Importance of Risk Management for Expatriates
Question:
Write about the Role of HRM in Risk Management for Hostile Environment.
Risk management is one of the critical activities in most organizations and it has become an area of focus by most managers and researchers today. Possible risks cover wider areas in financial, operational and tangible risks e.g. organizational and personal risks. Often, organizations focus on risk management on the work environment at a domestic level. However, multinational corporations, (MNCs) operate beyond national borders thus bringing the issue of expatriates’ safety. The latter faces risks like diseases, kidnapping, terrorism, home invasion, or street crime. Therefore, this paper focuses on risk management for expatriates working in the hostile environment. The focus will be placed on risks they face when in foreign countries, place of work and where they spend time with their families. It is important to note that the essay will be based on an article written by Bader, Schuster & Dickmans in 2016 on International Human Resource s and Risk Management. The study holds that HRM should empower employees working in a foreign land with skills in communication, leadership, conflict management, evaluation, motivation, and training to protect them from risks associated with the hostile working environment.
Risk management for expatriates is important because it ensures the safety of personnel, especially those working for MNCs. Admittedly, in search for new opportunities; MNCs are bound to in areas that pose different types of harm to employees. For example, in areas prone to terrorist attacks, expatriates may be targeted for exploitation. Similarly, their houses may be invaded and harm is done to their families.
Before, these risks were found in few developing countries like Chile, Brazil, and Indonesia. However, because of increased use of technology, political instability, and civil unrest, more countries have become prone to risks for expatriates. In 2013, Bader and Berg identified countries like South Africa, Nigeria, and Columbia as having increased number of terrorist attacks and significant threats to expatriates.
Additionally, recent studies have also shown that there is an increase in the rate of risks for expatriates in developed countries as well. For example, Germany and France were identified by Caligiuri and Czinkota in 2010 as having a high number of risks for expatriates. Consequently, fewer expatriates go with their families to work location. Apart from causing a strain in the family, this leads to low productivity because of stress.
Risks management by HRM for expatriates working in a hostile environment should be a top priority for organizations’ management. To get the best out of operating in foreign countries, there should be effective strategies for managing risks like expatriate risk management (ERM) guidelines which were proposed by Richard et al, 2017.
Increasing Risks for Expatriates
Management involves an integrated and risk-based strategy to managing security for employees deployed in dangerous environments. It is the duty of HR to create safety awareness and why they should respect legal requirements on the safety and healthy working environment for them to reduce the challenges of staff exposure to unnecessary risks. Loss of life and Injuries are the major source of security risks of workers. They should be treated as important in order to improve the status of the organization in terms of performance and motivation in HRM. There is an increased violence on workers and this has made HR to address issues of organizations’ responsibility and staffs’ security. They have made it a requirement and a policy in order to ensure successful operation (Bader, et al., 2015, p. 127)
HR risks for expatriates include diseases, natural calamities, and weather and how to mitigate these risks. To solve these risks, they need to understand activities of HRM which includes: recruitment, selection, development, maintenance, motivation, and training. This will help employees and managers achieve organizational and individual goals. Understanding these activities will also enable HRM to link the relationship between risk and HR. Failure to observe these activities increases chances of poor performance and increased risks (Brewster, et al., 2014, p. 1921).
Apart from areas prone to natural calamities, people working across international borders are also endangered in areas experiencing conflicts. For example, in Western Sudan, Darfur is one of the worst places of crises having 4.7% workers affected by frequent conflicts (Malik, et al., 2014, p. 927). People there depend on international and local aid from the organizations. In the process, personnel is sometimes considered partisan by conflicting parties hence being targeted. This makes it difficult to operate within the environment.
A few years ago, violence on aid workers increased among staffs who are the victims of direct attacks. Car-jacking, robberies and home ground break-ins are common in the workplace and make employees worried though there are recent risks of abduction and kidnapping (Bader & Berg, 2014, p. 539). From the statistics of the UN in 2012, 50 UN staff and aid organizations were abducted or kidnaped from Darfur.
In the recent studies, it was reported that foreigners are at an increased risk. Ever since in 2010, kidnappers managed to attack six teams of foreigners who work from Darfur, a case that has never happened before (Collings, 2014, p. 253). Workers fear to operate from the areas and therefore create a vacuum in the area.
HR Risks for Expatriates
Similarly, there were looting and desperation as a result of delayed medical and food supplies. A report from Dabic, et al., (2015, p. 316) showed youths roaming the city armed with machetes while searching for food. This situation currently is becoming worse as poor people are waiting for supplies and food delivery. This environment is not conducive for both domestic and foreign employees. However, in line with the scope of this study, sometimes looting extends to the homes of expatriates leading to the destruction of properties and life.
