Effects of Globalization on Human Resources Management
Globalisation is the process of integration of companies, people and culture from all over the globe. Thanks to the advancement in technology, the spread of internet, growth in international travel and enhanced communication across borders, globalisation has spread its wings in every part of the world. In business terms, globalisation means an organization enhancing its operations, its products and services for a wider market across the globe. Globalisation has resulted in organization’s having to manage diversity of people in their workforce. This change has made the role of human resources extremely important in an organization dealing with a global workforce. To train employees handle a globalised workforce, organizations are sponsoring them for HR certification courses.
Understanding the impact of globalisation on human resources can equip an organization to help the employees in better adapting themselves to changes as well as in equipping itself in managing the global business environment. There are several changes happening on the human resources front due to globalization. Some of them are listed below –
- Diversity in Workforce Hiring
Today’s organizations are working across borders. They are setting up operations as per their requirements all over the globe. If an American organization finds that setting up a manufacturing unit in India is going to be cheaper for them, then in today’s globalised market it is a better alternative to them and they willingly set up shops in countries outside of their own country. In this way, several organizations operate their business outside their countries because it is a better proposition for them. This also means that they hire a diverse workforce globally, which includes people of all ethnicities, gender, religion and cultures. A human resource professional has to be sensitised to the needs of handling a diverse workforce. It is also important for organizations to represent people from various backgrounds among their human resource staff so that the rest of the workforce can draw a connect with them. Having a diverse team also contributes to the overall quality of idea generation and discussion in the human resource function.
- Greater Emphasis on Professional Development
Globalisation means that a person in India can have suitable competition from a person in the USA in terms of job competency. As physical and geographical boundaries blur, it has become easier of organizations to outsource jobs to other countries. This means that competition has increased for everyone on a global scale. There are more contenders for one job. Therefore, it has become necessary for employees to keep updating their skills and develop professionally. They value an organization that allows them to update their skills. Hence, human resource functions today give opportunities in terms of trainings, new projects and exposure of various functions to the employees to add to their professional development.
- More Stress on Competency Training
Globalisation has opened up a plethora of opportunities for people across the globe. Today, the need for training people has become higher for human resource management. The training required has to be focused on developing the competencies at work for the employees. Human resources function needs to identify the training requirement that arises out of the modern work requirements and provide training to the employees accordingly. For example, call centre employees might need to learn a new language to handle the process of a foreign country. The human resources function has to arrange for training for such requirements from time to time. It can also need to teach the employees across the globe, how to use a particular type of global software program effectively. Training ensures a common way of functioning for all employees and smoothens out the variance across geographies. This gives the organization a competitive edge in the market.
- Better Understanding of Laws Across Countries
One of the major effects of globalization has been in terms of the understanding that organizations need to develop for the laws of the lands where they operate. Organizations need to work across various geographies and manage operations such as distribution, hiring, marketing, advertising, selling etc in accordance with the laws of that country. For example, different countries have different laws regarding the minimum wage for the employees of an organization as well as regarding the availability of benefits like health care etc. Similarly, there can be laws around taxes on goods and services. Flouting the legal boundaries can be disastrous for an organization. Therefore, it is critical that support functions like legal, human resources and others are well aware of the laws across countries. They need to abide by them as well to stay out of any kind of trouble.
Globalisation cannot be ignored, and the world is only going to get smaller. It is therefore best for an organization to prepare itself for it.
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