CHALLENGES OF HUMAN RESOURCE MANAGEMENT

 CHALLENGES OF HUMAN RESOURCE MANAGEMENT

These are some of the examples of challenges faced by human resource management nowadays.

·         Globalisation

·         Challenges in technology

·         Managing change

·         Human resource development

·         Market reaction

·         Cost reduction

·         Economic climate

·         Legal system

(a) Globalisation

Mergers, takeovers and competition among international industries and businesses are expanding. To remain and compete in the market, more firms are starting to explore the global market. Indirectly, this causes them to face issues such as culture, legal and business practice differences.

An organisation has to identify a human resource manager that is able to:

• perform his duties in a foreign country;

• design training programmes and development opportunities to increase manager’s understanding of foreign work practice and culture; and

• make changes to the compensation plan to ensure fair and suitable payment scheme cutting across different geographical areas and different costs of living.

(b) Challenges in Technology

Progress in technology has done a lot to influence human resource management. From manual employees to knowledgeable employees, innovation in technology has caused a sudden change in form, structure and employment needs. Knowledgeable employees need to be equipped with skills to enable them to make plans and decisions, identify problems and solve them. In many cases, employees need to be retrained to enable them to carry out responsibilities and their new roles. Therefore, an organisation needs to prepare training and development programmes to help employees increase their skills in order to fulfil the demands of a knowledgeable employee.

Aside from that, the use of human resource information technology has influenced a lot of today’s human resource management practices, such as:

• Provide up-to-date information to aid human resource management department in forecasting, overseeing and making decisions.

• Change the method of information gathering on employment; speed up the processing of information and increase internal and external communication process.

(c) Managing Change

Technology and globalisation are two main factors that force change to happen in an organisation. An organisation that always maintains its status quo will not be able to compete in a market that is fast developing and competitive. Ordinarily, an organisation has to amend the way it operates to maintain the effectiveness of its business. This can be done through total quality programmes, down sizing, re-engineering, out sourcing and mergers.

Changes can happen reactively or proactively:

• A reactive change is due to external influences

• A proactive change is the manager’s initiative to grab opportunities available, especially in a fast changing industry, such as the technology industry.

However, changes do not happen spontaneously. This is because most of us are resistant towards changes. Therefore, the human resource management department plays a role to help the change process in the organisation.

(d) Human Resource Development

An organisation needs to manage its human resource well if it intends to compete in the global market. Human resource that has economic value by way of knowledge, skills and ability gives a huge impact on the organisation. In order to form a valuable team, an organisation needs to strategise to ensure its resources are:

• knowledgeable;

• skillful; and

• experienced.

Staffing programmes must identify, recruit and select quality candidates.

Training programmes complements the staffing process to increase Employees’ skills. In addition, employees also need their own career development opportunities. Therefore, human resource management department needs to arrange suitable programmes to develop its human resource, as well as to ensure employees’ duties and needs are flexible, thus allowing for a continuous learning process and employee development to happen.

(e) Market Reaction

Fulfilling customer’s expectations and needs are important for an organisation to be able to compete in the local and foreign market. Some of the approaches often used to respond to the market are:

• implementing a total quality management programme; and

• re-engineering process.

Both approaches have direct implications to human resource. To ensure the effectiveness of the programmes, the management team needs to make some drastic changes to its human resource management programmes which focus on issues such as:

• employee motivation;

• changes to organisation culture; and

• employee education.

(f) Cost Reduction

Some of the important elements to enable an organisation to have competitive advantage and to maximise its effectiveness are cost reduction and increase in productivity. Human resource cost is one of the biggest expenditure components in an organisation, especially organisations that specialise in knowledge and services.

Ordinarily, organisations will have to rearrange their firms to reduce labour costs through activities such as downsizing, out sourcing and mergers.

Most of the time, these actions cause employee surplus, which then forces the management to reduce the number of employees through the process of ‘laying off’ staff. This issue needs to be handled wisely and fairly by the human resource management team to avoid problems and employee dissatisfaction that might damage the organisation’s performance.

(g) Economic Climate

Economic environment will influence the financial standing of an organisation, and the organisation must change its business strategy to last and compete in the market. Consequently, an organisation’s human resource strategy must also change to be in-line with the business strategy, especially human resource planning.

In the event of economic growth, demand for labour force will increase due to an increase in production. In these circumstances, organisations will experience a situation whereby the labour market is limited.

On the other hand, when an economic depression occurs, the organisation’s business is affected and the number of employees needs to be reduced through some approaches such as forced or voluntarily termination and early retirement.

(h) Legal System

Organisations must be sensitive to the legal system of the place where it operates. Any changes and job implementation must be given attention in order to avoid any legal actions. In Malaysia, there are a few acts related to the work environment such as Employment Act 1955, Occupational Safety and Health Act 1994 and Industrial Relations Act 1967.