Is globalization a challenge for HRM ?

"Globalization" is a subject which has many definitions with number of arguments & it can be applied and affected in several areas in the business world today. This blog brings a summarized idea how the globalization affects in HRM & we expect to discuss whether the globalization is a challenge for HRM.  

Globalization & HRM

  We can simply define the globalization as a process which drawing people together from all nations/countries of the world in to a single community. In today's organizations, HRM is affected by many factors & the globalization plays a principle role when an organization is moving towards the global market. Accordingly, globalization has exposed a vast capacity for HRM where it has to be focused on recruitment, management and providing directions for the people within an organization. 

  HR managers do not need to focus on a small market today to find the right workers to meet the global challenge, because today they can hire employees from all over the world. Due to this, the human resource management up to some extent has become more effective. Being the people factor is most important in today's organizations, this change has considerably affected the HRM. Managing the diversity of the workforce from around the world is the main task of a HR manager when  dealing with the global HRM (Jabbour et al, 2011).

The effect of globalization on HRM

According to Noe et al, (2000) Culture, Economic system, Political system & the human capital of a country are the factors which affect HRM in global markets. Since the global supply of talent is less than the long term demand, the employers are facing many difficulties  to acquire sufficient & quality resources. This is specially true for highly skilled jobs that require specialized knowledge. HR must not only find qualified applicants, they must also locate them in locations around the world. To fulfill this, HR department must devise suitable strategies to locate the required people or develop the existing resources. Moreover, compensation, benefits and labor relations are some of separate areas of HRM which affected by the globalization. Compensation elements that motivate and retain employees in different countries may differ. Managing compensation in multi national companies is much difficult due to the varied employee pay expectations and perceptions of pay fairness (Graham and Trevor, 2000). Talking further expatriation, communication & the training requirements also can be identified as factors which affect HRM in global market in many ways.

Is it a challenge ?

As we discussed earlier, the demand for talented individuals is likely to grow faster than the growing percentage of the talented individuals. So the gap has to be filled by the HR by following strategic methods. Staffing, selecting and retaining talented employees, training and development, encouraging employees to be innovative and creative will also be in a challenging environment & it has to be properly addressed & find solutions without a fail in order to gain the competitive advantage in the global market.

Further, enhancing global business strategy, aligning HRM with business strategy, How to design & lead change, How to build a global corporate culture & How to develop leaders are most important questions & the challenges face by HRM which can be identified as results of globalization (Varma, 2017). 

It also remains the greatest challenge for human resource departments of global organizations to manage and distribute a diverse workforce in culture and language skills in different countries. HRM has a huge responsibility to build up a global mindset among the organizations' employees as they have to deal with not only the local consumers but with the global market. 

At the heart of globalization, multinational organizations need to learn how to integrate diverse value systems and share common global work values in order to create an environment in which workers can communicate and coordinate their activities to achieve common goals.

Reflection

According to the summarized principal factors we discussed above, it can be clearly identified that the globalization is a challenge for HRM & HRM has to play a vital role with in an organization when its driving towards its vision through the globalized market conditions. But again, globalization is also creating opportunities for HRM to reach the required solutions or develop strategies in order to positively take over the challenges.     

References

Graham, M. E., & Trevor, C. O. (2000). Managing new pay program introduction to enhance the competitiveness of multinational corporations (MNCS). Competitiveness Review, 10(1), 136–154.

Jabbour et al, (2011) ‘Diversity management: Challenges, benefits, and the role of human resource management in Brazilian organizations’, Equality, Diversity and Inclusion, 30(1), pp. 58-74.

Noe, R. A., Hollenbeck, J. R., Gerhart, B. & Wright, P. M. 2000. Human Resource Management: Gaining a Competitive Advantage, 3rd Edn. 

Varma, V. (2017) ‘Globalizing Human Resource Management : Role, Responsibilities and Challenges’, (5), pp. 20–24.