Executive SummaryStandard Chartered Bank is a UK based firm with a global presence both in the developed and developing countries. 90 percent of the bank’s employee’s work outside the United Kingdom and the bank has adopted a different human resource management strategy that differs significantly from traditional HRM practices adopted by international organisation. According to Thatcher (1997, p. 52), Standard Chartered Bank uses internationalised local managers sourced from the same countries it operates in. The local managers are recruited and trained specifically to work in the middle and senior management levels of the bank.
By doing this, the bank has successfully reduced its use of expatriate managers and is hence better placed as a transnational company, rather than a multi-national one. As will become clear in the body of this essay, Standard Chartered Bank’s approach to International Human Resources Management (IHRM) has its fair share of challenges. However, the benefits of such an approach are also numerous, to the point that other companies operating on a global scale will have no option to follow suit if they want to succeed in international markets.
Among the outstanding benefits of this IHRM approach, that was apparent during the case study review, was the fact that managers who were recruited and trained locally would specifically be positioned in their home countries. This means that the managers did not have to move from one job posting to another, and therefore the bank does not need to meet some of the incentives needed when sending employees on foreign assignments. IntroductionFor any organisation with an international business structure, managing the human resource is always a persistent problem.
This is especially so because coordinating the workforce and managing the operations of a firm in different countries is not as straight-forward as operating in one’s domestic market (Briscoe, Schuler & Claus, 2009, p. 51). The United States Office of Personnel Management (1999, p. 3) has put the challenges faced by organisations in perspective by stating that in addition to HRM undergoing dramatic changes over the last five decades, organisations are encountering more competition hence forcing them to adopt more innovative HR delivery approaches. More to this, the organisations have to grapple with less skilled human capital available in the contemporary environment.
Traditionally, multinational enterprises was typically done in there approaches namely; employing parent-country nationals; employing host-country nationals; and employing third-country nationals (Briscoe, Schuler & Claus, 2009, p. 210). A review of Standard Chartered Bank’s human resource strategy however indicate that the financial firm has departed from this form of staffing practices, choosing instead to focus on the second option, which involves staffing the different operations in different countries with employees from the host country. As indicated by Thatcher (1997, p. 53), Standard Chartered Bank gets most of its profits (90 percent) from its corporate and retail sectors in developing countries in Africa, Asia and the Middle East.
Despite this, the bank has not been spared by the skills and talent challenge facing other multi-national companies operating in the developed world. As indicated by Briscoe, Schuler & Claus (2009, p. 232), multinational firms operating in developing countries are facing a major problem finding local human capital with the right education and skills. Having adopted an International HRM strategy that seeks to recruit local talent, Standard Chartered is no doubt facing additional challenges in countries where there are practically no trained banking talent.
As such, the bank has resulted to a non-traditional HRM method of creating its own talent factory, which seeks to recruit and train locals in different countries with the requisite banking skills.