CHAPTER 9

Ethical Considerations in International Recruitment Using Branding Strategies

Thomas G. Pittz

University of Tampa

Steven F. Pittz

University of Colorado at Colorado Springs

Introduction

This chapter elucidates the practical and ethical dimensions of international recruitment efforts in concert with branding strategies. As the requisite supply of skilled labor often resides outside of a company’s geographical area, the result is a need for international recruitment. International recruitment impacts developed and developing nations alike, and we believe that a thorough evaluation of such impact is essential to an ethical understanding of this important issue. We explore and discuss international recruitment from a practical and academic standpoint and propose several possibilities for guiding an ethical pedagogy. We first assess the state of current international recruitment scholarship and then employ the findings from this research to suggest an appropriate method of ethical instruction.

There is a relative paucity of literature in the field of management surrounding the ramifications of branding by nations and employers on international recruitment efforts. Three gaps in current scholarship are particularly notable. First, the preponderance of literature relevant to the ethical considerations of international recruitment is located within the bailiwick of public policy or within industry-specific academic journals (e.g., medical journals) and is conspicuously absent in management scholarship. Second, the notion of employer branding is in a nascent stage of development and its impact has not been considered on international recruitment efforts. Third, the concept of nation branding has only recently been addressed within marketing research and has not yet been explored by the human resource and recruitment literature.

Since organizational perception is a key factor in attracting prospective employees,1 we make the case for an evaluation of branding efforts by both international firms and the nations in which they reside. Additionally, we contribute to human resource, recruitment, and ethics literature streams by stressing the ethical considerations of international recruitment efforts on developing economies. This chapter also extends the recent work on employer branding within management scholarship to consider national image and reputation in the recruitment of international employees. Much of the ethical focus on this topic has been at the individual level regarding migrants pushed into the international labor pool by structural poverty with relatively scant attention being paid to those employees who are actively recruited. In an age of ever-extending reach of technology and growing global competition for resources of all kinds, recruitment proficiency has become a critical component in a company’s struggle for competitive advantage.

More importantly, responsibility for instilling ethical awareness in the field of international recruitment falls on professional bodies and includes universities. As the preeminent forum for public inquiry and discourse, the university provides instruction that trickles down to both corporate HR departments and public policy debates. How universities teach international recruitment is a key driver of how future leaders in business and public administration will manage such efforts. Future academic instruction and research can hope to better understand this issue and suggest improved methods of instruction and training that promote awareness of the ethical issues surrounding international recruitment.

International Recruitment: A Description of the Discipline

A recruiting system must be established when a workforce requires either expansion or replenishment.2 Recruiting efforts are generated through planning systems such as talent inventories, forecasts of workforce supply and demand, and control and evaluation systems. Organizations that fail to make recruitment a priority fare poorly in the competition for talent.3 The first step in a recruiting process is to utilize internal resources in the search for qualified candidates. However, in many cases, organizations turn to external sources to fill jobs whose specifications cannot be met by present staff.4 In the modern global economy, positions that require a highly skilled or specialized workforce often result in a search for external candidates that crosses international borders. Thus, recruitment proficiency is a feature of many models of international human resource management including that of Taylor et al.,5 which emphasizes human resource practices and expertise as organizational competencies that multinational corporations use to enhance their competitive position.

Previously, the labor market—the geographical area where labor supply meets demand—was local and employers focused on developing internal employees brought into an organization at lower levels and promoted through increasingly responsible positions. In recent years, however, internal labor markets have been weakened, such that high-level jobs have not been restricted to internal candidates and employees have been hired from outside of the company at virtually all levels.6 To demonstrate, a recent Forbes article7 illuminated the growing number of applications for H-1B Visas from U.S. knowledge-based companies (issued for temporary sponsorship of foreign workers) and highlighted Microsoft (4,067 foreign employees), IBM (6,190 foreign employees), and Infosys (15,800 foreign employees) as key employers of international workers. The expansion of the labor market has put even more priority on recruiting systems that can stretch the bounds of hiring by attracting talent from around the globe.

