The Challenges and Trends of Multinational Corporations in Dealing with Cultural Diversity through HR Practices: Recruitment and Selection and Training and Development
In a globalized and highly competitive market, the need for human capital has become more and more prevalent, and organizations seem to be face a series of challenges in dealing with diversity. Similarly, the role of International Human Resource Management (IHRM) is constantly changing, because of ever increasing demands for talented people who can function in a multicultural environment. Hence, considering that global mobility has constantly increased due to individuals’ professional aspirations and global career opportunities, the role of HR has become central to business’s success. The internationalization of the world economy seems to increase cultural diversity, urging organizations to integrate HR practices which focus on cross-cultural awareness.
Taking these trends into consideration, in my MBA thesis at Plymouth University, I investigated the business environment in multinational corporations (MNCs) through HR’s agenda, by focusing on the role of culture as a catalyst in both employee and business development. More specifically, through an appraisal of the literature, I tried in my research to identify and analyze the practices of recruitment and selection and training and development used by HR to improve diverse workforce’s performance. More specifically, my objectives were to investigate
- the challenges and trends that MNCs experience in managing cultural diversity in order to engage in competitive business development;
- the main factors that prevent MNCs from attracting and retaining a talented global workforce;
- the impact of the national culture on the workforce’s intercultural competencies in relation to the organizational culture; and
- the way in which MNCs are using their diverse workforce to maximize the advantages of cultural diversity through inclusion.
Using semi-structured interviews with global managers of MNCs, this research identified a number of challenges that HR faces in recruiting, selecting and training employees, such as
- dealing with unconscious bias and raising employers’ cultural awareness about their biases through training;
- the use of digitalization and artificial intelligence (AI);
- national legislation and diversity policies of inclusion; and
- dealing with conflicts and tensions due to cultural differences.
One hundred specialists in the field were selected, of whom 57 (57%) responded positively, while 43% were not willing to participate in the study due to lack of time. The sample used in the current analysis involved 28 multinational corporations. Fifty-seven semi-structured interviews were conducted with 28 HR Managers and Specialists, 11 Diversity and Inclusion Managers, 6 Global Mobility Managers and 12 Intercultural Executive Trainers.
In order to understand the impact of cultural diversity on HR’s practices, it was crucial first to understand how managers perceive culture. More specifically, it became evident that culture is perceived in terms of its two layouts, i.e. the national culture and the organizational culture. Cultural experts often refer to Edgar Schein’s simple definition of culture as ‘the way we do things here’. Many, however, consider that this definition only partially reflects the notion of culture. In the current intense globalized world, managers need to inspire employees to pay much more attention to organizational and cultural values. Simply telling people to behave “the way we do here” is not enough.
Regarding diversity, the managers tended to associate the concept with a series of factors, i.e. nationality, age, gender, education, race, religion, historical background, personal experiences, skills and thinking. Diversity reflects employees’ unique values in a shared environment in which they work together for the same goals. However, the role of inclusion appears to be crucial for the effectiveness of diversity in corporations. As argued by the majority of managers, diversity is achieved when organizations focus on building an inclusive and coaching culture that aims to maximize the benefits of its international workforce.
- Recruitment and Selection of Global Talent
- The portrait of global talent was defined as individuals with unique aptitudes, open to foreign environments, enjoying challenges, willing to learn and add value to the business, striving for personal development and perfection and being able to ‘fit’ in a new culture (both national and corporate).
- In dealing with inclusivity and exclusivity, organizations were found to focus mainly on internal recruitment. A possible explanation for this seems to be the fact that the talented workforce has already demonstrated its capabilities and added value to the company, and, hence, will further invest in the business sustainability. However, even if the emphasis is placed on internal candidates, it appears that organizations try to create a balance between internal and external recruitment, depending on the roles needed at a specific time.
- Organizations seem to have become aware of their need to remove biases from the hiring processes, i.e. neutralizing the job descriptions, changing interviewing procedures, and re-examining the job posting vocabulary which may include exclusive language in terms of gender, age, ethnical or race.
- The governmental policies and regulations imposed by every country appear to influence the global recruitment process developed by HR through their practices. Hence, the challenge for businesses is to comply with the policies of the land. For instance, there are companies which, despite their international character, promote the importance of the local culture in their recruitment and selection practices.
- The challenges caused by the new immigration laws may impose a series of limitations on organizations in recruiting their foreign workforce. However, as has been stressed by the interviewees, these changes will not prevent companies from attracting global talent if the candidates’ profiles (i.e. skills, capabilities, experience, personality traits, etc.) fit both the organizational and host cultures.
- Training and Development
Organizations seem to become more and more aware of the necessity of implementing training programs in unconscious bias and cross-cultural training and leadership. It is generally agreed that the training combines both a theoretical session explaining cultural differences between employees’ own culture and the culture they are being sent to and a practical session helping trainees to apply different values within specific business-related situations (i.e. negotiating across cultures, holding meetings, leading appropriately).
Respondents emphasized the need for all employees to benefit from cultural training. In cases of family relocation, the entire family should benefit, as the main reason that assignment’ fail is the inability of assignees’ family members to adapt to the new environment.
There is a trend in using on-line training that allows employees to access the information depending on their time and needs. However, virtual training should be treated only as a preparatory cultural course which introduces the trainee to the basic aspects of the culture he is being assigned to. It should not be considered a core function in training and development. Thus, the value of face-to-face training is still recognized by managers, since it allows participants to get a better understanding of culture and engage in different activities. Lastly, most organizations do not pay enough attention to the outcomes of coaching and training by providing follow-up sessions that verify the program’s utility and value for the business development.
Practical implications for business development and sustainability
More research is needed to disentangle additional contingencies. Nevertheless, based on my findings, it is quite apparent that it is of utmost importance for MNCs to focus more on:
- Defining clearly what global talent/the best candidate, diversity, and cultural fit mean for the organization as a basis for recruiting diverse candidates.
- Incorporating demands for global talent into their business strategy by aligning the talent model with the organization objectives.
- Keeping ahead of the competition, due to an increase in global and diverse economy.
- Investing more in diversity of thought, inclusion, and leadership.
- Updating traditional methods of recruitment using digitalization and people analytics.
- Creating a coaching culture that generates inclusion.
- Investing in on-going cross-cultural training and development.
- Avoiding unconscious biases which may impede global talent recruitment.
- Connecting the repatriation process to career planning.
This study should be viewed as an attempt to unearth challenges and trends in global recruitment and training. It can be concluded that there is no agreed consensus relating to standard recruitment process or training program that needs to be followed when searching for global talent and developing diverse workforce, since as businesses become global, so do the challenges in terms of high competition for global talent. In this regard, employer branding, reputation and high-performance systems are at the forefront of the business strategy to attract a diverse and talented workforce. However, findings have shown that even if not all organizations implement such practices, there is a slight change in organizational behaviour in terms of their methods of recruiting and training a global workforce, as well as an increase in their awareness of the need to implement change. Based on this research, I can therefore conclude that regardless of MNCs life cycle, both global talent recruitment and training and development as described in my study represent a movement forward toward improved business development and sustainability.
Adelina Stefan is a licensed Intercultural Facilitator and Research Analyst, specialized in the areas of Intercultural Communication and Human Resource Management. The combination of having been born and raised in Romania, studying and working in Greece and U.K. and currently living in Switzerland has prompted Stefan’s study of discourse, communication and management across different cultures.