International Human Resource Management (IHRM) is the term used for organisations that manage their human resources activities at an international level. IHRM includes ‘typical’ HR functions such as recruitment, selection, performance management, training and development, and remuneration, however these are analysed and/or managed at an international level (e.g. companies may advertise positions globally or update their policies following a review of international best practice).
Furthermore, IHRM may also encompass additional activities such as expatriate management, multiple industrial relation activities (e.g. varying international collective agreements/employment contracts to meet differing country legal and tax requirements), global succession planning and so on.
Essentially, IHRM concerns the global understanding or management of HR activities within an organisation. More specifically there are three broad approaches that relate to IHRM:
- Strategic or cross-cultural IHRM: managing HR practices within any organisation from an international perspective (e.g. consideration of global trends, talent etc)
- Comparative IHRM: any organisation seeking, describing, comparing and analysing HRM systems and practices in various countries (e.g. review of industrial relations or HRM theories to assist in HR policy development)
- Multinational enterprises (MNE) focus: management of HR activities for organisations that have offices, and employees or representatives spread across two or more countries.
IHRM typically applies to MNEs, and in turn the focus of AHRI’s guidelines on IHRM are around MNEs. Many of the same principles apply to and overlap across all three approaches. I.e. MNEs would need to consider cross-cultural management, and would likely undertake a systems analysis when updating their HR activities.
There are many factors a MNE must consider when deploying and engaging staff across different countries and regions. Tax regulations, industrial relations, law, immigration and culture are examples of some of the additional issues MNEs face when managing human resources across international boundaries. In turn it’s essential that an organisation have a clear purpose and objective to its international assignments, and be well prepared to manage anything that comes of an international assignment.
(Information adapted from: De Cieri and Kramar et al, 2008, Human Resource Management in Australia, McGraw-Hill)