A variety of theoretical explanations, with different assumptions, perspectives, and units of analysis have endeavored to explain why international migration begins. A brief survey of such explanations helps us to set the stage. Neoclassical economics8 focuses on wage arbitrage, employment conditions, and migration costs and generally considers migration as an individual decision precipitated by income maximization. Human Capital Theory9 treats migration as an investment decision where the potential returns of the destination region are considered net of the discounted costs of movement. More recently, Mincer10 examined the migration decision as a family matter and Bauer11 utilized a network approach that discounted the movement costs by the presence of friends and relatives in the migration location. World systems theory12 and Dual Labor Market Theory13 focus on higher-level forces of economic globalization and structural requirements of modern industrial economies, respectively. According to Priore,14 immigration is caused predominately by pull factors (a need for foreign labor and that ability to attract it) versus push factors (low wages or high unemployment). It should be noted that our focus in this discussion of international recruitment is on what Urzua15 calls “mobility” migrants who are recruited from abroad as opposed to “survival” migrants who are pushed into the international labor pool by structural poverty. This work presents and addresses the particular ethical ramifications of international recruitment efforts aimed at these “mobility” migrants.

If internal and external business strategies are to be developed in conjunction with human resource departments,16 then the future of multinational corporate competitiveness is contingent upon its ability to adapt resources to the broadening global playing field. As a result, the labor market of today transcends national bounds and attracting talent has taken on a decidedly international flair. To use a local example, global engineering firm CH2M Hill, based in Colorado, hired 400 employees from the Middle East in 2012 alone.17 Previous management research in this vein has addressed a wide variety of international human resource considerations including the impact of corporate culture (ethnocentric, polycentric, and geocentric) on recruitment practices,18 frameworks for understanding strategic international human resource management,19 and the identification of exogenous and endogenous variables.20 Expounding the various conclusions found in this literature is outside the purview of this chapter, but we wish to emphasize that previous research in this area has not directly addressed the ethical questions surrounding international recruitment.

Branding for International Recruitment

Whereas recruitment was historically viewed as a one-way process of prospecting21 where firms search for prospective employees, in practice, however, employees seek out firms with every bit as much diligence as the organizations themselves. At the first stage of the recruitment process, characteristics of the recruiters themselves (e.g., informative, well trained, personable) affect the perceptions of job candidates. More influential on applicant attraction than recruiters themselves, however, is organizational image.22

The two-way perspective of recruitment requires a mode of communication where firms and potential employees can interact. This meeting place can take the form of social networks, employer’s website and public communication, referrals, traditional advertisement, and the like. Rich research exists in the realm of organizational branding that discusses various factors such as attitudes to employer websites,23 employee testimonials,24 and organizational brand awareness.25 This stream of research examines ways in which organizations can design activities to better identify and attract potential employees such as job advertisement content26 and advertised diversity policies.27 Applicants’ perceptions have been shown to be the strongest predictors of the intention to accept a job28 and companies have expended considerable resources to improve their image to prospective employees. It has become evident in both research and practice that a focus on organizational branding is paramount to successful recruitment efforts.

Employer branding is an activity that engages marketing principles and applies them to HR activities where organizations carefully craft and manage the perception of the “employee experience” to current and potential employees.29 One of the early definitions from Ambler and Barrow30 refers to the concept as “the package of functional, economic, and psychological benefits provided by employment, and identified with the employing company.” Organizations attempt to differentiate this “package” from competitors and it is suggested that demonstrating unique aspects of organizational identity or image can help to achieve this differentiation.

