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Nolan et al., (2007) mentioned that globalization has drastically altered the business environment through the fall of national borders and the rise of multinational organizations. Through this environment global competition has intensified, new markets have emerged and the flow of international labour has increased (Friedman, 2006). According to Watson (2007) in the near future, liberalisation is expected to continue along with standardisation of business language, processes and regulations. Coupled with technological advancements associated with increasing rapidity to market will continue to shift the basis of competitive advantage towards creative and innovative practices (Florida, 2002).
Today, it would be difficult for any organization to achieve and sustain effectiveness without having an efficient Human Resource Management programs and activities. Both organizations and individual are facing with increasing rates of changing coupled with intense global and competitive market environments which led to new challenges .According to Iversen (2000) changes in workforce demography, technology and other environmental aspects are creating the need for new structures and management practices, which contribute to organizational commitment and flexibility
Lastly, as the importance of organizational effectiveness is within an international context, it is imperative to investigate the challenges facing human resource management within a global economy. While these challenges exist not only because of globalization, but also due to technology and telecommunication advances, deregulation, diversity and other workforce changes, as well as trends in the nature of work and legal issues (Dessler, 2000).
The increase of independent worker and self employment
Nowadays, people tend to have more freedom in terms of whether to work or not, depending on their particular circumstances, than ever before. In addition, more people are choosing to work on a freelance, contract basic or to work part-time. They have more choices with regards to who they work for, the kind of work they do and for how long they are prepared to work. With this portfolio working also reduces a person's dependency on an individual employer and creates a workforce more able and predisposed to shape its own careers and lifestyles. Hence, people are able to exercise greater control over levels of discretionary effort and are willing to engage in negotiations over what has become known as the psychological contract (Hiltrop, 1996; Castells, 2000).
Balancing work and life assumes relevance when both husband and wife are employed. Travails of a working housewife are more than a working husband, thus balancing it is becoming a major challenges. So there is a need of a programme which is capable of balancing work-life and is supposed to include a childcare at or near the workplace, job sharing, care for sick children and employees, on-site summer camp, training supervisors to respond to work and family needs of employees, flexible work scheduling, sick leave policies, variety of errands from dry cleaning, dropping children at schools, making dinner reservations etc and many more like the same or other.
Workplace motivation is an important aspect as it influences people to do things which help to achieve organizational goals. For instance, in order for an individual to be motivated to complete organizational task effectively, their needs must be satisfied and met. Due to each individual may have different needs so different motivational tools must be utilized by the organization in order to encourage their employees to put in the needed effort thus increase productivity for the company.
Organization survival and success are measured by the contribution from motivated employees in such a competitive market environments and changing workplace. Basically job characteristics, working environment and appropriate organizational reward system are the factor of motivation. Therefore the strongest motivational factors which can influence both job satisfaction and employee motivation are through a reward system wihch will affects the job satisfaction by making the employee more comfortable and contented as a result of the rewards received.
Changing Workforce Dynamics
Normally, physical relocation is required and with the increasing number of dual-career professionals will limits individual flexibility in accepting such assignments and as a result may hinder number of dual-career professional's. With that limitation in individual flexibility in accepting such assignments may also hinder organizational flexibility in acquiring and developing talent. Some demographic changes in the workforce having their own implications to the HR managers are:
Increasing number of working mothers
a steady decline of blue-collar employees who are giving way to white-collar employees
Increasing awareness & education among workers
Changes in the external regulation of employment
The misused of power by managers in areas such as hiring and firing, promotion and payment has been reduced by developments of legislation that give greater rights to employees and create new responsibilities for employers. Important examples of this trend are to be found in the areas of race, gender and age discrimination, employment protection, the treatment of pregnant women and trade union membership. One extreme example of the influence of the law on employment decisions can be found in the recent case in which the Swiss giant Nestle was ordered by a French court to reopen a loss-making plant, employing 427 workers, which had been closed in June 2005 (Evans-Pritchard, 2005). Despite sustained losses over several years, and a commitment either to find the employees jobs in other parts of France or to offer an early retirement package, the judge ordered the company to restart production and re-employ the workers. This decision was described by Nestle as unbelievable and unprecedented. While such extreme cases of legal intervention in business and employment are rare, the trend within the European Union to limit management's freedom to take rational business decisions where these threaten the legitimate interests of employees is increasing.
Changed Employee Expectations
Nowadays, employees demand empowerment and expect equality with the management. Krafft and Mahtrala (2010), states that it is only through true empowerment that staff will really contribute to the changing needs of a business, since they will then be doing things because they understand them and for the right reasons, thinking and reflecting on the changes and their likely impact, and above all feeling at ease with the implementation of change.
