Organisations have to keep pace with the ongoing challenges and trends influencing human resource management. Some of these challenges are detailed below:


Responding Strategically to Changes in the Marketplace : In today’s highly competitive environments, the competition has been global and innovation has emerged as a  continuous process. As a result, innovation and adaptation have become the key to capturing opportunities and overcome obstacles. Adaptation of innovative practices facilitate the success of the organisation.

For example. When big auto manufacturing companies like General Motors, Chrysler, and Ford were on the verge of bankruptcy, most of their part suppliers sold exclusively to them. As a result, part suppliers of these auto manufacturing companies had to rapidly find other markets which required significant human resource changes and challenges.


Competing, Recruiting, and Staffing Globally : The integration of world economies and markets has sent businesses abroad to look for opportunities as well as deal with foreign competition domestically. Consumers around the world want to be able to buy “anything, anytime, anywhere.” The companies are also making it possible for them to do so.  For example, BMW has traditionally been a German brand, but now the automaker builds cars in the United States, China, and elsewhere. In globalisation, managers have to balance a complicated set of issues related to different geographies, including different cultures, employment laws, business practices, and the safety of employees and facilities abroad.


Setting and Achieving Corporate Social Responsibility and Sustainability Goals: Companies are realising that being socially responsible may not only help them to avoid legal complications and also improve their earnings. Sustainability is closely related to corporate social responsibility. Sustainability refers to a company’s ability to produce without damaging the environment or depleting resources. For instance, after the 2010 oil spill in the gulf of Mexico, one of the several accidents in BP Oil’s history that have harmed both the people and the environment. Many people demanded that BP should change its approach to corporate social responsibility. Corporate social responsibility has now become more important for prospective customers as well as employees.


Advancing HRM through Technology : Advanced technology tends to reduce the number of jobs that require little skill and to increase the number of jobs that require considerable skill. In general, this transformation has referred to as a shift from “touch labour” to “knowledge workers.” In this process, responsibilities of employee expand to include a richer array of activities such as planning, decision making and problem solving.

The most central use of technology in HRM is an organisation’s Human Resource Information System. It is a computerised system that provides recent and accurate data for purposes of control and decision making. Information technology is affecting human resource management in relational nature. It also connects people with each other and with HR data. For example, companies are using software to recruit, screen, and pre-test applications online before hiring them as well as to train, track, and promote employees once they have been hired.  The internet and social media are also having an impact. Social media networking has become the new way to find employees and find out the acceptable candidates.


Managing Costs While Retaining Top Talent and Maximising Productivity: For years, most human resources managers have been under pressure to cut labour costs. Organisations apply many approaches to lower labour-related costs, including carefully managing employee benefits, downsizing, outsourcing, and engaging in employee leasing in order to enhance productivity.

Few jobs come with lifetime guarantees and benefits that will never change. Nonetheless, employees want to work for employers that can provide them with a certain amount of economic security. Some companies, such as, Google, are able to hire talented employees by offering them a great deal of job security and great benefits. However, most companies, especially smaller ones, find it hard to compete with bigger firms with deluxe benefit packages. HR managers have to face this challenge of retaining the top talent at the same time managing the labour cost of the company.


Responding to the Demographic and Workforce Diversity : Changes in the demographic composition of employees, such as their age, education levels, caste, creed, gender, and other ethnicities are the biggest challenge in managing workforce diversity. In such scenario, it is absolutely vital to increase efforts to recruit, train, and manage more diverse workforce. Workplace diversity impacts the way human resource management functions are performed to cater to their diverse needs. For example, Generation Y, also known as millennials, are generally regarded as having good technical know-how and initiative, especially when it comes to starting their own business (Facebook founder Mark Zuckerberg is notable example). Moreover, employers wanting to attract talented women, have to devise measures to ensure that they are treated equally in the workplace in terms of advancement, opportunities and compensation.

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