Such efforts to attract employees are not limited to firms. Nations engage in similar behavior, branding themselves to pull in potential immigrants. While previous scholarship has lamented the scant attention that has been paid to how employers influence the incorporation of immigrant labor,31 most studies have ignored the role of the state in the recruitment process altogether.32 Beyond economic gains, it has been shown that employees migrate based on an expectation of a better life abroad.33 An important variable in the calculative decision of whether or not to migrate is the desirability of living in the new nation-state itself. Pure financial compensation is relatively easy for a migrant to analyze in an employment decision. In seeking a comparative edge, therefore, the focus of branding efforts by employers and nations is largely placed on lifestyle considerations.

As employees search for work abroad, their perception of the nation within which the job resides is often as influential as their perception of the employer. As recently as 2011, the World Economic Forum has recommended the utilization of nation branding strategies to entice foreign workers to migrate.34 Scholars have also begun to create frameworks for creating and positioning nation brands.35 Practical application remains in a nascent stage, however, as research has indicated that “in the more successful instances of nation branding, the focus seems to be more internal than external—that is, more attention is directed to how the nation perceives itself than to how the nation is perceived by outsiders.”36

Nation branding is not an entirely new concept, however. Nations have always used flags, anthems, mythologies, and other symbolic forms to mark their sovereignty. In today’s fast-paced and media-savvy world, that has resulted in the employment of design, marketing, and public relations professionals to craft a global image. “Branding not only explains nations to the world but also reinterprets national identity in market terms and provides new narratives for domestic consumption.”37

Territorial entities such as cities, regions and countries are now also being branded like companies and products. The corporate brand has become an essential part of business identity, helping audiences identify with the company and—lest we forget— encouraging them to buy its products and services. In a similar way, territorial branding is seen as essential in creating value in the relationship between territorial entities and individuals. (van Ham 2002, 250)

The branding effort put forward by nation-states is an important piece of the international recruitment landscape. Yet, it also presents ethical challenges. As one of the key strategies to attract prospective employee talent, the ethical considerations of two-way recruitment strategies are many and varied. A key question for nation and organizational branding is: when does “putting your best foot forward” cross the ethical line to mis-representation? Whereas the ethical considerations of prospecting-based recruitment are rather easily identifiable (job and wage transparency, the measurement of diversity metrics, etc.), the ethical components of the two-way approach where the reputation and branding of a firm play a key role are more difficult to evaluate.

Ethical Dimensions of International Recruitment

Today’s global marketplace includes more wide-ranging geographic labor markets than ever before. Thus, the process of recruitment of top talent internationally introduces ethical considerations that are more salient than before. Before assessing the ethics of recruitment, however, we need to discuss the scope of the practice of recruitment and of “mobility” migration itself. While the practice of international recruitment has economic benefits for both the foreign employee and the host firm, the news for all stakeholders has not been good.

Since the 1960s scientists, physicians, engineers, and other top professionals from developing countries have routinely migrated from their home countries to find work in the United States, Canada, and Western Europe. Data from the 1990 Census show a striking feature of U.S. immigration policies: Only 500,000 of the 7 million immigrants into the United States have a primary school education or less.38 During the decade covered by the Census, the Philippines lost over 700,000 migrants to the United States with a secondary education or better, Korea lost over 300,000, and 60 percent of the migrants from Egypt, Ghana, and South Africa to the United States have a tertiary school education or better. Even more alarming is the finding that a number of countries—especially small countries in the Caribbean, Africa, and Central America—lost more than 30 percent of citizens with a tertiary school education to migration.

A study by Scott et al. demonstrates that recruitment by wealthy countries of health personnel from developing countries is threatening the viability of crucial health programs in poor countries, particularly in sub-Saharan Africa.39 The migration from these countries severely limits the provision of even the most basic health services infrastructure.40 Additionally, in 2001, the South African High Commissioner to Canada criticized that nation for the relatively high number of South African physicians being recruited to Canada at a time when South Africa’s own health care system was struggling.41 Since the United States is anticipating a shortfall of nursing professionals of nearly 500,000 by 2015,42 the concerns over the migration of skilled health care workers from lesser-developed nations is especially poignant.

