Question1: As a result of globalization and liberalization, HR professionals have to face challenges in the contemporary business environment”.
ANSWER : Globalization has caused blurred international boundaries. On one hand, there is an open market for companies to seek talent on the other hand for employees a wide array of choices to work with, all because of globalization. But such types of open and globalized markets expose the firms to the challenges occurring in the prominent field of human resources. This paper is an attempt in understanding and analyzing the challenges existing and affecting the functioning of HRM while a company operates on a global platform. The major encounters and worries of the HR team, and the responses that HR managers need to make to such challenges with their increasing responsibilities in the globalized environment, have also been discussed in this paper. This is a communication and cross-sectional study based on descriptive arguments and analytical logic developed through the responses received from HR teams of companies belonging to different sectors. Effective leadership, managing the diverse workforce, the role of technology in HR functions like recruitment and selection, legal and political aspects, skill management, global mindset are some of the jostling issues encountered by human resource function in the retro of globalization. Globalization has caused blurred international boundaries. On one hand, there is an open market for companies to seek talent on the other hand for employees a wide array of choices to work with, all because of globalization. But such types of open and globalized markets expose the firms to the challenges occurring in the prominent field of human resources. This paper is an attempt in understanding and analyzing the challenges existing and affecting the functioning of HRM while a company operates on a global platform. The major encounters and worries of the HR team, and the responses that HR managers need to make to such challenges with their increasing responsibilities in the globalized environment, have also been discussed in this paper. This is a communication and cross-sectional study based on descriptive arguments and analytical logic developed through the responses received from HR teams of companies belonging to different sectors. Effective leadership, managing the diverse workforce, the role of technology in HR functions like recruitment and selection, legal and political aspects, skill management, global mindset are some of the jostling issues encountered by human resource function in the retro of globalization.
The increasing prevalence of globalization is driven by a number of factors, including the shortage of talent in developed countries, availability of low-cost labor and growing consumers in developing countries, and technological progress. Shortage of Talent in Developed Countries Despite the current economic downturn and unemployment, most developed countries, including the United States, Germany, and Japan will face long-term talent shortages mainly due to aging and the retirement of baby boomers. There are more workers retiring than entering the labor force in these countries. By 2020, for every five retiring workers, only four new workers will join the labor force in most developed countries. According to one estimate, the United States will need to add 26 million workers to its talent pool by 2030 to sustain the average economic growth of the two past decades (1988-2008) unless a technological breakthrough replaces manpower, while Western Europe will need to add 46 million employees (World Economic Forum, 2010). The shortage of workers is predicted across most industries, including manufacturing, construction, transport and communications, trade, hotel and restaurants, financial services, IT and business services, health care, public administration, and education. Availability of Low-Cost Labor from Emerging Countries The opportunity has never been greater for multinationals to attract top talent from emerging countries, such as Brazil, Russia, India, and China, or to outsource work to these countries. Global population growth differs greatly between developed and developing countries. In the developed countries, the USA, EU, and Japan, the current annual rate of growth is less than 0.3 percent, while in the rest of the world the population is increasing almost six times as fast. According to McKinsey Global Institute, there are approximately 33 million potential professionals in emerging markets and they are growing very quickly. The stock of suitable, young professional talent in emerging markets is growing at 5.5 percent annually, while the number in developed countries is growing at just 1 percent annually (McKinsey Global Institute, 2005 - II). The total number of university-educated workers in low-wage countries far exceeds the number for higher-wage countries. Currently, India produces as many young engineers as the United States, and China produces more than twice as many. Russia produces 10 times as many finance and accounting professionals as Germany. According to the International Organization for Migration, there were an estimated 214 million international migrants in the world in 2010, and fifty-seven per cent of all migrants live in high-income countries (World Migration Report, 2010).
The number of migrants is likely to grow exponentially in the coming years. Furthermore, the migration of workers and outsourcing of work would not be limited to unidirectional flow from emerging countries to developed countries. Technological Progress Globalization is made possible by the development of cost effective, yet very powerful technologies, including the Intra- and Internet, enterprise resource planning system, data warehouse, data mart, and data analytics. Friedman (2005) defined globalization a whole set of technologies and political events converging—including the fall of the Berlin Wall, the rise of the Internet, the diffusion of the Windows operating system, the creation of a global fiber-optic network, and the creation of interoperable software applications, which made it very easy for people all over the world to work together—that leveled the playing field. It created a global platform that allowed more people to plug and play, collaborate and compete, share knowledge and share work, on a scale never seen before. Cloud computing and new advances in remote access and support technologies also seem to fuel globalization. Many service jobs, such as call centers, animation, transcription, and software development can be carried out remotely. It is estimated that 160 million jobs, or about 11 per cent of the projected 1.46 billion service jobs worldwide in 2008, could be carried out remotely, barring any constraints on supply (McKinley Global Institute, 2005 - I). Section 5 discusses a global human resource information system that collects and stores large volumes of data from various sources, including external and remote sources. The system is designed so human resource personnel are able to analyze the data to get business insights, predict future needs and develop strategies to fill those needs. CHALLENGES OF GLOBALIZATION As stated in the previous section, the pool of talented individuals has been growing and is expected to continue to grow in the near future, mainly because of increased educational opportunities in emerging nations. In addition, the demand for such talent is likely to grow even faster in the same period. Based on data from 22 countries and 12 industries, a World Economic Forum study predicted that vast talent gaps between the supply and demand of highly skilled workers would appear by 2020 (World Economic Forum, 2011). The demand for talented people is growing not only from developed countries, but from the developing countries themselves as they pursue their own nation building. Human resource professionals at multinational companies in emerging markets such as China, Hungary, India, and Malaysia have reported in a recent survey that candidates for engineering and general-management positions exhibit wide variations in suitability (Guthridge, Komm, and Lawson, 2008). According to the McKinsey Global Institute, only 13 to 19 per cent of 33 million university graduates in developing countries are suitable to work in a multinational company, due to their lack of language skills, low quality of educational system, and lack of cultural fit. Also, only a fraction of these people are willing or able to relocate to foreign countries for employment (McKinley Global Institute, 2005 - I).
It also remains the biggest challenge for global organizations‘ human resource departments to manage a workforce diverse in culture and language skills, and distributed in various countries. It is critical that the businesses not only familiarize with local ways of doing business, and understand the needs of local consumers, but also develop a global mindset among their employees. Being at the center of globalization, multinational organizations need to learn to integrate diverse value systems and espouse shared global work values to create an environment, where workers are able to communicate and coordinate their activities to reach common goals (Rosenblatt, 2011; Erez and Drori, 2009; Ralston et. al., 1997). Human resources must play new roles and responsibilities in leading the organization in uncharted waters of globalization. ROLES AND RESPONSIBILITIES OF HUMAN RESOURCES In the past, the function of human resources was typically considered a cost center and administrative overhead. The human resource departments focused on short-term gains and savings. They focused on administrative efficiency and compliance activities. They tended to expense investments in talent intangibles rather than capitalize and tended to raise short-term earnings by cutting discretionary expenditure on people development (Guthridge, Komm, and Lawson, 2008; Hamel and Prahalad, 1994; Schuler and Jackson, 1987, Bryan, 2007). Such tendencies achieved short-term successes but encountered long-term problems when the objectives were achieved at the expense of employee productivity.
0 Comments
Please do not enter any spam link in the comment box.