Human Resources Management at International level plays a prominent role in the multinational companies. The companies require the IHRM to cope up with the competitive edge on their competitors globally (Harzing & Pinnington, 2010). The companies required Human Resource Management for studying recruitment, selection, training, and development; therefore, to have proper HR functioning in the host company, it has been tactically planning the Human Resource Management Initiatives (Reiche, Harzing & Tenzer, 2018). Most of the companies are expanding to the markets of overseas with the motive to expand their base of the market. Therefore, management of human resources in the overseas countries has stood a hydra-headed impasse to the management (Bratton & Gold, 2017).
It is defined as guiding and managing the humans and the collection of activities that help in the attainment of a company’s goal from the aspect of domestic and worldwide. It is the department which helps the companies to achieve desired goal by selecting right people at a right place with the right time (Brewster, Chung & Sparrow, 2016). Human Resource helps the employees to keep motivated towards their work to enhance productivity in the organization. The main reason behind the concept of international human resource management is to deal with the issues of complex nature that being the development of management techniques in the host countries where varieties of cultures, different legal system, and economic system present. The human resources management is the most stimulating task to a business (Tung, 2016).
There are certain challenges that management of international resources are facing in managing or handling the complicated issues such as issue of globalization, changes in demographics and so on but the three major challenges are changes in technology, employment retention, and economic conditions.
In the ensuring part, there will be a detailed discussion on the major challenges faced by the International Human Resource management that create and affect the HRM practices for Multinational Corporation.
Most of the firm has developed a deeper focus on international with the rise in the pace of technological advancement. IHRM is the effective tool for utilizing the human resources. In the market, the organization faces the issue in managing Multinational Corporation. Various new challenges occur due to the development of globalization (Luthans & Doh, 2018). Therefore, IHRM plays a prominent role in managing the complex issues of the Multinational Corporation. The concept of IHRM extended to the management of Host Company with the coordination at international level which generates the development of global leadership. Indeed, the concern issues in IHRM are those of standardization or consistency within diverse social and cultural environment (Sheehan, 2014).
Therefore, to determine the achievement and disappointment of the global business, human resource management is the major factor which increases the importance of the international role of human resource management (Tyson, 2014).
In the recent scenario, the international human resource management is facing certain trends and challenges such as the issue of globalization, changes in demographic, changes of technological in the market of employment, changes in technologies which provide knowledge on how work is undertaken, distribution of income, education, smart work, (Wilton, 2016). But the major three trends and challenges faced by the international human resource management are explained in details in below points:
Technology
In the global business, changes in the technology are the major challenge faced by HR management. This embraces everything from an incongruent system that does not communicate impeccably with each other. Such challenges are explained in below points which are as follows (Jackson, Schuler & Jiang, 2014):
Technological Changes in the employment market
The change in technology provides a threat to the organization. Some of the people required to work in a location of central office and are instead able to do their job slightly. These trends enhance the diversity of workplace which required more sophisticated management practice of people.
Technological Changes in how work is undertaken
The workforce structure is also changing in the recent scenario. The power of technology created a great impact on the employment market. It causes a permanent loss of a job in the middle tire and at first job entry level. The specific skills related to the company are becoming out-dated which involve the automotive workforces and the further reskilling burden will be heavier.
Expensive and time-consuming
The IT specialist has a significant intervention in the off-the-shelf software packages that manage the aspect of HR rarely to the other system. Therefore, it adds to the hiring cost of the company. Over the time, the factor in maintenance, manual transfer of data between individual software systems and software upgrades generate extra cost which increases the total price tag quickly.
Regulatory Compliance Issues
In the recent scenario, the organization has to manage the forest of state, federal, and local regulation which is related to the employee. The HR specialist has to stay abreast of regulatory changes which can be a full-time job. The outdated and non-integrated system of HR cannot propose timely resources or real-time guidance on issues such as paid sick leaves or disability rules.
Other Perspective
The advancement of technology has also some relief for the HR manager. The points are explained below (Stone, Lukaszewski & Johnson, 2015):
Native mobile apps – Communication in offices has not evolved much since e-mail is being used. There are certain apps which have been created by which an employee can access the same through smartphones. Native app technology implies easy access to important documents, the ability to work offline without an Internet connection, receiving notifications and even the ability to take notes directly on a phone/tablet.
Social media recruiting – These days with the help of technological advancement, recruitment team has increased the horizon of recruiting employees via different channels such as LinkedIn, Twitter and Facebook and so on.
The HRM in the Multinational Companies is becoming a complex field. In earlier the employees were concerned with their economic survival but in the recent scenario, the employees seek to get more concern for their earning and opportunities. They are more concern to balance between their work and family life. It becomes domineering for the manager of HR to deliberate numerous features for management and recognizes the reason for operative turnover (Collings, 2014).
