Competitive Challenge and HRM

While the global economy has presented unprecedented opportunities, it has also presented many new challenges to the Human Resource department. In a global, complex, dynamic, highly competitive and extremely volatile environment most organizations are facing several global challenges related to:

  1. Workforce diversity: For multinational companies who have operations on a global scale and employ people of different countries, ethical and cultural backgrounds, it is extremely essential to manage workforce diversity effectively. The challenge for Organizations is to capitalize on the diverse body of talent and transform it into an asset. People coming from diverse cultural backgrounds, gender, age, language, ethnicity, lifestyle can bring in innovative ideas and perspectives to the Business. The goal is to develop effective working relationships with people from diverse backgrounds at work. Organizations should identify and overcome the barriers that have inhibited the employment, retention, development and promotion of diverse groups in the workplace.


  1. Technology: Technology changes the way businesses operate. Technological advances often create employee resistance because new technology frequently benefits some employees while leaving others behind. This is because technological advances reduces the number of jobs that require little skill and increases the number of jobs that require considerable skills. This means displacement of some employees and retraining for others. In addition, information technology has influenced HRM through human resource information system ( HRIS) that helps in the processing of data and making employee information more readily available to the employees.
  1. Training: HRM is confronted with dynamic changes in approaches and methodologies in training and development. In the global scenario, training has taken a new connotation. It is more than identifying the training needs and giving the appropriate training. It is foreseeing and anticipating the requirements and develop suitable training so that the employees are well equipped to handle the challenges beforehand. Companies have to invest in training delivery methods that facilitate digital collaboration.
  1. Worker productivity: Increasing worker productivity through HR programmes, policies and techniques remains a challenge. Progressive and innovative managers now achieve productivity gains with human resource management techniques that go beyond pay incentives. Increased worker motivation and satisfaction can increase worker productivity. This can be achieved by introducing quality of work life concepts and by tailoring benefits to meet the needs of employees.
  1. Quality improvement: Implementing TQM was earlier the sole responsibility of specialists. However, today making quality improvements across the entire firm can be an important function of the HRM department. If the HRM department fails to recognize and act on this opportunity ,it may result in the loss of TQM responsibilities o other departments with less expertise in training and development. The ultimate result would be an ineffective TQM strategy. Thus, it is essential for HRM to act as a pivotal change agent necessary for the successful implementation of TQM. The HR department needs to develop and deliver the long term training and development necessary for the major organizational culture shift required by TQM.
  1. Retention: Key employee retention is critical to the long term health and success of an organization. Many Organizations fail to identify the intrinsic motivators for employees, thus failing to attract them. It is therefore, important for organizations to plan and implement new approaches and employee retention plans to retain the most effective manpower. It is also essential to have a valuing and positive attitude towards employees. Retention requires competitive salary and great benefits.
  1. Outsourcing: Organizations, both big and small are realizing that outsourcing is a key to bring down costs and add value to the business. It allows businesses to focus on its core competencies and thereby identify new areas for growth. Organizations that can manage diversity better tend to be more flexible and are more open-minded.
  1. Talent management: Managing talent has become a critical human resource challenge. Organizations in both developed and developing economies are facing increased competition for high performers. In order to address this challenge, companies have to boost global sourcing of staff. Talent management challenges relate to talent flow, managing two generations of employees i.e. the older or mature workers and younger workers; and a shortage of needed competencies. The ability to attract, develop and retain a needed supply of critical talent is a challenge facing all organizations. Managing global talent and maximizing the talent of individual employees can create a unique source of competitive advantage.
  1. Balancing work life: work life balance has become a predominant issue in the workplace. Employers need to understand that achieving a balance can lead to great results with a well motivated workforce delivering quality services. Employees are now making job choices based on flexible working hours and emotional gratification. The responsibility is on employers to think creatively about how it can be best used to benefit both the staff and the organization.
  1. Globalization: Globalization has an impact on the number and kinds of jobs that are available in the economy. In this scenario it is important for Organizations to address issues related to managing people in different geographies, cultures, legal environment, and business conditions. HR functions such as selection, recruitment, compensation, training and the like have to be adjusted to take into account the differences in global management. Due to globalization HR managers have an opportunity to recruit employees from around the world and they also the responsibility to ensure an appropriate mix of employees in terms of knowledge, skills and culture. Globalization poses challenges in terms of workforce diversity, managing outsourcing and downsizing of employees, managing productivity, quality, and flexible working hours.
  1. Organizational restructuring: In order to become more competitive, a growing number of organizations are going for restructuring like mergers and acquisitions, closing facilities etc. The focus has been to flatten organizations by removing several layers of management and to improve productivity, quality and service while also reducing costs. As a result jobs are being redesigned and employees affected. One of the challenges that HRM faces here is dealing with the human consequences of change. Change appears threatening to many people, which makes it difficult to gain their support and commitment to implementing changes. However, there are a number of steps managers can take to overcome resistance to change like education and effective communication.


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