Human resource challenges for American multinationals in Venezuela

Human Resource Challenges Facing Multinational Entities

Human Resource Challenges American Companies in Venezuela Encounter

To remain competitive, U.S. firms, and indeed other global firms, have found it necessary to venture to other markets. Although, there are numerous benefits to be reaped from such a move, global companies often have to contend with a number of challenges. Some of these challenges have got to do with the hiring of both local and expatriate talent. This text highlights some of these challenges -- in the Venezuelan context.

Challenges in Attracting and Retaining Local Talent

Skill Barrier

To begin with, one of the most significant challenges American multinationals encounter in Venezuela is skills gap. Unlike their counterparts in the U.S. not many Venezuelans possess the skills necessary to run or manage specialist functions of a U.S. multinational subsidiary. Indeed, this is one of the key reasons that could motivate American companies to 'export' talent from their home country. It should also be noted to be able to compete effectively, American companies could be forced to invest in the training and development of local talent. This is an undertaking that could turn out to be rather costly for the company involved.

Communication Challenges

Spanish is the official language in Venezuela (CIA, 2014). The U.S., on the other hand, is a predominantly English speaking country. In that regard, therefore, communication between the head office in America and the subsidiary in Venezuela could become rather difficult as a result of the said language barrier. As a matter of fact, this particular issue could lead to instances of wrong interpretation of messages originating from either country.

Remuneration

According to the U.S. Department of State (2014), Venezuela maintains a strict currency control regime. As the U.S. Department of State (2014) further points out, "the official exchange rate overvalues the local currency (Bolivar) vis-a-vis the U.S. dollar, creating distortions…" Setting up an appropriate employees' salaries and benefits plan could prove challenging.

Challenges in Attracting and Retaining Expatriate Talent

Language and Cultural Barrier

Venezuelan culture is distinct and different from that of the U.S. An individual sent from the U.S. To serve in any capacity in the Venezuelan subsidiary may not necessarily have the cross-cultural skills required to succeed in that context.

Security Concerns

An American company also ought to guarantee the security of those it seeks to send to Venezuela. With the ongoing antigovernment mass protests in the country, the safety of employees (especially foreign nationals) cannot be guaranteed. According to the BBC (2014), the protests have left dozens of people dead.