The company is now understanding cost implication and the soft tissues committed to employee’s turnover. The high rate of mobility induces the recruitment process at the high cost. The indirect cost also involved with turnover such as a decrease in productivity and missed opportunities. In the recruitment and selection process, the cost of hiring an employee or replacing an old one can be as high as $1000 for a position that pays $65,000. Therefore, the HR is contributing directly to cost inhibition strategies in the organization. The hiring of employee is not the only challenge for the HR retaining them is also one of the challenges that the HR manager is facing. It is the main challenge because of a certain reason:
Workforce Contingency
In the global world, the employee prefers to work in a contingency environment. It includes temporary contract, part-time and work at home employees. It is a challenge for the HR to maintain such employees and make them feel that they are the asset of the business which helps in retaining them for long.
Talent Scarcity
The personnel with high profile and technical understanding are greatly needed in the competitive market. In the company, the HR has to face the challenge to maintaining such personnel in the organization.
The demand of expert employee
Increase in mobility also has a benefit for the HR. It would be easy for the HR to search the professional personnel in the competitive market.
Employee Engagement and Productivity
The employee knows that achieving target can lead to a positive career thorough that they can move in a more desirable location or company. Through such rewards, the productivity level increased and engagement of employee towards work also improves.
Development of Employee
Through developing a mobility program, the employee can enhance their own skill and experience by opening doors to other departments. As a result, the value of the organization ‘Human Capital’ is enhanced which cover both the long term and short term.
The factor of economics also regarded as a challenge for the global human resource management. Every country has their own economic system; the HR has to make policies and procedures according to the economic system of the company. It the biggest challenge which the HR has to face in the MNCs. On the socialist system of economics, the management of the organization concentrates on the elimination of unemployment by sacrificing the efficiency and productive which directly impact on the success of the organization. There are certain challenges of HR which are explained in the following points (Poole, 2009):
Employment Growth Opportunities
In the country with economic growth, there are great opportunities for employment in the organization. The HR will able to manage the employees in the organization efficiently and effectively.
Company Growth
In the country with the efficient economic system, the HR of the MNCs is able to contribute towards the growth of the economy. Every country has different labor cost, it helps the HR to manage human capital accordingly and utilize their talent according to the requirement of the company (Poole, 2009).
The Trends and Challenges faced by HR manager at international level generate cultural differences and similarities in the organization. These are explained in below points (Budhwar & Sparrow, 20011):
Evaluation
In the whole discussion, it is evaluated that the changes in the technology, economic and mobility issues are the biggest challenge for the HR manager. The uncertainties in the international market create a great impact on the performance of the organization. The changes in the environment have both perspectives positive and negative but the challenges faced by the HR manager have greatly affected the performance of the company.
IHRM involves different cultures in different countries which give the opportunity to understand different horizon and the thought process which. It provides a wider approach to think and implement new policies and procedure.
There are certain things that the HR manager should adopt to cope up with the challenges the manager faces in the multinational companies. These points are explained in below points:
Conclusion
As per the above discussion, it can be concluded that IHRM is a complex process and it should be managed effectively by an organization. From the above discussion I have learnt that, an increasing trend in the business expansion which is beyond the boundaries of home countries, it has given a lot of exposure to other countries to explore new opportunities and methods. International human resource means the management that working across home boundaries to create and administer strategies, practices, and policies that can be applied to a global workplace. IHRM mainly focuses on the managerial responses, that are beholding at forces for modification and the current global working environment that have implications for the way in which, people are being managed in international business. I have analysed that IHRM also plays a significant role in holding companies together globally also facilitating different companies in serving functionalities for operations to perform consistently whenever it is essential.
References
Bratton, J., & Gold, J. (2017). Human resource management: theory and practice. New York: Palgrave.
Brewster, C., Chung, C., & Sparrow, P. (2016). Globalizing human resource management. New York: Routledge.
Budhwar, P. S., & Sparrow, P. R. (20011). An integrative framework for understanding cross-national human resource management practices. Human Resource Management Review, 12(3), 377-403.
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Harzing, A. W., & Pinnington, A. (2010). International human resource management. London: Sage.
Jackson, S. E., Schuler, R. S., & Jiang, K. (2014). An aspirational framework for strategic human resource management. The Academy of Management Annals, 8(1), 1-56.
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Sheehan, M. (2014). Human resource management and performance: Evidence from small and medium-sized firms. International Small Business Journal, 32(5), 545-570.
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Tung, R. L. (2016). New perspectives on human resource management in a global context. Journal of World Business, 51(1), 142-152.
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