Most critical scholarship on the topic of international recruitment has focused on the motivation of employers to seek out the cheapest source of labor and the exploitation of immigrant workers.43 However, another major advantage of foreign migrant labor is that the cost of the reproduction of this labor (health care, housing, education, etc.) is borne by another social system.44 The loss of this educated work force in developing countries not only adversely impacts international competitiveness but also causes direct economic disadvantage when wealthy countries reap the benefits.

Thus, large questions remain unaddressed by scholars and practitioners of human resources alike. What are the ethical implications regarding the sometimes-aggressive recruiting tactics aimed at stealing away top talent from competing nation-states? How should such tactics be evaluated in light of the potential removal of a critical human resource in a developing economy? Does this represent the equivalent of labor piracy,45 utilized by developed economies when resources cannot be easily developed internally nor acquired in the traditional labor market? It is our contention that this question is not merely a public policy issue but that corporate human resource departments ought to bear some responsibility for producing international recruitment policies that consider the needs of the nation of origin for prospective employees.

Developing Versus Developed Country Perspectives on International Recruitment: A Free International Marketplace or Brain Drain?

As theory and practice surrounding employer-branding initiatives has begun to crystallize around its positive effect on recruiting top local talent, the next step is to consider the implications for the host nation in the process of international recruitment. As employers strive to present an enticing image to attract potential employees and a differentiated “package” of benefits in their workplace, nations are beginning to do likewise. One of the earliest examples of nation branding, “Cool Brittania,”46 aptly demonstrates the lifestyle and cultural advantages to life in the United Kingdom. The result of increasing international recruitment efforts has been an unprecedented flow of skilled labor across international boundaries in general, and from developing to developed economies in particular. Assessment of these labor flows is complex and the outcome is likely to vary greatly depending on whether the assessor is positioned in a developing or developed country.

For example, a manager in a developed country is likely to point out that freedom of movement across borders is essential, both as a key ingredient of a free international market and as a basic human right. She may claim that not only does free movement of labor lead to greater economic efficiency overall, it also realizes the individuals’ right to pursue what is in her rational self-interest. Moreover, exchange of labor may include other desirable outcomes of cross-cultural exchange more generally since globalization brings diverse groups together in a way that increases the cultural and aesthetic bounty within singular countries.47 For example, consumers from areas as geographically distant as the United States, China, Australia, or Brazil can enjoy listening to Cuban-African music and walking on Persian or Navajo rugs, products that would not have existed without the “cultural contamination” brought about by migration.48

A manager in a developing country, by contrast, is likely to perceive the international flow of labor differently. The manager will likely discuss the difficulty of growing essential sectors of the economy without skilled labor, and may highlight the fact that the loss of such workers is especially acute in crucial areas such as healthcare, education, and the research, design, and manufacturing of high-end goods. Playing catch-up to developed countries is a difficult-enough proposition, and attempting to keep pace while regularly losing skilled labor only widens the gap. Moreover, the manager may lament the fact that the resources devoted to implementing the social systems in his country are being wasted on people who are likely to move when a foreign opportunity arises.

The question for scholars and human resource management alike is whether this “brain drain” is merely a public policy issue or if recruitment policies ought to be scrutinized for their role in exacerbating the process. It can be argued that with increased importance afforded to the recruitment system comes a need for increased vigilance for macro- and microethical considerations of recruitment both locally and internationally. Another important consideration is whether recruitment policies that emphasize collaboration and sustainability can be introduced to replace, or at least augment, the recruitment systems that focus on prospecting and yield ratios.

