Question

What is meant by the globalization of human capital? Is this inevitable as companies increase their global operations? How do? And why?

Answer 1

Meaning of Globalization of human capital:-

• Globalization is the integration of different countries of the world. It is done through the spread of knowledge, technology, products and services from one country to another.
• When a company expand its operations and crosses its national boundaries and set up offices in the other countries it will be in need of man-power/Human resources to accomplish its objectives.  
• Acquiring human resources in the other country where operations are expanded is the globalization of human capital.
• In other words globalization of human capital means a multinational company providing off-shore jobs to people of countries other than its home country.  

It is inevitable as companies increase their global operations because it may not be possible to shift the workforce to other country. Further it will also be expensive to do that. On the other hand employing workforce in  the country in which operations are expanded will be far more cheap. Also by doing this company will have a pool of human capital from around the world with different skills which can be used as and when required. Therefore, from financial perspective the cost will be lowered and profits can be increased

For example there are plenty of skilled manufacturing workers in China, software and customer service professionals in India, or highly skilled employees in Europe, which will be helpful for company to take advantage according to the skills and setting the relevant office in the country as per the available resources.