What are third country nationals typically selected for hire in an international company?
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Article Preview : Volumes have been written about the management of expatriates. And there is a growing interest in the effective employment of nationals of countries in which global companies have operations. But practitioners and academics alike have treated lightly the
unique role of third country nationals (TCNs) in the international work-force. To the extent that authors and researchers have covered the subject, the focus has usually been on compensation and benefits. The objective of this article is to examine how companies in various stages of globalization and headquartered in different countries and regions utilize TCNs, to explore their strengths and weaknesses relative to other groups of employees, to suggest strategies for capitalizing on their
unique strengths, and to assess their importance in the globalization of organizations. Third Country Nationals A third country national, as the term is used here, is an employee, working temporarily in an assignment country, who is neither a national of the assignment country nor of the country in which the corporate headquarters is located. An example is a Spaniard transferred from Spain by an American headquartered company to be Managing Director of a subsidiary in Argentina.
Excluded from this definition is the hiring locally by a subsidiary in Argentina of a Spaniard living permanently in Argentina. It also excludes foreign nationals assigned to headquarters. The distinction here is that the employer is participating in the management and development of TCNs outside their home and the headquarters countries. Reasons for Third Country Nationals It is unusual to find TCNs in a newly emerging multinational. When a company opens its first one or two
overseas operations (whether it is a bank opening its first branch in London, a manufacturer building its first factory in Taiwan, or an exporter opening its first sales office in South Africa) it will invariably staff the operation(s) with a combination of qualified nationals it can find locally and a limited number of parent country nationals (PCNs). It will not hire a search firm to look for a German to set up a subsidiary in India. PCNs are employed primarily to represent the company's
interests and to transfer corporate technologies and competencies. A new employee, particularly a national of another country, could not be expected to understand and transfer corporate culture or practices. Low-cost Substitutes Typically, the first TCN is employed when a company has a few foreign operations and decides to open yet another. It is at a point when the company is opening a new branch in a new location and has a choice between sending another expatriate from headquarters or transferring an employee from another existing overseas operation. It is when a North American multinational has a well developed organization in France and decides to open a new subsidiary in the Cote d'Ivoire. Should we transfer an American or a French employee to organize and manage the sales department in Abidjan? An American is often presumed to have a better appreciation of corporate culture and as such, may be considered to be a... Get Full Access Gale offers a variety of resources for education, lifelong learning, and academic research. Log in through your library to get access to full content and features! Access through your library Copyright: COPYRIGHT 1997 Human Resource Planning Society Source CitationGale Document Number: GALE|A19419211 It is interesting times, as the business world is constantly struggling to find solutions to the VUCA ( Vulnerable, Uncertain, complex and ambiguous ) environment. As a member of a global Recruiter Network, I am plugged in-courtesy my extended network-to some of the best practices, as companies are changing tacts to deal with the scarcity of Top Talent. And as the HBR article alludes, the three forces "Globalisation, Demographics & Pipelines" are likely to make senior talent ever scarcer in the years to come. The article "Mastering the art of foreign staffing" based on the research by Sebastian Reiche and Anne-Wil Harzing (of the Instituto de Estudios Superiores de la Empresa at the University of Navarra in Spain.) highlights several influential trends in multinational staffing. 1. PCN (Parent-country nationals) are employees whose nationality is the same as that of the firm headquarters — for example, a German employee of a German company who is working at a Chinese subsidiary. 2. HCN (Host-country nationals) are employees who have the same nationality as the local subsidiary. This could be a Chinese employee working at the Chinese subsidiary of the German company 3. TCN (Third-country nationals) are employees whose nationality is different from that of either the headquarters or the subsidiary office. In the above scenario, this might mean an Indian employee working at the Chinese office of the German company. Culture eats Strategy for breakfast, it is said! As a person closely working with companies hiring for middle and senior management in India, I have been increasingly noticing that the days of expats being seconded to run operations are passe'. -Some prefer to hire 'returning Indians' ie people of Indian origin but with international experience in the domain-as they have best of both worlds. The grounding overseas helps empathise with the accepted culture-and the 'roots' perhaps help in looking at the roles for a longer & more effective tenures. -Some others are pro-actively building the pipeline for 'succession planning', so that the local Indian Managers -can take over in a couple of years, after being closely mentored by the expats deputed-who are seconded from their parent companies. -Interestingly some companies are increasingly looking at India- not just as a market for consumption, but also as a market place for sourcing global talent- as they groom 'future ready leaders'. -And yes, there are " growing number of “inpatriate” assignments, in which foreign-subsidiary managers are sent to corporate headquarters for a fixed amount of time, reversing the typical expatriate assignment of the past.!! Harzing also quotes "One future challenge for human-resources departments will be linking international assignments more directly to organisational career paths, capitalising on the experiences and skills developed during transfers." Well, there is a flipside to it to. With the onus of careers now in the hands of the supply side, I feel every professional now has the world as her/his playground-and make up the mind -of being at the right place at the right time. I am tempted to start a series of blog posts on the kind of global opportunities that are available across the globe-at the moment. Perhaps -at least in the 29 countries my worldwide network is privy to!! Till next time :)! What is a thirdA third-country national (TCN) is an individual who meets the following criteria. (1) Is neither a citizen of the United States nor of the country to which assigned for duty. (2) If employed, is eligible for return travel to the TCN's home country or country from which recruited at U.S. Government expense.
What are the benefits of hiring third country nationals?The main reason why companies use third-country nationals as a staffing strategy is the ability of a candidate to represent the company's interests and transfer corporate technology and competencies. Sometimes the best person to do this isn't based in the United States or in the host country.
What are 3rd country citizens?Third country national (TCN) is a term often used in the context of migration, referring to individuals who are in transit and/or applying for visas in countries that are not their country of origin (i.e. country of transit), in order to go to a destination country that is likewise not their country of origin.
Why do companies favor third country nationals for overseas assignments?American companies often seek tcns from other english speaking countries to avoid the double taxation costs of their american managers.
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