Host Country Nationals
The high cost of expatriates has led to many MNEs turning to host country nationals to meet international subsidiary staffing needs (Tarique, Schuler & Gong, 2006). In addition, multinational companies typically staff their subsidiaries below the highest management level with host country nationals (HCNs). These localization strategies also involve recruiting and developing HCN managers for future senior management positions from within their local subsidiaries. Finding, developing and retaining this high-potential local talent is often challenging for multinationals, particularly where there is a scarcity of managerial talent such as in emerging markets (Sparrow, Brewster & Harris, 2015). Paik and Ando (2011) found staffing in foreign affiliates with HCNs versus parent company nationals was dependent on the strategic orientation of the firm. Sidani and Al Arriss (2014) found that although localization policies (replacing foreign workers with local ones) altered the ratio of host to parent country nationals employed in MNEs, the effect was uneven and could alter perceptions about the quality of local talent that is hired. Additionally, the effect of strategic orientation and localization policies on the global recruitment process is understudied. Another area in need of further research is how recruitment takes place when expatriates return to a country to become an HCN. Thite, Srinivasan, Harvey and Valk (2009) found that expatriates returning home to manage host-company operations were more willing to accept such assignments than expatriates from the parent company, but research has not yet built on this work to better understand these dynamics.
The recruitment of host-country managers is also made more difficult by a weak or lacking employer image, a deficiency of local labour market and local education system knowledge, language and cultural problems at interviews, trying to transfer recruitment methods which work well in the home country to foreign countries and trying to recruit to a formal set of criteria when flexibility is required (Scullion, 1994; Scullion & Brewster, 2001). Recruiting HCNs also requires awareness and understanding of how MNE origination country images as well as images about the MNE itself influence employer brand perceptions among HCNs (Froese, Vo & Garrett, 2010).
We know little about the effectiveness of recruitment practices across cultures (Ma & Allen, 2009). Culture seminars targeting cognitive, affective and behavioural competence development (Waxin & Panaccio, 2005) and mentoring systems (Howe-Walsh & Schyns, 2010) have been found to improve SIEs’ cultural assimilation and adjustment and improve recruiting outcomes. Host country nationals have also been found to play an important role as socializing agents (Toh & DeNisi, 2007), suggesting that recruiting the right host country nationals to work with global talent can improve the effectiveness of international assignments. Unfortunately, little research has been done in this area.
Many international firms have neglected the training and development needs of their host country managers and focused virtually all of their management development efforts on their parent country national managers (Scullion, 1994). However, research suggests that a reputation for training and skill development can enhance recruitment, particularly in emerging markets (Holtbrugge, Friedmann & Puck, 2010). It is has also been suggested that when seeking to recruit high-potential managers, international firms should emphasize their localization strategy and link their plans for localization to the career prospects of local managers (Evans, Pucik & Barsoux, 2002).
In general, we do not know much about the determinants of effective recruitment of HCNs. It is likely that HCN recruitment and attraction to firms is influenced by characteristics of the local subsidiary, parent company, originating country of the parent company, as well as local culture, laws, regulations and talent market. Additionally, managers at different host company locations are likely to recruit differently as a function of local norms, cultures, laws, and so forth. Thus, there are likely to be important determinants of recruitment outcomes of HCNs, but most of these issues remain to be identified and studied.