Many companies have operations in foreign countries. Therefore, human resource management truly takes place on an international scale. There are HR issues that organizations must address in a world of global competition. The global nature of business is affecting human resource management in modern organizations. Global differences among countries affect an organization’s decisions about human resources including planning, selection, and compensation. There are also best practices for managing employees sent on international assignments.

Most organizations function in the global economy, meaning HR departments are serving an international workforce. Organizations that operate globally are very likely to employ citizens of more than one country, so they need to understand the laws and customs that apply to employees in those countries. They may have to prepare managers and other personnel to take international assignments. They have to adapt their human resource plans and policies to different settings and communicate them to its international workforce.

Most organizations begin by serving customers within a domestic marketplace. The business must recruit, hire, train, and compensate employees, and these people usually come from the business owner’s local labor market. As organizations grow, they often begin to meet demand from customers in other countries, and eventually it may become economically desirable to set up operations in foreign countries. They needs to hire managers who can function in a variety of settings, give them necessary training, and provide compensation systems that take into account the different pay rates, tax systems, and costs of living from one country to another.