Multinationals constantly encounter numerous challenges when entering new markets. One of the critical decisions the management of the corporation has to decide is the human resource composition. Different countries have distinctive labor and social practices that may be twisted to disadvantage some groups of people, especially women. Siegel et al. (2011) indicates that multinationals operate on an international scale. Therefore, they can borrow the best practices that can be applied across the area they serve. One way that engenders competitive advantage is aggressively hiring talented members of underrepresented or excluded social groups.
Multinationals can better understand and connect with diverse customer segments by recruiting and hiring members of disadvantaged social groups. The appeal to a broader customer base is supported by the growing desire for society and businesses to promote diversity, equity, and inclusivity within company operations. Additionally, Siegel et al. (2018) state that a diverse and inclusive workforce can enhance employee morale and performance, which translates into improved financial outcomes. A diversified workforce breeds competition that inspires employees to become more innovative and make better and more effective decisions touching the business (Siegel et al., 2011). The workforce will also involve a cultural and social mix of people that promotes employee engagement and retention. Such interactions make the employees feel that they are part of a global community and that their contributions are valued (Siegel et al., 2018). They will choose to be more engaged in work and prefer to stay with the company for the long term. Multinationals that are seen as promoting diversity and inclusion can further benefit from improved brand image and reputation, which can lead to increased customer loyalty and a higher ability to attract top talent.
Furthermore, hiring from excluded social groups can help a multinational to build stronger relationships with customers and other stakeholders. This is because the company will be better placed to understand and respond to the needs and concerns of the communities where it operates. Such a move will also help a multinational to comply with laws and regulations related to equal employment opportunities and affirmative action. There will further be an access to a larger pool of talent to recruit from a broader range of qualified candidates, which will improve the ability to find the best fit for open positions (Siegel et al., 2018). Hiring from excluded social groups could also help multinationals mitigate certain business risks. Companies perceived as fair and inclusive tend to be less vulnerable to social and political risks.
However, it is essential to note that achieving competitive advantages by recruiting from excluded social groups should be all-encompassing. A multinational must create and promote an inclusive culture and provide openings for development and advancement. The multinational will be better placed to understand and observe cultural, legal and social differences. Siegel et al. (2018) state that the approach will ensure a company does not use the same approach in all their different subsidiaries or branches as it could cause more harm than good. In addition, a multinational should go over employment and implement robust measures to create an inclusive culture and ensure that all employees are treated fairly and equitably.
In conclusion, many potential benefits can be gained from aggressively hiring talented members of excluded social groups. A multinational corporation will embrace diversity, equity, and inclusivity principles that will create competitive advantages in legal compliance, improved performance, and stronger cultural and employee relations. However, the multinationals should consider the approach and consider it a strategic value even as the aim is to create a truly inclusive culture.
References
Siegel, J., Pyun, L., & Cheon, B. Y. (2018). Multinational firms, labor market discrimination, and the capture of outsider’s advantage by exploiting the social divide. Administrative Science Quarterly, 64(2), 370–397. Web.
Siegel, J. I., Xi, M., & Poliquin, C. (2011). Baxter’s Asia Pacific “Talent Edge” Initiative. Papers.ssrn.com. Web.