The term human resources refers to the collection of the individuals that form the workforce of an organization from upper management to the janitor that cleans up at night when employees conclude their work at the end of the business day. Human resources are sometimes referred to as assets as they are a tool that is used and utilized to achieve the company’s success, (Heithfeild). Like all assets, there exists a need to manage these human resources to achieve the maximum utilization; although, it is quite difficult when assets have feelings and there is a psychological aspect that makes managing human resources one of the most difficult tasks of management.
As we move towards a more globalized and more flattened world, the need for international human resources management increases. What makes international human resources management more complex than domestic human resources management is the diversity of the world whether it is regulations, culture, religion, or language. In IHRM, companies run into more external factors that define how the workforce is selected and/or replaced, (Rioux, Ph.D., Bernthal, Ph.D. & Wellins, Ph.D.). For example, there are stricter practices regarding replacing a workforce in the US compared to other countries in the world. Such laws are designed to work in favor of employees than the employer in the US like unemployment liability and equal opportunity employment regardless of gender, race, age, looks, etc., (Rioux, Ph.D., Bernthal, Ph.D. & Wellins, Ph.D.). In a way, IHRM may engage in HR practices in a host country that might violate the business code of ethics in a country like Saudi Arabia where the two genders are segregated in the workplace which may limit the company’s diversification of workforce gender-wise.
Another factor that may further contribute to the complexity of IHRM is the cultural differences across the