It is a requirement that multinational companies have a better management strategy and organized practices and policies that show what happens in the process of critical incidents. Similarly, it is important for organizations to define how they handle critical information, situation and protection of people (Brewster, et al., 2014, p. 1921).
Any severe incident happening locally is shown globally to enable people to know how to deal with incidents. It is important not only to the staff members but also the organizations’ reputation. It is also important to the NGOs safety in the area and security information should be shared.
In 2011, there were debates on the need for change because organizations were not performing in terms of security management. The latter did not see the need to change security systems citing no worker had died, risks are unavoidable and that they have managed risks with existing competencies and tools, thus there was no need for new or additional measures.
It is evident that organizations have focused on organizations capability and need for better actions to reduce employee fatalities and injuries and learn from past mistakes (Dabic, et al., 2015, p. 316)
HRM is a department where management security and legislation normally takes place. The way in which organizations view staff as important to their vision and mission is seen in the practices and policies on staff welfare. In the law, every organization is responsible for duty of care to its staff and risk mitigation. If staff security is compromised then the employment legislation offers a framework for providing care.
Therefore, it is necessary that HR professionals ensure harmony with tools of risk management (Bianchi, 2015, p. 144). It is necessary that HR department has the right people for the job before deployment. If employees are deployed in dangerous environments, they are prone to serious incidents hence they may not deliver. Practices and policies of managing staff are crucial and therefore organizations should understand functions and role of HRM in security and risk management.
Critical Incident Management
Organizations can consider HRM as a strength and tool for effective risk management and satisfaction of employees working in the foreign environment. Effective risk management and HRM require HR personnel to have unique skills to enable handle risky situations. These skills include communication, leadership, conflict management, evaluation, motivation, and training. Risk management practices are initiated by people (McNulty & Brewster, 2016). HR failures result in failure of best-planned RM strategies. Management succession results in risk. It affects financial and legal activities. This succession requires HR activities of the job description, analysis, training and motivation in order to help handle risks well. Risk management practices should foresee the possibility of employees’ calamities for better planning of risk management.
Similarly, HRM cycle has a role to manage HR functions in all organizations. This cycle provides a basis for identifying important HR functions of relations, rewards, development, and resourcing aimed at attaining the organizational goal of performance. It also involves the integration of important functions of teamwork for HRM to be successful. This cycle involves selection, training, and rewards (Fee & McGrath-Champ, 2016, pp. 1-26).Such HR activities have a role in supporting the organization to win a competitive advantage in the market.
Employment cycle is useful for HRM managers when implementing various areas affected by insecurity for international and national staff. Therefore HR should consider effects of every stage of HRM practice and policy. Decisions are made at every stage and therefore it is important for organizations to understand how securities decisions need to be incorporated to support HR manage each phase (Driffield & Jones, 2013, p. 140). This will help HRM to select staff with special experience and skills to work in dangerous environments. Firms should not ignore the importance of selection, the risk associated with recruitment process in order to have the right person for the job. It is dangerous to select a wrong worker in dangerous environments. This may results in unproductive, dangerous and costly and unhappy staff thus underperforming. (Baruch, et al., 2013, p. 2369).
Once a staff has been recruited then the risk management activities depend on the support given to employees at planning and preparation stage before employees are assigned duties. If these issues are not considered, it may result in a huge difference between safety, productivity and health of employees in case they are injured or dies (Jackson & Schuler, 2014, p. 32). Therefore,
HR should collaborate with Insurance firms on better and well-designed security and safety policies.
Role of HRM in Risk Management
HRM is the center of making a strategic decision and ensuring the development of key resources in the company. More focus is put on the management of security. Organizations need to strengthen security management for expatriates by:
- Implementing better and well-understood practices and security procedures with clear rules followed failure to which results in disciplinary actions.
- Carefully assessing specific security concerns of potential expatriates during the process of recruitment and the competencies of responsible employees for security-evaluated (Melissen, et al., 2016, pp. 23-42).
- Briefings and inductions should be done as well as giving training and security information prior to deployments. Individual conduct and behaviors are required from employees.
- Multinational organizations should brief staff upon return from duty especially those who have been exposed to critical incidences to reduce psychological distress (Melissen, et al., 2016).
- The organization should ensure they observe culture on risk management to ensure cautious and healthy working environment.
- The company should have better insurance and medical covers put in place to motivate employees in case of any danger.
