Understanding the fundamentals of International Human Resource Management (IHRM) is crucial for organisations operating in different countries. It involves managing a diverse workforce across various cultural, legal, and economic environments and countries.
In this article the basic functions of IHRM are explained including the role and responsibilities.
Table of Contents
What is International Human Resource Management (IHRM)?
IHRM refers to the process of managing HR in organisations that operate across national borders. It objective includes managing employees in organisations with operations in multiple countries, aligning the HR strategy, practices and activities with the international business strategies.
It has a broader scope than domestic HRM, as it is about managing employees across multiple countries, while HRM focuses on domestic operations in a specific country.
IHRM goes beyond the traditional functions of HRM by addressing and solving the complexities of managing employees spread across different countries.
Although IHRM must be flexible to adapt the international practice to different countries, it is key that it should be where possible have standardised HR way of working.
Difference International HR Practices versus Global HR Practices
The difference between International HR practices and Global HR practices lies in their focus, approach, and scope.
International HR Practices
Focus
International HR practices are typically focused on managing HR in a specific country where the company operates. The HR practices are often tailored to fit the local context, including the employment law, cultural, and economic environment of that particular country.
Approach
The HR practices on an international level may vary significantly from one country to another, as they are designed to meet the specific needs of each market.
The approach tends to be more decentralised, allowing local HR teams to adapt policies and procedures to align with the local norms and regulations.
Scope
International HR practices usually deal with issues like expatriate management, local employee recruitment, and compliance with local or for region labour laws (for example European Union).
The scope is narrower, concentrating on the needs of individual countries or group countries rather than the organisation as a whole.
Global HR Practices
Focus
Global HR practices, on the other hand, aim to create a unified HR strategy that applies across all countries and regions where the company operates.
The focus is on maintaining consistency and coherence in HR policies and practices across the entire organisation.
Approach
The approach in global HR is more centralised, with an emphasis on Lean Six Sigma in HR.
Global HR practices are designed to promote a common corporate culture, values, and objectives, ensuring that all employees, regardless of location, are aligned with the company’s overall goals.
Scope
The scope of global HR practices is broader, encompassing the entire organisation.
Global HR also involves balancing global integration with local responsiveness, ensuring that standardised HR practices can still be adapted to local needs when necessary.
It refers to the overall global policies and strategies used by the organisation to manage employees in multiple countries.
In summary the differences between international HR practices and Global HR practices are:
| Aspect | International HR Practices | Global HR Practices |
|---|---|---|
| Focus | Focused on managing HR in a specific country or region (e.g. European Union), tailored to local employment law, culture, and economy. | Focused on unifying the HR strategy that applies across all countries and regions. |
| Approach | Decentralised approach, allowing local HR teams to adapt policies to local norms and regulations. | Centralised approach with an emphasis on consistency, coherence, and Lean Six Sigma in HR. |
| Scope | Narrow scope, dealing with issues like expatriate management, local recruitment, and compliance with local or regional employment laws. | Broader scope, balancing global integration with local responsiveness; applies to the entire organisation. |
The Role of HR in International Human Resource Management
The role of HR in IHRM is to support the company’s international operations by managing HR effectively across different countries.
This includes recruiting the right talent, developing global leaders, ensuring compliance with local employment laws, and aligning HR best practices, policies and processes similarly in each country as possible.
The 7 Cs of International Human Resource Management
The 7 Cs of IHRM are key elements that guide the effective management. These principles will support HR professionals navigate the complexities of managing employees across different countries and cultures.
1. Competence
Ensuring that employees possess the necessary skills, knowledge, and abilities to perform their roles effectively.
2. Commitment
Fostering employee engagement, loyalty, and motivation across diverse cultural environments to ensure alignment with the organisational goals.
3. Consistency
Maintaining uniformity (Lean Six Sigma) in HR policies and practices across different locations while allowing for necessary local adaptations based on legal requirements.
4. Culture
Understanding and integrating diverse cultural values, practices, and expectations into HR strategies to manage a culturally diverse workforce effectively.
5. Compliance
Adhering to labour laws, regulations, and ethical standards across all countries of operation to avoid legal risks and ensure fairness.
6. Cost-Effectiveness
Managing HR costs efficiently while maintaining high standards in recruitment, training, compensation, and other HR functions.
7. Communication
Ensuring clear, effective, and culturally sensitive communication across different languages and regions to facilitate collaboration and understanding of employees.
Strategic Solutions
HR consulting with an international and global approach can support your company operating on an international scale address a range of complex issues, providing strategic solutions that enhance your overall effectiveness.
Cultural Integration and Diversity Management
Managing a culturally diverse workforce across multiple countries can lead to misunderstandings, conflicts, and inconsistent work practices. The Human in Progress HR Consulting Services provides expertise in cross-cultural management, supporting companies foster a cohesive corporate culture while respecting local customs and practices. This can improve employee engagement, reduce conflicts, and enhance collaboration.
Compliance with Local and International Laws
Companies operating in various countries must navigate a complex web of labour laws, regulations, and employment standards, which vary by country and region. Our HR consultants offer guidance on maintaining compliance with local and international regulations, reducing the risk of legal issues and ensuring fair treatment of employees across all locations.
Global Talent Management
Recruiting, retaining, and managing talent across different markets is challenging, especially when balancing local expertise with global leadership needs. Our HR consulting firm can develop global talent management strategies, including global succession planning, leadership development, and expatriate management, ensuring that the right talent is in place to support the company’s global objectives.
International HR Process Standardisation
Striking a balance between standardised Lean HR practices and the need for domestic HR practices to meet specific regional needs can be difficult. Our HR consultants can support designing an HR processes framework that maintain consistency, ensuring that HR practices are effective and relevant in every market.
HR Technology Implementation
Implementing and integrating HR technology systems across multiple countries can be challenging due to differences in IT infrastructure, data protection laws, and user needs. Our HR consultants can assist in selecting and deploying and HRIS that enhance efficiency, improve data management, and facilitate seamless communication and collaboration across borders.
Change Management
Expanding into new international markets such as the Netherlands or Australia requires significant changes in HR practices and organisational structure. Our HR Consulting Services can guide companies through the change management process, ensuring smooth transitions, minimising disruption, and preparing the company for new challenges and opportunities in these markets.
More Information
If your organisation is navigating the complexities of international business and you need expert support in managing your workforce, we can support you. With extensive experience in International Human Resource Management (IHRM), we provide tailored solutions that align with your HR strategy.
Contact us to learn how we can support your IHRM needs. Let’s work together to optimise your human resources for international success!
