January 11, 2011 by MSI
There have been immense
changes in recent years in both competition and globalization. As a result,
emerging markets are achieving unprecedented economic growth. As recession
experts claim, spending in emerging markets has surpassed the U.S. consumption
for the first time.
Emerging markets are regions
of the world that are experiencing rapid globalization. They are shifting from reactive
recipients to active shapers of globalization and they offer companies
extraordinary opportunities for profit. Countries that are considered
important emerging markets are Brazil, Russia, India and China (BRIC) and they continue
to attract global interest. Not only do these countries offer lower operating
costs, but they are also home to rapidly growing middle classes that are
potentially huge markets for products and services.
The challenge for Human Resources (HR) is the ability to manage
a workforce in these markets. China and India's
individual workforces are larger than those of Europe, the United States and
Japan combined. Once seen as an infinite supply of low-cost labor, many
emerging markets are now facing the same shortages of skilled labor that are
well-known in developed countries. HR will need
to reevaluate their recruitment, development, and deployment of skilled
employees to meet the demand.
The transfer of experienced employees from established
locations to new markets strengthens the bonds between developed and less
developed markets and promotes the sharing of knowledge, business principles,
and corporate culture, but they present cultural challenges for the
international assignee and their families. It is important for the assignee to
have expectations that line up with the realities of the location.
Aside from the potential language and cultural
barriers, emerging market assignments can include a host of hardships,
including housing, crime, climate, education, civil unrest, all of which may make
the assimilation extremely difficult for the assignee and their family. Settling-in
services, extensive intercultural and language training, home finding
assistance, security, health and safety planning will be paramount for success
of an assignment. The more remote the location, the more extensive the benefit
offerings should be.
In order to meet the unique needs of these markets,
companies will need to look beyond conventional strategies. For expatriates to achieve their goals in these
markets, the challenges and risks must be identified and managed. The
companies that manage it successfully will be most likely to thrive with the
changes in globalization in the years ahead.
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