- Employees need to understand the way they should behave while protecting themselves during their assignments in insecure places. This can be done through training, briefing and create security awareness programs. Good HRM can assist in developing a better training and briefing within the organization (Siddique, 2014, p. 220).
Conclusion
Risk management and employees are an integral part of the firm. Meaning, if handled well, they can help in increasing employee motivation, responsibility, productivity, morale, confidence, commitment and reduce employee turnover levels. This study focused on risk management for expatriates working in the hostile environment. This involved analyzing the characteristics of a hostile environment for employees in foreign countries, examples of hostile environment and strategies that can be used by organizations to make work environment safe for expatriates. HR must be careful and put more attention on the organization in order to understand causes of risk and ways of mitigating those risks. Understanding HRM and HR skills are essential for a successful relationship with people in reducing risks and challenges within the organization. Organizations can consider HRM as a strength and tool for effective risk management and satisfaction of employees in the working environment. It is clear that effective risk management and HRM require HR personnel to have unique skills to enable handle risky situations. These skills include communication, leadership, conflict management, evaluation, motivation, and training. Risk management practices are initiated by people (Malik, et al., 2014, p. 144). HR failures result in failure of best-planned RM strategies. Management succession results in risk. It affects financial and legal activities. This succession requires HR activities of the job description, analysis, training and motivation in order to help handle risks well. Risk management practices should foresee the possibility of employees’ calamities for better planning of risk management. More focus should be put on the management of security. Similarly, organizations need to strengthen security management by implementing better and well-understood practices and security procedures with clear rules to be followed failure to which results in disciplinary actions.
References List
Bader, B. & Berg, N., 2014. The influence of terrorism on expatriate performance: a conceptual approach. The International Journal of Human Resource Managemen, 25(4), pp. 539-557.
Bader, B., Berg, N. & Holtbrügge, D., 2015. Expatriate Performance in High-risk Countries: Influence of Family-related Stress. Academy of Management Proceedings, 13(1), pp. 105-15.
Bader, B., Schuster, T. & Dickman, M., 2015. CALL FOR PAPERS Special issue of International Journal of Human Resource Management. Qualitative Research, 6(1).
Baruch, Y., Dickmann, M., Altman, Y. & Bournois, F., 2013. Exploring international work: types and dimensions of global careers. The International Journal of Human Resource Management, 24(12), pp. 2369-2393.
Bianchi, E., 2015. Repatriation: reflections on organizational practices and its implications for individuals, around the globe. Gestão & regional date , 31(93), pp. 144-160.
Brewster, C., Bonache, J., Cerdin, J. L. & Suutari, V., 2014. Exploring expatriate outcomes. The International Journal of Human Resource Management, 25(14), pp. 1921-1937.
Collings, D., 2014. Integrating global mobility and global talent management: Exploring the challenges and strategic opportunities. Journal of World Business, 49(2), pp. 253-261.
Dabic, M., González-Loureiro, M. & Harvey, M., 2015. Evolving research on expatriates: what is ‘known’ after four decades. The International Journal of Human Resource Management, 26(3), pp. 316-337.
Driffield, N. & Jones, C., 2013. International business research and risky investments, an analysis of FDI in conflict zones. International business review, 22(1), pp. 140-155.
Fee, A. & McGrath-Champ, S., 2016. The role of human resources in protecting expatriates: Insights from the international aid and development sector. The International Journal of Human Resource Management, pp. 1-26.
Jackson, S. & Schuler, R., 2014. Linking Competitive Strategies with Human Resource Management Practices. The Academy of Management Executive, 1(3).
Malik, O., Abdullah, H. & Uli, J. A., 2014. The effects of terrorism on work attitudes and behaviors: a literature review and a proposed model. Journal of Aggression, Conflict and Peace Research, 6(3), pp. 143-163.
Marchington, M., 2015. Human resource management (HRM): Too busy looking up to see where it is going longer term?. Human Resource Management Review, 25( 2), pp. 176-187.
McNulty, Y. & Brewster, C., 2016. Theorizing the meaning(s) of ‘expatriate’: establishing boundary conditions for business expatriates. The International Journal of Human Resource Management, Volume DOI: 10.1080/09585192.2016.1243567.
Melissen, F., van Ginneken, R. & Wood, R. C., 2016. Sustainability challenges and opportunities arising from the owner-operator split in hotels. International Journal of Hospitality Management, 54(3), pp. 5-42.
Siddique, C., 2014. Job analysis: a strategic human resource management Practice. The International Journal of Human Resource Management, 15(1), pp. 219-244.
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