LVMH_Career Development through International Mobility

Introduction
Task 1

Work Force Planning

Workforce planning is a process designed to anticipate and integrate the human resources response to an organization’s strategic plan. [Strategic Workforce Planning PDF]. The plan is projected to help in staffing in terms of short as well as long term. Through Workforce Planning organisations gain insight into what people the organisation will need, and what people will be available to meet those needs. In creating this understanding of the gaps between an organization’s demand and the available workforce supply, organizations will be able to create and target programmes, approaches and develop strategies to close the gaps.
The plan should: –

• Depend on the staffing and the competencies predicted for the future.
• Asses the present work force
• Identify gaps which exist between the present workforce and the future requirements
• Develop strategies to acquire the workforce needed in the future
• Evaluate from time to time the effectiveness of the plan.

Work Force Planning in LVMH

In a global organization like LVMH, work force planning faces a lot of constraints. The plan has to take into consideration the growing number of 71000 staff who are spread across 2000 of the companies stores. Displaying an organic growth of 7% per annum it is essential that LVMH has the right and sufficient talent to compensate its future requirements. Another constraint would be the facts that the plan should incorporate fifty different autonomously run companies which are constantly growing alongside the addition of newer companies. The main aim here would be to develop the workforce in line with the business strategy. The plan should be constantly evolving taking into account the various changes affecting the organization.

From the outset LVMH was an international business and had drawbacks in its work force plan which is evident from the fact that the human resource department lacked international experience and many managers were not fluent in English. The skills required were not predicted well enough to ensure the competency levels of the employees was in co-ordination with the organizations needs at that point of time. The group is headquartered in France but has to be multicultural due to the scale of its international operations. Subsequently an effective work force plan enabled LVMH to identify the competency levels it needed from its employees in line with its business strategy. This lead LVMH to develop global managers with international expertise through International Mobility.

Looking towards the future, the importance of work force planning at LVMH can be related to the following global trends: –

• Change in market trends
• Scarcity of skilled workforce in certain countries
• Changes in legislations which may collide across operating countries
• Older population
• Changes in the retirement age of the younger generation of employees
• Advancement in technology to change the HR function

An effective work force plan which takes into consideration the growth and the staffing constraints in the operating as well as prospective business zones would equip LVMH to maximize its growth opportunities.

Task 2

Recruitment

Recruitment refers to the process of attracting competent prospective employees for vacancies at an organization or firm. Recruitment may be done internally or externally. External recruitment is the process of attracting employees from outside the organization whereas internal recruitment is where internal labor is used for filling vacancies. The rapid globalization of the markets combined with a constant shortage of skilled staff and advances in technology have resulted in large scale changes to recruitment practices throughout the world. A survey spanning more than 2000 companies conducted by Intelligence Group in association with StepStone, revealed that 42% prefer to recruit internationally for their operations.

International Recruitment from the Perspective of LVMH

There are many advantages associated with LVMH recruiting internationally to cater to its workforce needs, some of which have been outlined below: –

• Moving from Ethnocentric to Geocentric

50% of the Senior Executives and 40% of the managerial staff are French even though they only account for 37% of the employees in LVMH. These figures portray an ethnocentric orientation of the firm. An ethnocentric orientation in a global organization can lead to a lack of understanding of the host countries differences that may require a different approach to marketing and management. Here a common belief is that the head quarters way of managing is better or more preferred than any other way of managing practiced outside. As a global organization aiming to grow internationally an ideal approach would be a geocentric orientation as cited by Levitt(1983). This would be achievable by recruiting talent internationally which would gradually reduce the ethnocentric influence and develop a pool of global managers needed by LVMH.

• Reduced Influence of Labor Market Conditions in Specific Countries

LVMH would have a larger people base to recruit from and it will not be limited by work force scarcity in any particular country. The influence of changes in any particular countries labor market conditions would be reduced.

• Larger Talent Pool

Recruiting employees from the countries where LVMH has presence would add to the talent pool within the organization. These new recruits would have local knowledge of the culture and fashion trends in the country of their origin. At the international level they would bring into the organization a fresh set of skills which may benefit LVMH. For example: – A designer recruited in India may create an ethnic accessory which can be marketed and sold not only in the country of origin but may have a huge potential internationally.

• Cost Saving

Recruiting internationally would reduce the need for expatriation to fill a vacancy. This would naturally lead to saving the expenditure involved. It would also reduce the work load on the International transfer team. The internationally recruited employees could be taken through intensive training to understand the expectations from management.

• Less Dependence on Expatriates

Many expatriates are unwilling to take on certain international assignments due to various reasons. Recruiting internationally would therefore reduce dependence on Expatriates.

• Government Legislation

LVMH operates through more than 50 stores which are spread worldwide. Recent trends have shown that governments require companies who conduct business in their country to develop the talent of the local workforce so that they hold key management positions over a period of time. Certain countries also have legislations which require a certain percentage of the staff to be locally recruited.

Task 3

International Mobility

International Mobility has grown with the increase in globalization of companies and the opportunities of operating in markets across the world. This expansion in business created a need for leaders and employees with global expertise to manage operations across national borders. Human resource departments are facing a growing demand on their resources in order to manage the mobility of this new type of work force. LVMH has the advantage of developing this form of work force early and now it can reap the benefits of the pool of Global Managers.

Benefits of International Mobility

LVMH stands to gain from the following benefits of International Mobility: –

• Availability of skilled labor

Changes in technology have created a shift in the labor market. There is a noticeable shift towards the demand for skilled labor. Shortage of labor caused in certain countries due to this demand can be counteracted with the help of mobility.

• Distribution of knowledge

In this age, technology progresses at a very rapid pace. In the face of eminent competition it is important for LVMH to be technologically ahead and implement development in a very short span of time. International mobility of competent work force would enable the rapid distribution of knowledge within the organization.

• Global Competence

Since the expatriates in LVMH are travelling extensively and engaged in international assignments they develop a knowledge base and skill sets. They may include an understanding of different countries market trends, culture differences, local languages, management of multi cultural teams. More globalized managers would lead to a globalized top management who will guide its international operations. This global competence of the workforce gives LVMH an advantage over its competitors.

• Adaptability

Recent trends show that products need to be constantly evolving and be customer specific. Mobility develops an adaptive and flexible culture in LVMH and thus it can benefit by keeping in pace with the customer requirements.