to ensure that there is no technological difference are as follows: On the job training: The foremost thing is to provide training to all the employees while they are on the job. This training will to bridge the gap between what the employee already knows and what is expected of him (Saraf, 2017). This will help in increasing the efficiency of the employee and ensure that there is no hindrance in the employees productivity. Recruiting wisely: It is imperative that the recruitment process of the organization is stern enough to filter out employees who do not have the necessary skills to fit into the organizations technological requirements. Technological tests must be conducted to judge the candidates if the candidates are competent enough. Efforts must be put in to hire candidates who have the same technological background as that required by the firm (Peltocorpi, 2014). Continuously adopting to technological changes: The organization must consistently adopt to the changing technologies in the world today. This will instill a culture of adopting to change and reduce resistance. It should be a strong part of the organizational culture which will further ensure that every individual in the organization adopts to technological changes actively. Retaining and engaging workforce Last but not the least, this is the third challenge discussed. Due to increasing globalization, there is also an increasing competition within firms for hiring the best employees. This makes it difficult for organization to retain and engage the current workforce. The following issues are faced by international human resource managers: Competitive recruitment: Overall the recruitment industry is getting more and more competitive. Every organization looks to hire the best candidates and consistently puts efforts to lure them into joining their firm. From social media marketing to online job portals, companies are now omnipresent and willing to hire talent from every available source. Valuable human resources are getting poached from one organization to another over a minimalistic monetary raise or slightly better working environment or flexible timings etc. Ease of switching jobs: Gone are the days when employees spent all their lives working with just one company. Switching from one job to another is comparatively much easier. Most employees are unwilling to sign any long term contracts with the organization and hence they very conveniently resign and join another firm if the hiring firm offers better benefits. Loyalty to employer is no more important. Employee dissatisfaction: Due to high expectations of employees it is easier for them to get dissatisfied with their current organization. Also the amount of work expected out of employees and the long hours that the employee puts in is a major source of dissatisfaction among employees. Unfair or below industry standard rewards offered by the firms are also causing demotivation. And hence employees look out for other jobs and switch as and when they find a better opportunity. Recommended Solutions Employee retention is an important aspect for every organization. Firms invest heavily in employee recruitment, training and induction. If an employee leaves the organization, it is definitely a loss for the firm and all that expenditure goes to waste. This is why companies put in consistent efforts to retain and actively engage their existing workforce. Few recommended solutions are as below: Fair compensation and benefits: Companies must strive to offer fair compensation and attractive benefits to employees as this will help them remain interested in the organization and provide them with an effective work life balance (Rathi, 2015). Compensation is the primary motive behind which an employee works. Hence if an organization offers attractive bonuses, benefits, on time salary and incentives then the employees will automatically be better satisfied. Continuous feedback and review meetings: Consistent feedbacks and review meeting where an employees performance is analyzed and he is given a transparent feedback will help the employee with his career growth and skill improvement (Kumar, 2017). Genuine feedbacks help employees be aware exactly where they are lacking and hence they can work to improve the same. This will help the employees to remain motivated. Employer-employee Contracts: Contracts like non-compete can be signed between employers and employees so that the employee does not and cannot quit the organization until the cost of recruiting, training and induction is recovered. This will also help in protecting data and other confidential details of the firm as the candidate will not be able to join another office in the same industry. Grievance handling and exit interviews: Once the employee has decided to resign, grievance handling team should sit with the employee to discuss exactly what went wrong in his tenure. This will provide the employer with the feedback and help them retain clients in the future. Exit interviews are also a great way of knowing the cause of an employee leaving the organization and can help the firm make changes for the future. Measuring work satisfaction: Job satisfaction among employees is a major motivating factor. This satisfaction should be measured using various tools. This would help the organization know and understand exactly if their employees are satisfied and happy with their work or not. Conclusion Human resource management in an MNC is a crucial task. It takes immense amount of efforts from the employer to recruit talent in a manner that it benefits both the employer as well as the employee. There are various challenges that human resource managers face internationally across the globe. This report throws light on three major challenges with respect to culture, technology and employee retention. 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