Impact of Globalization on HRM
When a business expands its operation into other countries, the impact of globalization on human resource development and management is significant. Companies need to consider a diverse range of practical adjustments to be able to hire, train, retain and support a workforce that’s often spread throughout several countries, which often have varying cultural identities. Human Resources departments must adapt their thinking and practices to include cultural differences, foreign regulations and technological developments.
Impact of Globalization on HRM
- Globalization of Human Capital
Perhaps the greatest resource available to any company is the workforce it acquires and retains. As a company extends its base to a foreign shore, the impact of that globalization on HR procedures will extend to current workers and also to new employees. The HR department will need to increase support of its current staff, as they transfer overseas to new positions. Assistance with visas, work permits, and housing will be required, as well as training in cultural issues and perhaps language acquisition. New local talent must be acquired and developed, as well. A company’s ability to move into new markets, will depend on its ability to fill needs with skilled workers. In some situations, local workers may meet the criteria, but in other situations, they may be more looking for skilled and already-trained employees to be transferred to positions in the new overseas location. In this case, the willingness of workers to become mobile could be a key factor to productivity.
- Corporate and Cultural Differences
Another significant impact of globalization on human resource development is the necessity to consider cultural differences, both in and out of the workplace. Businesses tend to have their own corporate cultures or ways of operating, but there are societal and cultural differences between people as well. Cultural norms within a society affect the workforce and how workers view their jobs, especially in relation to time spent with their family and ideas about employment expectations. Some cultures may also have varying mores about gender roles, particularly concerning the role of women in leadership. While a female in a managerial position is not uncommon in American culture, the same many not hold true elsewhere.
Similarly, a manager brought in from the home office may not be the best person to manage an overseas staff, because they do not understand all the nuances of the local culture and what’s considered acceptable business practice. For example, in some countries, the typical work day may be quite different from the traditional 9 to 5 hours. Workers might be accustomed to starting their day earlier in the morning, taking a longer mid-day break for lunch and rest and then returning finishing their work by early evening. A manager who adapts to local culture may find better success among his employees.
- Employment and Tax Laws
Global expansion is also affected by varying tax and labor laws. HR departments need to be prepared to deal with different tax rates, benefit requirements or labor and environmental regulations. These requirements may be in addition to or even in conflict with current corporate policies, so adjustments to maintain compliance with local governments are necessary. HR managers must become experts in issues that not only pertain to their industry, but keep current with issues and government policies within the countries in which their company now operates.
- Long-Distance Communication Challenges
In a small, local business, the HR manager can ask an employee to stop by the HR office to sign a form, discuss an issue with their paycheck or to handle a policy-related issue. When managing employees over great distances and perhaps in several sites spread around the globe, HR departments face a bigger challenge in communicating with their employees. Often, they must rely on technology such as email or conference calling to relay information, thereby eliminating some of the more direct human elements of interaction. Offices are also open during different points in the 24-hour work day, so that even simple issues may take more time to resolve. Although forms and HR management software should be standardized throughout the company, accommodations may have to be made for language differences, as well.