Factors In Play In The Competition For Skilled And Values Employees In Today’s Globalised Business World

Background

Discuss the key factors in play in the competition for skilled and values employees in today’s globalised business world?

The discussion suggests the key factors that play an important role in today’s competition for values and skilled employees in reference to today’s globalised business. The aim of the discussion is to portray the significance of return on Investment and the connection of human capital investment and the resource-based view of the company. The modern business today confronts complex and numerous challenges that force the organization to exploit opportunities and transform. Factors like globalization make a major impact for an organization and its human resource. Globalization has widened the pool of talent for efficient fluid workers as well as marginal labors.

Talents in an Organization are considered as the source of maintained competitive advantage that can affect significant outcomes of an organization such as employee performance, customer level of satisfaction, profitability and survival. In this context the role of Human resource is to grab the maximum outcome from data analytics and technology in order to form a global HRIS which could speculate the requirement of strategies to fulfill the needs.

The company CB&M is a prosperous consulting and accounting firm that performs activities like business strategy, auditing and accounting for their corporate clients. They have around two-hundred qualifies professional of accounting who holds degree on either Chartered accountancy or CPA. It is a part of the Industry of Australian accounting.

The industry of Australian accounting comprises of specific firms who are connected with the provision of bookkeeping, auditing and accounting systems. The services of the firms include all areas of financial activities (Australia.gov.au, 2015). The firms under Industry of Australian Accountancy also offer assistance and advice on business as well as services aforementioned. This industry belongs to those categories of industries who had narrowly escaped from the global financial crisis as there was just a marginal fall in their revenue. In fact during the strike of financial crisis globally, people started to consult the accounting industry in order to create and implement strategies of cutting cost.

The strategic HRM is a discipline which includes the practices and concepts that aligns and guides HR management philosophy, practice and tactical planning with the organizational goals focusing particularly on the human capital (Sekhri, 2010). The strategic management of Human resource provides instruction on how to erect the basis of strategic advantage by generating an efficient structure of Organization and its design (Huselid and Becker). The SHRM also creates effectual systems thinking, communication strategy, organizational culture, systems thinking and proposition of employee value which includes mergers and acquisition and downturns. The discipline also includes social responsibility of corporate and business ethics in accordance to the expression and values of decision making of an Organization.

The SHRM approach (Truss, Mankin & Kelliher, 2012):

• SHRM attempts to connect activities of human resource with measures which are competency based.
• SHRM connects the goal of an organization with the activities of Human Resource.

The approaches identify two major factors, one is the business surplus and the other is the human factors. It is widely considered that human resources are exclusively important for an organization for the sustenance of the business (Rees and Smith). In the company CB&M their employees are very much valued for their qualification and their contribution. CB&M encouraged further studies but they did not provide any kind of compensation for that. Many employees were completing professional studies which they were paying by their own. But as a result it was found that many employees are looking for further prospect of their career once they completed their course. This concluded to a high labor turnover ratio. In order to deal with this situation strategic Human Resource Management was applied.  Similarly, in organizations where there are issues on labor turnover and labor productivity the human resource management applies SHRM.

Planning on Human Resource and Strategic HRM

SHRM benefits:

1. Clarifies the strategy of business in order to chase their vision in future.
2. Increases the supply of competitive intelligence.
3. Motivates recruits and retains employees.
4. Provides opportunity to retain and develop high competent people.
5. Provides information regarding the weakness and strength of the organization.
6. Enhances the level of satisfaction for customers (Crawshaw, Budhwar & Davis, 2014).
7. Ensures a high level of productivity and surplus of business.

The strategic HRP is one of the major components of SHRM. It helps to connect between the management on Human Resource directly to the strategies applied in an organization (CHUANG & LIAO, 2010). Every organizations with a good number of employees implements plan on strategy based that efficiently guides them in to reach their mission (Lengnick-Hall et al.). The Strategic HRP helps to find the requirements of Human Resource. The integration of HRP is with business planning is supported by the management which is based on competency.

In the case study, the HR of CB&M company worked out with some strategic plans that would help them to retain their present employees and decrease the labor turnover for the firm. The proposal included a policy which was designed to establish CB&M as an established firm in regard to professional development. The proposal included necessities for funding of professional studies in finance for not more than 50 members. It also provided funding for courses in MBA and 60 hours of paid leave for their employees to study and attend classes.

The resource-based view is a perspective which helps in achieving the competitive advantage for a company. According to the proponents of Resource based view, it is ore valid to destroy exterior opportunities using resources that exists in an innovative process instead of trying new skills for every varying opportunity. There are basically two types of resources in an organization, Intangible and Tangible.