Strategy for Teaching

We believe that teaching students about the ethical ramifications of international recruitment is best achieved through creating awareness of its effects on countries with developing economies. A successful teaching approach is to engage students and managers with ethics-based case studies in order to challenge conventional wisdom and expose gaps in current ethical thinking. We encourage teachers to apply ethical theory to particular cases, either drawn from literature, film, biography, or current events. We suggest that teachers and students acknowledge that they are members of society and, as such, cannot help but have feelings and thoughts about ethical situations. Sharing personal beliefs may create a comfortable environment for sharing thoughts, as the teacher becomes just another person struggling with ethics. In other words, educational institutions and students will benefit from an open-ended discussion regarding international recruitment that makes a conscious choice among ethical alternatives—just a system that we would advocate for in the businesses that we study.

Suggested Classroom Exercise

Following is a case study example created by the authors of this chapter, which has been used within major business and public policy schools in the United States. It was chosen for its impact and brevity as it can be easily accomplished in student groups or individually within a one-hour class period. Consistent with the Principles of Management Education (PRME) initiative, this case presents a form of experiential learning in which students may take on a “real-life” scenario in order to apply course principles.49

Classroom Exercise for Teaching Ethical International Recruitment

A large virtual health care company (KelsRusto) is undergoing a process of significant expansion and requires a large influx of new, highly skilled medical workers to work out of company headquarters. This represents a significant challenge to the expansion plans, however, since the headquarters are in a small region of a small country where there is minimal skilled labor available to hire locally. KelsRusto has invested far too much money, resources, and time in developing a strong relationship with the local community to consider relocation at this time.

Top management at KelsRusto has made the decision to recruit talent from around the globe to fill the need at corporate headquarters. To do so, they have contracted with a major advertising company to develop a plan to attract foreign workers. The goal is to “build a brand” that shows off the company’s attractive compensation package, exciting work, beautiful facilities, and highlights the many activities and entertainment options in the local area.

The advertising firm and the marketing department have identified several plausible locations to concentrate recruiting efforts. These locations were consciously chosen due to either a surplus in highly skilled medical workers or sufficiently low local wages to convince skilled workers to relocate for an improved standard of living. The proposal is to target the following nations with recruiting efforts: Japan, Ghana, Philippines, Haiti, United States, Portugal, and Tanzania.

As the head of human resources for KelsRusto, you have the opportunity to evaluate the proposal, offer suggestions, and, ultimately, personally direct the international recruitment efforts. What will you do?

Assignment Questions:

  1. Describe the ethical dilemma(s) in this situation

  2. Is there more to these decisions than is described in the text?

  3. Who are the major stakeholders affected by the decisions?

  4. Which country identified meets which recruitment criterion as outlined in the case (labor surplus or low local wages)?

  5. What are the ethical implications of a corporation “building a brand” in order to attract workers?

  6. Does the country where KelsRusto is located matter in this case study?

  7. Identify at least one ethical alternative to this decision with the potential to satisfy all stakeholders.

Advice for Teachers

The students should be able to recognize the primary ethical dilemma in this case: the difference between recruiting vital medical talent away from communities where health care is adequate (e.g., the United States and Japan) and recruiting from areas where health care is substandard (e.g., Haiti, the Philippines, and sub-Saharan Africa). Further discussion could involve whether the costs of educating skilled workers that are born by underdeveloped nations for employees who subsequently migrate serve to stifle economic development in those nations. What, if any, recognition of these costs should KelsRusto bear responsibility for? What about the country in which KelsRusto resides?

The nation in which KelsRusto is located was intentionally omitted from this case study in order to generate additional classroom conversation. Once the building of the corporation’s brand has been discussed, guiding the students through the question of whether location matters is useful. Most will answer in the affirmative to question #6 and follow-up discussion can focus the class on why location matters. Choose a few options for corporate headquarters to allow students to explore their own biases and effects of “branding” of nations through the media, education, and so on.

This exercise is also likely to bring up the notion of corporate ethics. Is the sole ethical goal of a corporation to increase value for its stakeholders? Does the corporation bear some social, environmental, or community responsibility as well? Do the tenets of the free market dismiss the ethical ramifications in this case? If an employee has the opportunity to relocate to better the conditions for his family, would it not be ethically responsible for him or her to migrate? Would it not be an ethical violation for the recruiting company to restrict that possibility?

