The Effect of Globalization on HRM

What is globalization?

Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world.

Impact of Globalization on Human Resource Management

To overcome the seriousness of the competition through globalization, a knowledge based economy emerged instead of the previous domain. Globalization is further emphasizing greater diversity. Companies and its Human resource professional have a great challenge in managing their employees.

Innovative new technologies or software have introduced to assist human resource professionals to manage the processes involved in globalization. But, there are some challenges faced by the businesses. The human resources department must learn to recruit and retain talented employees on a global scale. So, company must cope with changing demands. Human resource professional will have to predict and manage culture-fit policies.

Companies are focusing on people with the right profiles as also those who are more capable.

With the great impact of globalization, demand for people has increased for highly skilled jobs, or positions that require specialized knowledge. It becomes difficult for human resource professionals to locate such people in the nearby areas, they have looked for them globally. HR professionals increasingly are tasked with operating new computer systems required to manage a global workforce. Human resource professionals must spend a considerable time and effort to learn new platforms when their companies rely on the latest software to manage a worldwide workforce.

Another challenging aspect of globalization on human resource professionals is the need to discover and learn the cultural differences at play with their new global workforce. They must know how best to communicate company goals and missions, integrate diverse value systems into their companies and coordinate the activities of all their employees to achieve their goals. 

With advancement in technology, change in use of technology is also required. It becomes necessary for the organization to use the latest techniques and software. The organizations are tasked with operating new system software. This requires considerable amount of time and effort to make the employees learn new platforms. Even the employee retention is of top concern for both international and domestic companies.

No doubt, Internet has made global communication simpler, but time zones have not. HR must devise ways to deliver and communicate vital information in a timely manner. To meet this challenge, Human Resource department must deliver the emergency information through email alerts or telephonically, so that no communication gap occurs.

Certain training programs needed to be devised to deliver training to the employees sitting in distant locations. This can be achieved by the virtual training concept, which can be conducted through online videos or teleconferences. The other challenge for the companies is if they want to send an employee abroad for work purposes, they must make suitable arrangements for him which might even include asking him to develop new language skills.

The most important thing that needs to be considered by the organizations and a company is to understand and apply the laws of different jurisdictions to a particular organization or company. There are not only tax and labor laws to be considered but also regional and local laws that apply to companies that operate in different states or different countries. Hiring employees at branch locations in different locations might change the requirements on minimum wage, tax allowances or working hours. Understanding and following of these laws is vitally important as it has a great impact on the reputation and working of the company or organization.

Source: https://www.technocreats.com/blog/67/impact-of-globalization-on-human-resource-management