The concept of Human Resource Management has been termed by scholars as a form of management whose paradigms are in perpetual transition. The environment under which Human Resources Management (HRM) operates is faced by new challenges as the world adopts new ways of doing business. Globalization has initiated novel procedures such outsourcing and mixed demography in the workforce . Economic and technological changes have significantly altered the employment patterns and practice around the globe today. Technology has since replaced the practices in Human Resource management from transactional to strategic management. Hence, adapting to this new environment is vital and necessary for the survival and the continued profitability of a company. This paper analyzes the challenges that the field of human resource management face. The paper will delve into matters such as globalization, changing HR management practices due to a shrinking global village and competitiveness brought about by technology. The paper will also analyze the problems faced by HR managers in managing and improving talent.
Globalization and its impacts on Human Resource Management
In almost every sector of business, companies and corporations have been characterized by a changing global situation by investing at the global stage . Companies in different fields of commerce have presence in several markets spanning all the continents. Such global investments have created new opportunities to do business since there more potential customers. Today, the Middle East and Asia represent the emerging markets in which businesses are growing at a tremendous rate. It will be detrimental for any investment corporation to over look these new markets.
Such a global investment has led to intense competition in the market and at the same time, created greater economic interdependence . Nothing outlines this more clearly than the recent financial crisis in which the failure of one financial institution led to a total collapse of entire economies across the globe. To remain competitive companies have adopted new methods of running business and human resource management. Organizations have embraced the idea of outsourcing in which company operation are shifted to cheaper and more productive parts of the globe. Financial services and investment experts have since taken their businesses to countries such Singapore and Hong Kong . On the other hand, manufacturing businesses have taken advantage of cheaper labor and energy costs of China, India, Philippines and Malaysia to invest in these locations.
One of the main tactical changes adopted by several organizations is the shift in human resource management from the more transactional methods. A new HR management scheme referred to as strategic management has been adopted. This is the kind of management utilizes proactive management of employees. In this method, the needs and aspiration of the employees are considered to be fundamental for the future of the company. It assumes that meeting the goals of the employees leads directly to meeting company goals .
Strategic human resource management requires thorough planning of the HR structure of the company. Strategic HR management planning requires thorough forecast of the requirements and the needs of the employees of the company. In finance and investment sector, employees might require good compensations, bonus and benefits as incentives, benefits such as medical benefits extended to their dependants, extensive training on new technology and job security. On the hand, the management should also forecast on availability of resources and how to find a common ground between the requirements and the resources.
Globalization also presents other challenges for financial and investment companies. One of these challenges is the diversity presented in the workforce of a global company. Employees working for the same corporation are composed of different races, age, culture, religions and other diverse demographic factors .
Taking advantage that comes along with cultural diversity in the organization requires an equal response in terms of adjusting the norms of the company to accommodate everyone. Such flexibility involves allowing flexible payment schedules, respecting cultural values towards work and treating employees as consultants and not workers. Some have gone further to allow its employees to work from home and providing them with telecommuting technology. This gives business less strained employees who are willing to work longer than the conventional working hours.
While such cultural diversity may present a good opportunity for attracting and retaining the best human talent, several challenges come along in human resource management. In the current business environment, getting the best trained and talented individuals to run the company means ensuring a global presence and providing the best packages that attract these persons. It also gives the company the opportunity of attracting customer of diverse races and backgrounds. For example, an Asian customer would prefer dealing with an Asian investment expert.
Developing such talent is a critical issue in strategic human resource management. This process involves training, tutelage and mentorship. The new kids on the block should be coached and properly trained on their new roles. Older talent will be most appropriate in being role models to the young employees. Since they are old hand in the trade, they should take the initiative of imparting the organization’s core values and culture into the new talent. This will enable them be equipped with the relevant tools of trade to enable them in execution of their roles. Older talent must also be taken through refresher courses in order to improve on their performance.