Intangible asset refers to things that cannot be touched or feel and has no evidence of its physical appearance. Things like the goodwill, the trademarks, the brand reputation, the intellectual property and things that cannot be bought form the market. For CB&M Company, its intangible assets are its reputation, its intellectual property and similar things (Chen, 2014).

Tangible assets: Those entire things that are required in a business which are tangible are known as tangible assets. Those can be easily bought in the market so that they bestow little benefit to the company in the long run because of the possibility of the competitors to buy (Stickney & Stickney, 2010).

In this view there are two significant assumptions, one is that the resources should be immobile and the resources should also be heterogeneous. Resources like capabilities and skills, which are possessed by a firm varies according to organizations (Becker, n.d.). If a firm would have possessed the same quantity of combined resources, then there wouldn’t have been any kind of competition. This scenario is like that of a perfect competition market. The competition between two giant conglomerates cites a good instance for heterogeneity. These types of competition paves way to innovation, and the more innovative style they adapt the more they establish themselves as distinguished.

In the second assumption that resources are immobile, this means that resources cannot be transferred from one place to another, but in reality resources are mobile in long run (Boyd, Bergh & Ketchen, 2009). Due to the mobility of resources, firm’s tries to imitate their competitor’s resource and implement similar strategies. Properties which are intangible in nature like brand equity, intellectual property are generally immobile in nature.

The resource-based view of the company

In view of CB&M the resources they have are the skills and knowledge of their employees. In broader sense the employees are their most important resource on which they depend. This is because the company survives on the efforts given by their employees and the knowledge they are applying in their job.  Consultancies provide analytical data and financial statements that help companies to understand their financial position. A firm like CB&M has to compete with other companies on basis of their employee’s productivity. Thus in this view strategic HRM and planning acts its vital role for maintaining their competitive advantage.

In a country’s development on economy, investment made on Human capital plays a key role. Human capital refers to the availability of personal attributes. Skills, creativity, and social habits which are personified as to produce economic value form their capability to perform labor. Collection of resources like experience, training, intelligence, knowledge, talents and skills possessed by the labors of an organization that helps an organization for its economic growth is known as human capital (Psacharopoulos & Patrinos *, 2004). An organizations primary and biggest investment is its human capital.

The return of assets is frequently being measured so as to evaluate whether the investment made has brought its proper return. Investment made on human capital is also measured, because a company expects that investing on their human capital would increase their level of productivity. The level of productivity determines the profitability of an organization hence investing on the human capital makes a significant change.

Investing on tangible assets doesn’t increases productivity but human capital does. The productivity of CB&M would increase if they invest on the benefits of human resource (Blanpain, Bromwich, Rymkevich, Spattini & Alessandrini, 2010). If they invest on buying table and chairs then the ambiance may change and it may give the employees a temporary satisfaction but in long run they would hardly affect the productivity level.

The Investment return is a general assumption and expectation of the investors on their investment. When a shareholder invests on a hare he expects a minimum return that would cover his investment. Similarly investment return also works in case of human capital. Human capital investment is not just about educating their employees but about providing facets for development of their human resource (Almeida & Carneiro, 2009). Investment on human capital can be of various types like providing formal and informal education, skill development, good morals and health considerations. While investing on these, the employer considers the risk of return (Russ, n.d.). He may or may not get a proper return in regard to his investment.

In regard to CB&M firm, the strategies suggested by the HR of the company are funding their employees for further studies. In that case it is an investment that the company will make for their employees. But there are certain risks which are involved with return on investment on human capital. Earlier the company use to encourage their employees to do professional course, and the employees after completion of their course they started leaving the organization and joined the competitive firms. Here the risk lies that even after investing a good amount of time and money on their employees, an employee would choose a better opportunity where they will have a better career prospect.

Investment made on Human Capital

Conclusion:

In today’s globalised business the major factors that play key roles in order to retain their competitive and valued employees are the strategic human resource planning, the employee benefits, the investment on human capital and the organizational structure. For the prospective of a successful organization it is very important to globalize their human capital. Companies with high skilled employees possess the potential to have access on new pool of human resource worldwide which can have a reflective influence over their structure and strategy.

Along with risk benefits also come, which can be termed as the proper return in investment. It happens when employees gets attracted to the facets and decides to stay in that firm. Similarly new talents would also find it attractive to join the organization because of its effective strategies. The availability of global human capital also depicts how firms should manage themselves in order to take advantage of the global opportunity. Giant manufacturing industries invests on their human capital in order to enhance their skills. This is identified when an organizations climatic change occurs.thi can be due to technological advancement or due to a change in strategy or organizational structure.

CB&M considers their employees as a vital factor of production and treats them as human capital. In order to retain their employees they required strategic HRM and planning which could lead them for a better future. The responsibility of a firm for its human capital doesn’t rests here in order to improve their resource they themselves also need to improve. There should be flexibility in their adaption process.

References

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