Impact of globalization on HRM

Human resource Management is transforming as the modern business faces numerous complex challenges due to factors such as globalization. This enable HR leaders to change their perspectives to global context. Three major factors drives globalization on human resources (Bhushan , 2014).

Shortage of talent in developed countries

Most developed countries including United State, Germany and Japan are facing long-term talent shortages mainly due to the retirement of baby boomers. There are more workers retiring than entering the labor force in most of develop countries. According to World Economic forum (2010), USA alone need to add 26 million workers to its talent pool by 2030 to sustain the average economic growth of past two decades. While Western Europe will need to add 46 Million employees. This fact challenge HR leaders in developed countries to look for talents in other countries or global. Globalization of human resource helps multinational companies either to outsource the works to developing countries where human resources available or allowing immigrants to work for the companies. According to international organization for migration, there were 214 million international migrant in the world in 2010. This is an opportunity for HR leaders in developed countries.

Availability of low cost labor from emerging countries

Global population growth differs greatly between developed countries and developing countries. According to Mckinesey Global institute (2015), there are approximately 33 million potential professionals in developing countries and this pool is growing at the annual rate of 5.5%, while in developed countries just growing at 1%. India produce engineering professionals twice more than US, Russia produce 10 time as many finance and accounting professionals as Germany. In addition, 19% of the 33 million professionals in developing countries are suitable to work in multinational companies due to lack of language skills, low quality of educational system and lack of culture fit. HR leaders face difficulties on fixing professional to their own company culture.

Technological progress

Globalization is made possible by the development of technology such as internet, enterprise resource planning, big data, etc. global human resource information system and social media ( Linkedin) which collect and store large amount of data about employees throughout the globe, this enable HR leaders to analyze and get business insights, predict future needs and develop strategies accordingly. This is an opportunity to for the HR leaders to talents all over world.


Globalization impact human resource management in different ways, which challenge HR leaders and give opportunities too.

Comments

  1. Nismi Rauf30 May 2019 at 10:20

    Yes if we gained the knowledge accordingly opportunities are high

    ReplyDelete
  2. Apsara Wickramarathne11 June 2019 at 00:58

    With the technological improvement surely there will be a vast impact on HR strategies and practices where HR professionals will be lead to adhere new techniques and practices in order to make the success of the organizations.

    ReplyDelete

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