LVMH Moet Hennessy Louis Vuitton, is the leading luxury brand conglomerate in the world. Based in Paris, it employs 56,000 people, 63 per cent of whom work outside France. With more than 1,400 stores worldwide and sales of Euro 12 billion for the year 2000 ( 84 per cent outside France), LVMH is a global giant
From its creation, LVMH was an international business, but its human resources were sometimes lacking in international experience. Competing in a global environment, LVMH must attract, develop and retain managers with global competences. Since 1987, LVMH has sought to create a pool of global managers, with a working knowledge of international markets
LVMH defines a global manager as a person with the training or the experience needed to manager a global business. He or she can perform from any place in the world thanks to a global vision and skills in managing multilingual and multicultural teams. LVMH believes that the best way to develop its employees is not formal training but mobility. This includes vertical, horizontal and geographical moves within the organization
LVMH is a very attractive company for French prospects however, it is not as successful on international labour markets. Once having achieved global recruitment, LVMH must succeed in developing its employee’s global skills. In order to facilitate mobility within the group, LVMH is trying to harmonize its practices to allow for a more global workforce
You have been appointed as a HR consultant to LVMH in order to give professional consultation on various aspects of HR planning and development
LVMH businesses are expanding globally at a faster rate than ever. LVMH companies now operate in many different overseas locations and the need for HR to respond to this is crucial. International growth also creates more opportunities for staff to work abroad and an increasing number of employees are engaging in international assignments and global client projects
TASK 1:What is the main purpose of workforce planning in LVMH at global level?
LVMH’s leadership is based on its balanced presence in several key sectors of luxury goods and an even geographical split of its activities between Europe, Asia and the Americas. It pursues an aggressive growth strategy based on a high level of innovation, control over distribution and sustained advertising and promotion.
LVMH organizes its Human Resource Management around five main world zones, namely, France, Europe, the Americas, Pacific Asia and Japan. France and Japan are regarded as country/zone because of the size of their market
LVMH businesses are expanding globally at a faster rate than ever. LVMH companies now operate in many different overseas locations and the need for HR to respond to this is crucial. International growth also creates more opportunities for staff to work abroad and an increasing number of employees are engaging in international assignments and global client projects. LVMH’s global workforce mobility planning is developing managers. They want to put staff in new situations for them to develop new skills and to prove their mettle. They also develop a career management process called Organizational and Management Review (OMR). If they want to send employees abroad on international assignments, they will just take a look at their OMR and find out who among their employees are eligible for ready to move
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TASK 2:It could be said that international recruitment is the most important HR function within LVMH. What arguments would you use to support this view?
At the heart of all personnel activities is the Human Resources (HR) plan or strategy. This is the centerpiece, where corporate manpower objectives are set out, in numbers of people within each area of production, sales and administration, the skills required and the costs. The plan may cover any period, but most typically it will be for the period of one to five years, and will be a part of the company’s budgetary programme. Corporate planning is often undertaken on a five-year rolling cycle, with each successive year being brought up to date as it comes closer to the current year, and it would be usual for the HR plan to be part of this procedure. In the HR plan the organization’s demand for labour is set out, and this results in an examination by the personnel manager of the internal labour supply. Where possible, posts are filled from within as the most efficient source of labour, but it would be unusual for the right mix of skills and experience to be available for every vacancy, and so recruitment into the organization is necessary. The transfer of employees, their promotion and recruitment results in the establishment of training schemes
As we have learned, LVMH is a company that operates internationally. They have branches all over the world. That is why international recruitment is the most important function of their HR department. As LVMH’s policy, they first select internally for deserving employees if some vacancy abroad is required before they started to recruit externally. This is because, existing employees are known to the organization and are generally familiar with its customs and practices. The costs and the time that recruitment, selection and induction procedures consume can be significantly reduced. Internal recruitment to fill vacancies may be used as a means of career development, widening opportunities and stimulating motivation among existing employees. When LVMH has to use external sources, and this is the normal situation, there are two main means of conducting the search for employees. First, is through employment agencies like governmental, institutional and private commercial. Secondly, is by contacting the public directly through advertisements in newspaper, journals and internet
TASK 3:To what extent is workforce international mobility important in helping LVMH achieve its aim?
Since people are the most valuable of the resources available to LVMH, they need to be employed as effectively as possible. At the same time people are not simply just another factor of production. The treatment of people at work emphasizes how crucially important it is that employers should understand the psychological needs of their employees and should treat them humanely and sensitively. Although the first priority of LVMH is the achievement of its operational objectives, at the same time it must create opportunities for the use and development of the knowledge and skills of its employees to the mutual advantage of both. In LVMH, this objectives can be achieved in two ways. First, by planning work experience so that knowledge, skills and attitudes needed for effective performance of work may be developed through a continuing variety of work situations and through appointments to jobs of wider responsibilities, what is generally described as career development. It is important that this approach should apply generally to all employees, but it is especially important for management succession planning to ensure that senior managers have acquired appropriate experience. Secondly, by training whereby learning situations are purposefully structured in a variety of ways at the workplace or on formal courses so that job related knowledge, skills and attitudes may be developed
TASK 4:What benefits do LVMH career development and expatriate compensation practices give to both global managers and the company?
Helping employees to become effective in their jobs is one of the fundamentally important tasks in personnel management that any work organization has to undertake. Employers depend on the quality of their employee’s performance to achieve organizational aims and objectives; employees have motivational needs for development, recognition, status achievement that can and should be met through job satisfaction. The initiative for providing this help must come mainly from the employers. This includes training, development, education and more recently human resources development. Training is always a means to an end and not an end in itself. Training is of no use by itself unless it leads to the effective performance of work it inevitably incurs a waste of valuable resources
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