Talent development is an important part of talent management. Once talent has been recruited and retained then development of the same must come into play. PricewaterhouseCoopers is one company that has over the years developed talent leading to its success in business . This company has various strategies of developing talent ranging from recruiting highly educated young professionals, training them to creating work placement for them. In this respect, new entrants are placed on a structured orientation, training and education program over a four year period. This enables them to develop emotional intelligence where qualities such as listening emphatically, understanding one’s feelings, being emotionally stretched and relating effectively are sought after. This company also introduced work projects, group task force assignments and leaves to help individuals develop key skills. The individuals are also attached to trainers and mentors at various levels for career development. The company also fostered close relationships with leading business schools and other leadership academies so as to promote excellent business performance.
However, many organizations have and will continue to encounter a myriad of challenges in talent management. Leadership is one area that has become a huge challenge. The success or failure of any organization is pegged on its top brass or leadership. Even though the development of leadership is an initiative that many companies tend to overlook owing to the fact that it is very expensive, it is imperative that employees are trained on how to become better leaders. Training line managers to manage talent in a transparent manner is very crucial to any organization.
Another challenge in human resource management is technology. Every organization has to keep up with the advancing technology so as to remain relevant . This for sure has been very expensive for many companies especially in adopting new and advanced machines and systems. Scholes, (2008) illustarates that Standard Chartered PLC had difficulties in HRM but some of the initiatives adopted were, human capital and management and the use of robust technology. It developed one unified data management for all its direct employees which is powered by PeopleSoft. This kind of standardized robust data of PeopleSoft system and unified human resource management, the bank was able to promote a high data reporting ability. This strategy enabled the bank to track its global processes constantly and keeping a close tab on the demographics, performance, training, rewarding and managing talent across all its networks .
With regard to these challenges, organizations have to take the initiative to ride on them. Treating employees or talent well is critical in overcoming these challenges. Any firm should create an environment where all employees are respected, appreciated and given their due. Firms should also engage in new age leadership where democracy comes into play. Top leadership should move away from commanding to supporting and consulting methods of management (Tansley, 2008). Firms should also embrace technological change so as to stay relevant.
Resource allocation is a component of human resource management. It is the allotment of available resources to scheduled activities in order to achieve the goals and objectives of an organization. This process also meets several challenges. Resource allocation challenges come up as a result of the allocation of limited resources among many competing activities. Many companies have faced challenge related to resource allocation one of them being SmithKline Beecham . Immediately after a main merger, SmithKline Beecham realized that it had very many valuable products in the pipeline but its budget could not accommodate them. Critical decisions then had to be arrived at so as to address this problem.
There was need for prioritization and valuation of its resources and investments. Resource allocation was done in a transparent and fair manner which was accepted by staff in all departments across the board. Tan (2010) illustrates that the managing director and other staff came up with an innovative initiative for asset valuation and implemented it. This enabled them in handling difficult trade- off aspects. They increased budgets for some projects and cut back or stopped others. During the first year, the result of this was an addition of the company’s portfolio value of drugs in clinical development by 20%. In the second year, an in-house team of analysts was trained and mentored and as a result, there was a huge value addition. This portfolio developed has now become standard in the pharmaceutical industry.
Conclusion
Over the years, organizations have had a matrix of challenges regarding key components namely, talent management, resource allocation and strategy development. These three aspects are interrelated and must be treated as one process. The challenges that arise out of these components have been there and will continue to surface even in the future. Organizations must brace up for these challenges at a greater multitude due to the fact that there are so many radical changes taking place in every area of life. Technology is advancing fast, natural resources are becoming scarce, global warming is heating up, water levels are going down, diseases are on the rise, hunger is biting hard, deforestation and destruction of water catchment areas is increasing, the gap between the poor and the rich is widening and poverty is the order of the day. All these factors and many more are influencing greatly the management of any organization. Revision of strategies and other measures have to be considered if any organization is to survive.
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