Retaining Talents in Multinational Enterprises - Essay Example

Talent Management in MNEs Introduction In a constantly changing global business environment, innovation is necessary for MNEs to remain relevant in a competitive business environment. As such, MNEs need to recognise the importance of talent management as a way of improving performance. The competitiveness of MNEs depends on their ability to develop a unique strategy that is different from the competition. However, while talent management is critical in MNEs for both short term and long-term success, the top management tends to fail in terms of the need to improve the skills of their workers. In a global business environment, the competition is stiff and MNCs need to prepare adequately for the anticipated challenges with regard to their human capital. For instance, most of the MNCs are centrally managed from the headquarters and this creates rigidity in their subsidiaries in terms of giving the middle management the mandate to provide training and promotion of the local personnel as a way of managing the diversity of talent in MNCs (Story et al. 2014). In a knowledge-based industry, the knowledge of the personnel with regard to adapting to the constantly changing business environment is critical. As such, those responsible for the human resource management in these MNCs need to ensure that talent management is enhanced through training of personnel to improve their skills and knowledge management. In essence, where the human resource management of MNCs recognises the importance of knowledge management, innovation and creativity are enhanced. Conversely, the focus on expatriates rather than nurturing the local talent is a major contributor to talent management failure in MNES. This is because they deny HR the opportunity to embrace internal development by attracting, developing and retaining highly performing personnel (Story et al. 2014). This paper examines the reasons for talent management failure in MNEs and how they can be addressed. Reasons for talent management failure in MNEs The human resource management in MNCs has failed to recognise the importance of training their personnel to handle future challenges effectively. Instead, MNEs are focusing on their more experienced personnel to handle the different task in their subsidiaries around the world. This has led to a situation where the local talent is ignored, and managers sent from the headquarters are given the mandate to handle only business functions at MNEs subsidiaries around the world. However, most of the managers sent from the headquarters lack the knowledge and understanding needed to develop a talent pool that can move a multinational corporation to greater heights (McDonnell et al. 2014). In most multinational corporations, a culture has been established where leadership positions are given to those who have worked longer. On the same note, the HR has also failed to recognise the potential of young talent in their firms due to the age factor. As a result, more emphasis is given to experience and age in promoting personnel to leadership positions. Due to cultural diversity in different locations around the world where MNEs operate, the top leadership has failed to recognise the importance of localising MNEs instead of exporting personnel from other regions to take up leadership position. Cultural barriers affect negatively on MNEs performance, and where there is a lack of localisation, it is a challenge for MNEs to meet both short term and long-term targets in regions where they operate (Furusawa & Brewster, 2015). In addition, the failure of most MNEs to recognise interpersonal differences also affects negatively on talent management. The different regions where MNEs operate their businesses employ personnel from different cultural backgrounds. As such, the lack of the top leadership in these MNEs to learn and understand the values and beliefs of the personnel in a culturally diversified workplace leads to the implementation of talent management strategies that are incongruent with the values and beliefs of the personnel (Furusawa & Brewster, 2015). Most of the talent management strategies do not take into consideration the qualification of personnel in different locations where MNEs has established their businesses. As a result, the personnel in these MNEs face challenges in terms of how to advance their careers and to some extent, are forced to resign from work and join other firms where the management considers different skills in the implementation of talent management strategies (Welch & Steen, 2013). Further, talent management has also failed in MNEs because the top management is reluctant to recognise the need to train the talent pool they have and prefer recruiting expatriates to help improve MNEs performance in different locations around the world (Welch & Steen, 2013). The top leadership in most of the MNEs is also uncomfortable in terms of initiating a succession plan. In this sense, the long serving and experienced managers in MNEs often discard a plan where the young personnel with potential for leadership are trained to take up management roles in MNEs. As such, a gap is created where MNEs competitiveness is affected due to laxity in terms of recognising young talent in different regions that they operate (Ashton et al. 2010). The top management in MNEs also sometimes gives priority to the personnel at the headquarters and most of the research centres for developing R&D capabilities are located at the headquarters. Since talent management requires the headquarters to allocate the necessary resources for the HRM in their subsidiaries, the top leadership often considers such arrangement unnecessary and costly for MNEs (Guthridge & Komm, 2014). In this regard, most MNEs are comfortable establishing research centres at the headquarters to enhance innovation and creativity rather than train the talent pool in areas where they have established their businesses. On another note, the type of leadership embraced by MNEs also affects negatively on talent management. Managing talent pool requires team building, but this lacks in most MNEs where the top management emphasises authoritative leadership in different regions that they have established their businesses (Shen & Darby, 2006). Other than leadership style as an influencing factor for talent management, MNEs also try to use the similar talent management strategy for different regions that they operate. However, this is not possible due to idiosyncratic skills in different regions. For instance, the capabilities of personnel in a multinational company’s branch in China may not be similar to another branch, for instance, Nigeria (Shen & Darby, 2006). Consequently, using that same talent management strategy often fails to yield success in different regions that MNEs have established their businesses. Most MNEs has left the responsibility of talent management to the HR, and ignoring the importance of every leader in the MNEs to facilitate efficient and effective performance of their personnel. The top management of most MNEs is also focused on profit generation rather than the quality of their human capital. As such, the management of MNEs in