Global Staffing
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Running head: COMPREHENSIVE REPORT ON GLOBAL STAFFING STRATEGIES
Global Staffing Paper
Jeff A. Jabusch
University of Phoenix
Global Staffing Paper
As global competition increases, American companies are turning to offshore outsourcing to help cut costs and free domestic talent to pursue new products and services (Frost, 2003). Therefore, companies need to have a global perspective and identify staffing strategies with potential for successful American acquisition of foreign business opportunities. At the international level, the complexity is greater because the organization must evaluate employees from different countries working in different business relationships. Staffing is a huge challenge in many foreign locations where there are many who desire employment but few have the right skills and experience. This places a tremendous strain on a companys staffing infrastructure, especially in a foreign location. Several staffing strategies are beneficial to overcome barriers to establishment of offshore locations. One particular powerful model involves contracting with a local recruiting company to provide screening services and from global experience, is known to have a greater success identifying and assessing solid local candidates (Lockwood, 2006. Other opportunity with excellent staffing results is through employee referral programs that tend to enhance an organizations image working in foreign country. In addition, a highly successful source for staffing in a foreign country, are those who relocate with their spouses and have the desire to work instead of just staying home. Research is important to assure that the county and region where the acquisition transpires is receptive to foreign interests. Unique cultural and regulatory factors are important considerations that affect organizational effectiveness and the design for staffing strategies. In some circumstances, change is required in the domestic organizational structure to achieve the desired results of the staffing strategy in another country.
Industry Identifications
Universal Services is a global leader in providing customer contact management solutions and services in the business of outsourcing industry. Our expertise in communications, financial services, and technology provide flexible high quality customer service outsourcing solutions through call centers that support customer service. With high quality client base around the world in the communications and financial industries, acquisition to expand operations into a new location requires careful consideration and planning. Offshore call center are not just in India but forming all over the world. A recent report by global research firm Datamonitor predicts that the fastest growth between now and 2008 will occur in Latin America, followed by Asia-Pacific region (Country Review, 2005). This means that Universal Services has more choice when choosing new acquisitions. Important issues for considering a new location are; labor cost, skills, regulatory environment and language or cultural gaps. Research indicates that an acquisition in Argentina is very compelling from both the strategic and financial prospective.
Unique Cultural Organizational Effectiveness
According to the U.S. Department of Commerce, Argentina welcomes foreign direct investment through national treatment under a free foreign exchange and capital movement regime without wage or price controls (EIU, 2004). Universal Services may invest in Argentina without registration or prior government approval on the same terms as investors domiciled in Argentina. There are only a few exceptions sectors: real estate in border areas, air transportation, shipbuilding, nuclear energy, uranium mining, and fishing (EIU, 2005). None of the exceptions applies to Universal Services. Acquisition or merger are acceptable in Argentina and face the same regulation. In general, taxes are assessed on consumption, imports, assets, property, and payroll (social security and related benefits) (EIU, 2006).
Argentine workers are more highly educated and better paid, on average, than labor in other Latin American countries. Economic reforms and the introduction of laborsaving technologies have increased demand for highly skilled workers and may cause a problem in finding skill local candidates for staffing. Some other considerations are recent social changes and other taxes that significantly add to the cost of Argentine labor (EIU, 2006). High severance payment requirements and strict rules on collective bargaining also contribute to a tight labor market.
The Argentine Labor Code has traditionally been a serious disincentive in the hiring of new employees. A labor reform initiative enacted in May 2000 was expected to address some of these rigidities over time by increasing collective bargaining flexibility, extending trail employment periods, and lowering payroll taxes for new permanent hires. However, incomplete implementation of the new legislation leaves in many of the early disincentives to new hiring (EIU, 2006). Key legal reforms for Universal Services to consider related to staffing strategy are the following as noted from the Economist Intelligence Unit information on Argentina:
Ley Nacional de Empieo 24013 /91. This law created unemployment insurance; allowed some positions to be filled by temporary workers; set limits on termination payments; created some negotiating flexibility in working hours per day; and reduced some social cost to employers.
Ley de Accidentes de Trabajo 24028/91. Created mandatory social insurance to be managed by the private sector; created incentives for the improvement of health and safety conditions; reduced costs related to work injury claims; and provided better solutions for the settlement of workers compensation.
Decree 1331/91. Required that large increases in salaries, as result of collective bargaining, be tied to increases in productivity.
Decree 470/93. There are tow levels of negotiating on salaries and working conditions; general collective union bargaining, to negotiate basic salaries and working conditions and specific negotiations within the firm over variable levels of salaries and working conditions.
Ley 24467/95. Allows for flexibility in hiring and termination and reduces social security costs for small and medium-sized firms. In part, this legislation has created a two-tier labor market, with some workers