The human factor, key to business internationalization

Monday, 24 september 2018 | Redacción CEU

Globalization has opened up new business opportunities abroad. As part of a growth strategy, an increasing number of companies have opted to embrace new markets outside their borders. This international expansion is set against a backdrop of constant change, exponential technological development, and a business world which is becoming more and more complex and uncertain. Managing human capital will be a crucial element for these companies to achieve success in their international project. What is the core idea underlying the internationalization of Human Resources? What hurdles do they have to cope with regarding their talent?

 

There are two variables that are usually present in most processes of contemporary internationalization, and that should be added to this complex and changeable scenario: speed of execution and an increase in business competition. Undertaking a process of internationalization entails a decision that calls for planning, reflection and analysis. Nevertheless, the dynamics of the of the current business world does not support this rhythm: times are reduced, and urgency becomes the norm. On the other hand, the number of companies that decide to bet on this kind of alternatives for horizontal growth is increasing, in a nutshell, competition increases. Against this confusing and hectic background, there is a factor which may prove decisive for the success of the company: sound management of human capital.

Four keys to the internationalization of Human Resources

Drawing up a plan for international expansion that could enable companies to compete in new markets should not be taken lightly. Several aspects must be taken into consideration by managers in their strategic plans. Furthermore, in a VUCA environment like the one we are living in, problems adopt different disguises and behavioral patterns, and thus stand in the way of this mission.

Human capital in an organization can serve as a central supporting point in expanding internationally, and it can even constitute a major competitive advantage over the rest of the brands that are also settling abroad. Undervaluing the importance of human capital is precisely one of the most frequent mistakes when companies go global.

For the purpose of facilitating the tough task taken on by leaders who decide to take part of their business abroad, we provide below a series of core ideas concerning the management of talent and the internationalization of companies:

  • A carefully designed Mobility Scheme

When it comes to selecting the professionals who will deal with a new destination, it is important to bear in mind and analyze the main points of conflict: the problems related to change of residence, adapting workers to a culture which is different to their own, the lack of experience in situ, the technical difficulties they may come across, the uncertain working future, etc. The professionals who are selected are expected to have soft skills which adapt to these new jobs (flexibility, empathy, ability to adapt…). If they lack these skills, the project may be affected by it.

Additionally, organizations must pay more attention to the full protection of their workers, for instance: by providing information about the destination country, facilitating advice upon arrival, offering assistance and health coverage, considering fiscal and immigration issues, etc. For the smooth performance of their functions it is essential for the expatriate personnel to be in agreement and to feel satisfied, as well as for their migration effort to be rewarded accordingly. This perspective cannot be approached in terms of salary exclusively. As we explained in other articles, compensation of employees should be both economic as well as emotional.

 

The human factor, key to business internationalization
  • Global, unified, and coherent leadership

An internationalization project must provide clear and well-defined objectives from its inception. This is the only way for the HR area, and in general for the professionals involved in the process of international expansion, to be able to walk in the same direction and towards a common objective. When it comes to setting goals, it is necessary to take into consideration the different challenges posed by a new market: operational challenges, local peculiarities, cultural shock, and assumed risks.

The expansion of a business demands leaders who have a global and unified vision which is consistent with the values of the company, and which provides congruity. The whole organization needs to answer for the same model. Local teams must also integrate themselves into it. To achieve this, the organization must be able to convey a culture of values which is inclusive and solid, and which can also take into consideration the specificities of new markets.

  • An engaged local team

Not knowing the destination country is yet another obstacle to the internationalization of companies. The best way to collect information about a foreign market is by having contacts who are knowledgeable about it. However, aside from listening to partners, suppliers, contributors, and opposing parties –depending on what kind of internationalization we opt for– it is essential to impulse and early and active participation of the local teams who are working on a project. This does not only involves listening to their opinion regarding economic, fiscal, or legal issues, but it is also important to meet their needs and help them to sort out the difficulties they might encounter. The company can, for instance, contribute to improving these employees’ professional skills by means of a training program.

  • A HR area that takes part in the strategic positioning

By taking into account the HR area’s vision early on in the planning of a project, avoiding problems that may come up later is easier. This way, there is no need to look for unplanned solutions, and companies can manage to anticipate their workers’ needs.

At The CEU IAM Business School we believe that in order to successfully face such a complex and changeable business environment like the current one, it is necessary to receive the kind of training that lives up to this challenge. Our Executive MBA aims at training the tomorrow’s professionals who will be in charge of leading the change in cutting-edge companies both within our borders as well as outside them.