terms of identifying talent pool gives less concern (Aghina et al. 2014). How to address the issues affecting talent management in MNEs As a result of a constantly changing global business environment, knowledge management is necessary for MNEs to remain competitive. In this regard, talent management plays an important role in ensuring that MNEs improve their performance in a competitive global marketplace. In addition, human resource practices are changing from time to time and it is important for organisations to focus on improving the skills of their employees as a way of achieving success with regard to both short term and long-term goals (Dowdy & Reenen, 2014). Today, numerous challenges face MNEs such as the need for effective leaders to manage MNEs branches around the world. The demographic changes are also affecting negatively on the MNEs due to the over-reliance on ageing personnel. Hence, talent management in MNEs is necessary to find a replacement for the ageing top leadership of MNEs globally (Juul Andersen & Minbaeva, 2013). Talent management in the current global business environment is also necessary because MNCs continue to struggle in terms of finding the necessary talent to function in a global context. In addition, due to the changing characteristics of the workforce, talent development is necessary for MNEs to remain relevant in a competitive business environment. In this regard, MNEs needs to shift from a focus on an ethnocentric approach and reliance on expatriate to manage MNEs subsidiaries in other locations around the world (Cui et al. 2005). On the same note, the rapidly changing global business environment means that there is a need for improvement in managerial skills to meet the demands of a competitive global marketplace. Among the skills in this sense, include international competence that is critical in the effective management of MNEs in a global context (Cui et al. 2005). In essence, strategic talent management in the current global business environment is critical due to the intensifying competition and change in population demographics. In this regard, MNEs need to develop talent pool to ensure they achieve success with various strategic plans. Among the practices that need to be embraced by the human resource management include identifying a group of personnel who exhibit potential as high performers and giving them strategic positions in the MNEs in the future (Story et al. 2014). The success of an organisation in the competitive global marketplace depends on nurturing promising talents to fill positions left vacant by an ageing top leadership of the MNEs. Through talent management, MNEs can ensure that there is no vacuum in terms of succession for various strategic positions in their subsidiaries across the world. Talent management in an organisation is necessary to develop superior human resources that can help to maintain an advantage over the competition (Minbaeva & Collings, 2013). On the other hand, the search for future leaders can help to overcome the challenges facing talent management. In this regard, it is important for the top leadership of MNEs to train young personnel in their organisations for leadership roles. This allows continuity in terms of establishing superior human resource capital to drive MNEs forward in a constantly changing global business environment. In addition, talent management requires MNEs to adopt a process where there are considerations for diverse social groups at the workplace (Caride, 2014). The concept of diversity is important because it ensures that MNEs exploit the talent of all workers regardless of differences in terms of gender, for instance. As postulated by the resource-based theory regarding competitive advantage, MNEs with sufficient resources are in a position to outperform those that lack the necessary resources. A key resource in this regard includes knowledge embedded in an organisation’s workforce. The HR needs to consider the importance of training activities with an organisational setting as an ideal way of enhancing MNEs performance (Yamaguchi, 2014). While the traditional role of HRM involves administrative tasks such as staffing, for instance, SHRM (strategic human resource management) entails establishing a sustainable competitive edge. As such the HRM in the current global business environment needs to focus on HR systems that can solve business problems such as developing talent pool. In essence, MNEs needs to establish an HR system geared to attracting, developing and retaining the workforce that can bring future success (Juul Anderson & Minbaeva, 2013). Due to the cultural diversity of the human capital in the MNEs, talent management can also involve considerations for localisation of MNEs. This is because developing the local talent provides MNEs with an advantage in terms of achieving success with their business functions in the host country. Training talent locally ensures that MNEs can delegate responsibilities to locals who understand the dynamics of the marketplace in their home country rather than seeking the services of expatriates to manage MNEs subsidiaries. In essence, localisation of MNEs plays a critical role in ensuring that multinationals can manage talented employees globally. In terms of facilitating talent management of personnel in a global context, it is important for MNEs to attract and retain individuals with high levels of human capital that resonates with the strategic goals of the MNEs in a competitive global business environment (Goerzen & Beamish, 2007). On another note, the HR structure in most of the MNEs has failed to recognise the importance of talent pools. In this regard, the success of MNEs in a competitive global business environment depends on identifying key performers in both the parent country and MNEs’ headquarters. However, while highly talented personnel in MNEs are critical in achieving success, flexibility is necessary for the HR system concerned with promoting individuals to strategic positions (Juul Andersen & Minbaeva, 2013). Conclusion In a constantly changing global business environment, MNEs need to embrace innovation and creativity to remain relevant and gain a competitive edge. However, in order to achieve such a milestone, it is important for the MNEs to engage in appropriate practices for talent management. Recognising and retaining talent in an organisation is important because they help to move the MNEs forward by taking leadership positions through a succession process. Conversely, the failure of talent management often emerges due to lack of the top management and the HR to attract, develop and retain highly performing personnel. Instead, most MNEs attract expatriates, and this hinders the internal development of talent pools. References Aghina, W., De Smet, A., & Heywood, S. 2014.The past and future of global organisations.McKinsey Quartely, 5(3), 97-106. Ashton, D., Brown, P., & Lauder, H. 2010. Skill webs and international human resource management: lessons from a study of the global skill strategies of transnational companies. International Journal of Human Resource Management, 21(6), 836-850. Caride, E., 2014. 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