The Benefits of Outsourcing for a Business

What are the costs and benefits of hiring home-, host-, and third- country nationals for overseas assignments? “Many MNCs are outsourcing aspects of their global operations and in so doing are engaging temporary or contingent employees” (Luthans & Doh, Pg. 498). The costs and benefits of hiring a host-country national is that they are familiar with the culture and language and they are the ones who often command lower salaries than a home-country national. MNCs want to hire local talent and also they are at the middle and lower level ranks. The costs and benefits of hiring a third-country national is that they have the expertise and necessary skills for the job and the salary and benefit package is usually less than that of a home-country national, while host-country and third-country nationals realize the need for diversity at the home office. Home-country nationals are also used to help start operations and provide technical expertise.

What skill sets are important for international assignments, and how can employees be prepared for such assignments? Selections for international assignments are usually based on and influenced by the MNCs experience and are most of the time culturally based. Skill sets that are important for international assignments and general criteria includes being able to adapt to cultural change, physical and emotional health, age, experience, education, knowledge of that country's language, motivation, family support, and leadership. Employees can prepare for such assignments by carrying out a number of different phases suggested by Tu and Sullivan. For example, “In phase one, they suggest focusing on self-evaluation and general awareness...Phase two is characterized by a concentration on activities that should be completed before a person is selected...The third phase consists of activities to be completed after being selected for an overseas assignment...”(Luthans & Doh, Pg. 508).

What are the implications of offshore outsourcing for the management of human resources globally and in India in particular?

The implications of offshore outsourcing for the management of human resources globally are that it will provide MNC managers with opportunities for finding the right talent in a large global or local market. The talent is available to the MNC and it is at a more competitive cost, which will provide the opportunity for MNCs to have labor cost savings. It also provides companies with flexibility and responsiveness to the culture in that country. Offshore outsourcing can also present challenges for MNCs such as the terms of coordination, integration, and quality management. “Once, India was seen as a source of never-ending talent. Today, India poses some of the same challenges in attracting, hiring, and retaining talent as do many developed countries...”(Luthans & Doh, Pg. 494)