Abstract

A 2020 report from DI (Confederation of Danish Industry), Denmark's largest employer and business organization representing over 18,000 small and large companies states that the shortage of qualified labor is indeed a reality for many Danish companies today and much implies that it will be one of the substantial challenges for them in the future. Therefore, a lot of businesses are looking abroad when they are searching for new employees. International employees not only contribute with competences and know–how that generates growth in Danish companies but also bring value to the Danish society and economy. A number of reports in recent years have shown a correlation between the presence of global talent in Danish companies with increased competitiveness and economic growth.
International workforce is worth considering for all companies, regardless of size and stature, with growth ambitions for the coming years; however, a lot of questions arise, and many considerations need to be made when a company is recruiting or planning to recruit internationally and welcoming new international employees. An important question that needs to be asked is whether Danish businesses are actually ready to welcome and integrate an international workforce and how knowledgeable and resilient their staff is about other cultures, customs and communication norms? This is not always a smooth sailing type of process. First, it is crucial that the company becomes acquainted with the legislative requirements when recruiting global talent. Second, companies need to identify why it is relevant to recruit an international talent, what is the purpose of the hire and what set of expectations the company might have. This will make it easier for them to prepare for welcoming the new worker and to ensure that both the parties find the experience satisfactory. One of the vital considerations to be made is whether the internal communication should be in English or Danish. Lastly, it is important for management to allocate the necessary resources to ensure a smooth process both for the firm and for the future employee not only in relation to the hiring process, but also long term in order to retain the international talent in the company (Guide to International Recruitment 2020, 2020).
The purpose of this research is to make a meaningful contribution to the field of IHRM and the target audience for this study are the Danish Small Medium Enterprises (SMEs) who recruit, manage and retain expats. Also, the research area and problem were selected due to personal interest in the subject domain while internationalizing to India considering huge psychic distance and multiple cultural differences between both countries. The general belief is that a greater psychic distance creates instabilities that might affect a firm’s entrance into any market. Differences within the social and business environment of two markets create distance, which can cause instability and uncertainty. Such differences incorporate society, culture, language, religion, economic development, education, representation, governmental issues, financial conditions, market structure, and business practices. Nevertheless, with globalization on the horizon for many firms around the globe, having a culturally diverse workforce could be leveraged to help their business expand worldwide.
Despite multifold benefits of having an international workforce there is a gap between the concept of IHRM and its practical implementation due to multiple challenges/barriers underpinning these Danish SMEs. As a result, this study will aim to answer: The multilayer challenges that underpin Danish SME’s while recruiting and retaining an international/culturally diverse workforce and strategies to overcome/mitigate them.

Key words: Challenges, Danish, Small Medium Enterprises (SMEs), International, Recruitment, Culture, Diversity, Expat, IHRM, Retention, Strategies, Denmark.