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The Challenges that Face HR in a Globalized Economy

Posted on June 1, 2011
Filed Under Global Staffing Perspectives, Human Resources | 1 Comment

The symbiotic relationship between the employee and the employer is essential but it seems that, with the myriad effects of globalization, one of the first things to suffer is this essential relationship. International human resources is a complex paradigm or even a web of interconnected relationships. It’s difficult to manage or ascertain the needs of a worker from making a phone call or a reverse phone lookup. Organizations are constantly looking for better strategies and overcoming various language and cultural barriers but sometimes the approach needs to be more concerned with the ‘human’ aspect of the equation.

Good HR practices and employee/employer relations are paramount in maintaining a happy, healthy, and productive staff. By maximizing and personalizing ties between these two parties will ensure a companies health and success by ensuring the recruitment and retention of quality staff. In this, one hand washes the other, approach every party stands to benefit and in a world where globalization is minimizing these essential relationships, it has become increasing apparent of the absolute necessity and the positive affects of quality HR.

Richard Polak discussed some of the internal approaches to HR in a paper entitled, The Globalization of Human Resources. In this piece featured on The Business Forum he discussed the four ‘C’s of international HR.

? Compete: The idea is that all companies should approach their relationship as a competition for their employees. Keeping quality workers is essential to success.

? Compensation: How are your workers going to be compensated and is it adequate to meet the standards and needs of your employees?

? Cost: You have to factor in the cost of this and manage your company’s expenses and output to make the worker and expense of the worker a viable thing.

? Corporate Culture: How does the corporate culture define your approach and how effective is it with the employee?

Some of these strategies recognize the international relationship between private companies and workers from across the globe. What works in one country doesn’t necessarily work in another but these four basics are the principals of what keeps the employer aware of its approach. The employee is the resource and seeing their relative happiness as an essential component is what will, ultimately, ensure productivity and success. Too often the desire for a strong bottom line becomes the main objective. With cheaper labor overseas, it’s easy to mistake people for commodities.

Globalization has created new challenges for developing and postindustrial Western nations but it hasn’t made it impossible. This desire for human capitol isn’t going to slow down any time soon and it’s essential that companies recognize the ever-changing climate of this relationship. Ignoring the needs of the workers is an effective short-term strategy and will have a positive affect profit margins but it won’t have the kind of longevity of companies that view the human element as a resource and not just a necessity. If not approached with delicacy, companies will learn the price of poor practices and drive away skilled labor and will wreck their company’s image, brand, and future.


One Response to “The Challenges that Face HR in a Globalized Economy”

  1. Russel Stuart on October 30th, 2012 2:02 am

    The paper by Richard Polak mentioned here says the right thing about managing people in a globalized economy. All the factors the author mentions, rightly, are like pieces of a jigsaw. If there is a gel that binds all these factors, it has to be organizational goals and vision. All employees need to be focused on these; yet, there is a huge difference in the way communication is made and perceived in different cultures. Homogenizing and standardizing communication in the backdrop of cultural gaps is one of the big challenges for HR in the globalized economy.