Outsourcing HR Activities
The trends towards outsourcing have been caused by several strategic and operational motives. Outsourcing has also been used to help reduce bureaucracy and to encourage a more responsive culture by introducing external market forces into the firm through the biding process. It is a big challenge before the HR manager to prove that his/her department is as important as any other functions in the organization. The relevance of HR is at stack.
The challenges and replacement of physical power and manual skills by the power of knowledge, creativity and intellectual capital
Knowledge-based industries are becoming more important together with the rise of the number of knowledge workers is creating a different kind of labour force, which has different requirements and expectations of work, and different expectations of how it will be managed. Knowledge workers can be seen to be different from other professional groups because, unlike those who draw upon a distinctive body of knowledge and work from this, the knowledge worker works with knowledge not only their own, but that generated and used by others, generated through such mechanisms as 'communities of practice' and professional networks.
Employability and Continuing Education
This is a major area of challenge to most employers, especially those who employ large number of staff. Staffs have to take retraining in order to adapt a constantly changing external environment. It is a question of mind-set, working environment, and attitude towards self responsibility. The future will be characterized by the following needs, amongst other;
The need to handle increasing complexity
The need for continual enhancement of the management skill sets known as Life-Long Learning for example, the ability to adapt to changing environments, challenges and technology
The need for a positive attitude to newly emerging opportunities as managers themselves has to become life-long learners.
Recruitment and Retention
Employee recruitment and selection is one the most vital HR functions as it is difficult to attract highly educated people. Next, retention focuses on the goal of keep well performing staff in the company. This depends not only on interesting work, fair compensation, and a motivating climate and management culture, but also on transparent and achievable career paths combined with a supportive management that provides guidance.
Challenges of new technology
With latest and advanced technology tend to reduce the number of jobs which require little skill and at the same time increase the number of jobs that require considerable skill. This shift we refer to as moving from touch labour to knowledge work. This will need to displace some employees and while other requires to be retrained.
Challenges of globalization
Globalization influences a significant portion of economy and affects the free flow of trade among countries. Besides that globalization also influences the number and kinds of jobs that are available and requires an organization to balance a complicated set of issues related to managing people with different cultures, geographies and legal environment.
Its value is getting more important issue because of increase in the number of young workers in the work-force, increase in the number of women joining the work-force, increase in the proportion of ethnic minorities in the total work-force, increase in mobility of work-force, international careers & expatriates are becoming common, international experience as a pre-requisite for career progression to many top-level managerial positions.
Human resources management approaches are not static due to they are not made one time and hold good forever. As a result they will have to undergo systematic changes in order to meet the requirements that may be happened in the future. For instance the methods that worked well in the past or now may not necessary work well in the present as operationally effective currently may need readjustment in order to cope with future needs. It is wise to have prior preparations by foreseeing possible changes and what required for the future.
It is expected to be on the rise as the future workplace also known as the virtual office is characterized by creative and flexible work arrangements. As more employees tend to work off-site, there will be an increase in emphasis on performance and results as opposed to the number of hours worked. Besides that, off-site employees can expect to attend fewer meetings and as a result specified work will become much more collaborative and as a result management will have to spend nearly all its time managing cross-functional work.
While organizations are growing in term of size, complexities and automation (computerization), it is important to examine:
How technological development affects the specification of jobs in terms of different requirements of education skill required and organizational structure performance control. The suggested methods for instance including selection, personnel recruitment, analysis of job, developing compensation plans and appraisal systems.
The strategies in ensuring employee acceptance of the programme are vital through the introduction and management of technological changes.
Changes in the Socio-Cultural expectations of the work force
These include changes in the compositions of work force in terms of their education, social background, and roots in urban setting and exposure to larger democratic culture of our country, all of which bring about changes in their expectations, attitudes and value-orientations which have bearing on the approaches to Human Resources Management.
Challenge in Human Capital
Human capital is intangible and cannot be managed the way organization manage jobs, technologies and etc. As employees own their own human capital, so if valued employees leave a company, they will take their human capital with them, and any investment the company has made in training and developing those people is lost.
Increasing Shortage of Labor
After the year 2010, the growth rate of workforce is projected to be declining even further. The annual growth rate is projected to be only 0.4 percent which is the lowest in more than a century. Therefore it is important to recognize that these statistics are very predictable based on the knowledge of birth, immigration, retirement, and death rates. Besides that, the terrorist attack of September 11, 2011 in the United States has caused the immigration laws to be more aggressively administered and as a result the immigration opportunities for skilled positions have been drastically reduced.
To conclude, managing human capital is an ongoing challenge, especially as social, political and economic events take their toll. Strategies must continually be redefined to deliver improved return on investment in human capital. As HR professionals work within their own organizations, they must also cope with good and bad economies, new technology, and the social issues global, regional and national which affect their organizations.