What are the effects of globalization on international human resource management?

There's no denying that the world is becoming increasingly globalized. Companies are expanding to new international markets and hiring an increasingly diverse labor force every day. The impact of globalization on the management of the human resource industry might just be the most challenging aspect of globalization, as HR managers must learn to navigate a complex maze of local and global customs, cultures and laws.

Globalization in HRM Definition

When talking about the implications of globalization on human resource management (HRM), it's important to know exactly what is being discussed. That's why it's important to create a specific globalization in HRM definition. When someone talks about human resources and globalization, they're talking about applying human resource techniques to global business practices. This could mean adding workers from other countries and cultures to a business's main headquarters as well as opening new locations or releasing new products in other countries.

There are a lot of human resource management issues that need to be resolved when it comes to globalization, including complying with local and international laws and balancing local customs with company policy and culture.

Dealing With Diversity

The approaching retirement in developed countries of what would be called the "baby-boomer generation" in America as well as a dwindling youth population is causing a skills shortage in many countries, including the U.S. and Japan. Human resource managers are dealing with these problems by adding more women, older workers and persons from other countries to the workforce. This is resulting in both an increase in cultural and demographic diversity in companies.

While diversity can benefit a company in many ways, it's up to human resource workers to ease the diversification of the workplace through both training to help prevent harassment and discrimination against those of different backgrounds and by incorporating company policies to help these employees maximize their productivity. While older employees, for example, have a lot of experience to offer, they are 4.5 times more likely to have disabilities than younger workers, which means they may need specialized equipment, flexible work schedules and less physically demanding work.

Similarly, female employees may need protection from sexual harassment and pregnancy discrimination. Although more challenging, these kinds of policies should still be implemented in countries without laws or customs prohibiting these problems in order to maintain company policies about sexual harassment and discrimination across its global locations.

Global Social Responsibility

Many companies have been known to outsource work to poor countries where employees are willing to work for lower wages due to higher competition and a lower cost of living. Outsourcing is a touchy subject, as it means hiring workers from other countries and taking jobs away from the country where the company is headquartered. The public is a lot more comfortable with outsourcing that incorporates social responsibility rather than simply exploiting workers in poor countries.

This means that when your company hires people in third-world countries to work in manufacturing, customer service or sales positions, these people should be paid a fair wage with at least some basic benefits (sick leave, disability, etc.) and not simply offered the bare minimum wage that these workers are willing to accept. Even if it is not legally required to do so, it is important that the company maintains its integrity and reputation.

Integrating New Locations and Workers

Human resource managers need to be intimately familiar with the country's labor laws, but when the company opens a new location in another country, they need to learn that country's laws and customs as well. For example, workers in Indonesia are entitled to the same rights whether they work part time or full time.

Not only do HR employees need to ensure that local workers are trained and treated properly, but they also have to help employees who are moved to a new region to adapt to the social and cultural norms of their new location. It's important to remember that even when local laws fall short of protecting your employees, your corporate policies should protect local employees just as they do for those who have been transferred to new regions.

Gone are the days when the job of the human resources department was to adhere to local labour laws and manage local employees. Today, as the organizations cross geographical barriers and hire diverse talent in terms of age, gender, ethnicity, skills, experiences and location, the responsibility of human resources has increased multifold.

Today, human resource managers have to devise strategies that are ‘glocal’ – global yet local. So, if the company is based in Los Angeles but hiring people in India, then it has to make sure that its human resource strategy not only adheres to international standards but is also culturally appropriate. Hence, these days, globalization forms an integral module of a majority of human resource management online courses.

Also Read : The Functions of Human Resource Management

Here are various areas of how globalization is affecting Human Resource Management:

Recruitment

When the organization is doing overseas recruitment, the hiring dynamics change considerably. For instance, if the minimum educational requirement is MBA for a candidate, the same degree may vary from one country to another. It may be known by a different name, or even it is known by the same name, the grades and credits may differ, making it difficult to understand the candidate’s educational qualification.

Training

Every newly hired candidate has to be taken through training regarding the company’s policies and procedures as well as his or her job role. However, globalization calls for different training modules. For example, if you are sending a local candidate overseas, you have to train him or her regarding offshore work expectations and culture.

Labour Laws

Obviously, labour laws vary from one country to another. If the minimum wage amount is ‘x’ and maximum working hours are ‘y’ in India, then it will not be the same in China, United Kingdom, United States of America, Australia or any other country. The human resource managers are required to have a thorough knowledge of international and domestic labour laws or else the company may find itself in a legal soup.

Communication

The world never sleeps! If one country is closing its office, the other may be just opening or in full swing business hours. When a company is doing business in different countries, communication becomes difficult. Human resource department has to devise communication strategies which can establish synchronized co-ordination without requiring remote employees to disturb their time zone.

Also Read : Challenges of Human Resource Management

Expatriation

Preparing home country employees to work in a different country or vice-a-versa is quite challenging. In spite of adequate training and a competitive compensation package, the expats may not fit in the company. The recruitment, training, motivation and retention of expats call for an exclusive human resource strategy.

Human capital is the most important asset for any organization. Given that there are people’s emotions, behaviour and personalities involved, and the market dynamics are changing at a rapid pace, the challenges for the human resources department has increased several times over.

Also Read : Why is it Important to Study Human Resource Management

Here are nine major challenges and how to deal with them.

Attracting Talent

Today’s employees want to join organizations on their terms. The right employees are those who can fit into the culture of the organization. The best way to attract talent is to abreast them with the company culture and understand their workplace expectations right at the time of the interview.

Retaining Talent

The grass is always greener on the other side! With ample job and entrepreneurship opportunities available, it doesn’t take much time for employees to make a switch for a better prospect. Engage the employees, provide them work-life balance and show them a career path in the organization.

Also Read : Role of HR in Retaining Employees

Conflict Management

It’s a human tendency to clash. But, at workplaces, such unhealthy behaviour can hamper productivity. Keep the channels of communication open and define acceptable behaviour to avoid conflicts.

Performance Management

More often than not, a greater percentage of the workforce ends up being unhappy after the appraisal process is over. Instead of conducting yearly evaluation, shift the focus to continuous and constructive feedback. If required, enrol for performance management certification to learn how to make performance management more effective.

 Also Read : How to improve performance management in an organization

Managing Diverse Workforce

Today’s workforce is a mix of on-site/off-site teams and remote/virtual teams across different locations, genders, age and ethics. Human resources must percolate the shared company culture, albeit respecting the different characteristics of the workforce.

Compensation

Employees always want more – whether it is the basic salary, perks or benefits. Compensation is the primary motivator for any person. Create a system which provides competitive salaries and rewards their recognition.

Also Read : What does it take to be a Human Resource Manager

Succession Planning

What if an employee quits or is transferred or promoted? Is there someone who can fill the position quickly? Such dilemmas can be avoided by succession planning and leadership development programs.

 Change Management

Change is the only constant in life. Unfortunately, organizations face a major employee resistance when a change is implemented. When a change initiative takes place, communicate its benefits to explain to people the why and how of it.

Also Read : Change Management Process & How It Works

 Privacy and Security

Human resources department is responsible for employee privacy as well as company information security. Any leakage can have devastating effects on the organization. This can be taken care of by framing strict regulations on breach of privacy, securing data and entering into confidentiality agreement with vendors.

Sign up for human resource management certification courses online and learn more about these challenges and ways to handle them.

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