Human Resource Planning

In addition to processes, strategy and governance, employees and executives of a company play a particularly significant role in successful internationalization. GEXSO examined the focus of human resource planning on globalization, and analyzed human resource planning measures for further international expansion.

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Overall Assessment

Gexso-Index_20International human resource planning is generally very important to the participating companies, and they implement numerous measures for international human resource management. However, the scattered nature of responses demonstrates that said measures are not implemented to the same extent in all companies. The greatest consensus is in further training of international supply personnel – 79 per cent offer further training, regardless of location and nationality – as well as in the strong distribution of positions through the parent company or headquarters: 86 per cent of the participants state that they are involved in this process. This correlates with the general organization of the interviewed companies: 80 per cent of them see themselves as being organized centrally (see chapter on governance).

The Results in Detail

Gexso-Index_2150 per cent of the interviewed companies stated that they prefer local employees when hiring for of executive positions, for the purpose of creating more localization and flexibility. The largest scattering of responses appears in statements on international career planning of future executives. Therefore, this strategic characteristic of human resource planning plays a huge role in some companies and a very small one in others. 41 per cent of the companies offer the prospect of an international career to potential executives. For 37 per cent of the companies this hardly applies or does not apply at all. In accordance with the practice of staffing executive/leading positions with local employees, international career planning of future employees is an important strategy to increase flexibility and simplify international communication. Therefore, companies that are already highly globalized today pursue international career planning more strongly than companies that count on few markets and production sites. Given the ongoing process of globalization, however, this aspect is important for all companies in order for them to take advantage of a global supply chain.

Gexso-Index_22Most companies implement other aspects of human resource planning, such as globally uniform requirements for executive positions, a standardized selection process for expatriates, and a global target agreement and evaluation system (62 per cent, 54 per cent and 61 per cent, respectively). In relation to the headquarters’ human resource policy we analyzed the extent of their commitment (multiple answers were permitted): Three quarters of the interviewed companies stated that their headquarters are the decision-makers for staffing of international key positions. There are hardly any differences between the sectors in this case: 78 per cent in the automobile supplier industry and 70 per cent in the machinery and plant engineering sector. However, 60 per cent of the companies in the machinery and plant engineering sector put closely follow the headquarters’ guidelines or input in relation to candidates of international key positions, with a reference value of 39 per cent in the automobile supplier industry.

The machine and plant engineering sector thus occupies an advisory function in questions relating to recruitment within its national subsidiaries. In the automotive supplier industry this applies to a lesser extent.

In both industries there is a roughly equal incidence of head office reserving the right for veto staffing/hiring decisions. Given the larger scope of requirements, and higher volatility, employees of the machinery and plant engineering sector face considerably more restrictions and different requirements. Evidently, guidelines for the executives should ensure good collaboration at points of intersection in spite of heterogeneity and volatility. In summary, it can be found that the majority of companies meet internationalization processes with respective personnel measures. The staffing of international key positions for headquarters plays an essential role within a centralized corporate culture. The companies generally offer international training programs and prefer to staff leading positions with local staff. However, there are large company-specific differences regarding international careers. Human resources must be considered the most important field of action for promoting integration in the continuous process of internationalization.

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Successfully leading within a global production network – experiences of European industrial companies during the globalization of their supply chain.

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