The two objectives of human resources are recruitment/retention and increased effectiveness. These objectives are obtained through personnel planning and staffing; personnel training; compensation; and gaining an understanding of labor-management relations.

Workforce quality is important in every stage of internationalism. In the early stages, the marketing and sales manager will be held responsible for initiating export activities. In the advanced stages, the focus of human resources will be on the needs of markets and functions. Appropriate placement of personnel is a key to success. With this in mind, human resources must use all available resources to attract the most qualified global managers. Candidate may come from internally, externally, or locally. In some foreign markets, firms will also hire expatriates which are home country nationals or third country nationals. This does however require additional training of personnel. An expatriate manager will have more responsibility than a manager in an equal domestic position. The manager must possess competence and adaptability.

Regardless of a firm’s effort to hire the best candidate, demographics will still play a major role in the selection process. Example of a personal characteristic that may be of importance based on the region are age and sex. As discussed in previous lessons, the culture of the host-country has to be respected.

Having an effective orientation program will help to overcome culture shock. The term culture shock refers to a reaction to psychological disorientation that people will feel when moved for an extended period of time to an unfamiliar culture. The four distinct stages of adjustment to a new culture are: initial euphoria – enjoying the novelty of a new environment, irritation and hostility – difficulty adjusting to cultural differences, adjustment – adapting to the new environment, reentry – readjustment to changed home environment.

In regards to salary of new hires, it is based on the qualifications, responsibilities, and duties of the new manager. A cost of living allowance (COLA) may be included in the compensation package in order for the employee to have a comparable cost of living as in their home country. A foreign service premium is a bribe given to managers as encouragement for the manager to leave his/her familiar environment. Whenever an employee is asked to relocate to an unstable environment, a hardship allowance may be given. Some firms also give its employees housing allowances. Payment of salary is most commonly made with part local currency and part host country currency. Non-salary allowances available to managers in order to ease the transition are relocation and travel reimbursement, paid temporary living and paid education expenses.

Due to the changing relationships between labor and management, the role of workers has grown to include self-management and involvement in decision making. Many programs have been implemented to improve the quality of work life for employees. The term quality of work life refers to corporate efforts to increase employee satisfaction and productivity through personal and professional development programs. These programs include flextime, quality circles and work-flow reorganization. Flextime gives workers the freedom to determine their work hours. Quality circles are a function of team building. It is an approach in which groups of workers meet on a regular basis to discuss productivity issues. Work-flow reorganization involves redesigning the job specific responsibilities in order to improve productivity.

The role of labor unions is different from county to country. This is because of the differences in local traditions. There have been many challenges for labor unions with the internationalism of business.