Astute groups of students may recognize that KelsRusto is a health care company that conducts virtual business. In theory, this means that employees could have the possibility of working remotely. A diligent HR manager could work with top management to establish a program that enables employees to spend a certain percentage of their time in their home country while still providing KelsRusto with the opportunity to acculturate them properly.

Summary and Conclusion

In this chapter we have discussed how branding efforts by firms and nations are of paramount importance in projecting a desirable image to attract potential employees. Our goal has been to assess the impact of international recruitment using branding strategies, and then to raise ethical questions surrounding the practice. The data suggest that developing nations lose a substantial portion their educated labor force to international recruiters and that this curtails their global competitiveness. Despite attention to the concerns of labor migration by public policymakers and scholars, the ethical considerations of corporate international recruitment policies have been largely unaddressed in the management and human resource literature.

As nations attempt to brand themselves in order to recruit more and more educated foreign workers, it may be time to ask some difficult questions: Does a company that does business internationally have an ethical obligation to citizens of the global community at large? Does that company have an ethical obligation to the development of local talent in their immediate labor pool? What of the ethical compromise involved in colluding with competitors to not recruit top talent, thereby depressing the wages of the marketplace for specific skills?

These are some of the many ethical questions to be answered by future research in recruitment both locally and internationally. The answers to these questions are likely to be multifaceted, and are likely to depend on where one “sits” in the global economy. The case study and advice for teachers in this chapter offer an opportunity to ask and answer some of these difficult questions in the classroom. The answers may not be definitive or come easy, but the real achievement will be in educating new-generation managers who know which questions to ask and where the potential answers might lie. It will fall to such managers to apply ethics to the real-world situations that they encounter. Preparing students to consider the ethical issues involved in recruitment beyond the local labor market is an important aspect of research and practice in the 21st century.

__________________

1 Rynes and Cable (2003).

2 Cascio and Aguinis (2005).

3 Chapman et al. (2005).

4 Stigler (1962).

5 Taylor, Beechler, and Napier (1996).

6 Bidwell (2011); Cappelli (1999).

7 Forbes (2015).

8 Smith (1776); Ravenstein (1889).

9 Sjaastad (1962).

10 Mincer (1978).

11 Bauer (1995).

12 Portes and Walton (1981).

13 Priore (1979).

14 Priore (1979).

15 Urzua (1981).

16 Legnick-Hall and Legnick-Hall (1988).

17 www.workforce.com (2013).

18 Caligiuri and Stroh (1995).

19 Schuler, Dowling, and De Cieri (1993).

20 DeVaro (2003); Holzer (1987).

21 Kristof (1996).

22 Rynes and Cable (2003).

23 Williamson et al. (2010).

24 Walker et al. (2009).

25 Allen, Mahto, and Otondo (2007).

26 Highhouse et al. (1998).

27 Williams and Bauer (1994).

28 Chapman et al. (2005).

29 Edwards (2009).

30 Ambler and Barrow (1996, 187).

31 Chavez (1992); Lopez-Garza (2001).

32 Rodriguez (2004).

33 Papademetriou and Martin (1991).

34 The Global Competitiveness Report (2011–2012).

35 Silvanto and Ryan (2014).

36 Olins and Hildreth (2011, 56).

37 Jansen (2008, 2).

38 Carrington and Detragiache (1999).

39 Scott et al. (2004)

40 Scott et al. (2004).

41 McIntosh, Torgerson, and Klaseen (2007).

42 Ahmad (2005).

43 Su and Martorell (2001).

44 Burawoy (1976).

45 Pittz and Adler (2014).

46 https://en.wikipedia.org/wiki/Cool_Britannia

47 Cowen (2002).

48 Cowen (2002).

49 Alcaraz and Thiruvattal (2010).

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