Opportunities and Challenges of Human Resource Management
*Susmita Das
Abstract
Today, the field of Human Resource Management (HR) is experiencing numerous pressures for change. Shifts in the economy, globalization, domestic diversity, and technology have created new demands for organizations, and propelled the field in some completely new directions. However, we believe that these challenges also create numerous opportunities for HR and organizations as a whole. Thus, the primary purposes of this article are to (a) examine some of the challenges and opportunities that should influence the future of HR, and (b) provide an overview of the very interesting articles included in the special issue. Also consider implications for future research and practice in the field. “It's been a long time coming. But I know a change is come.”
Keywords:Future of human resource management, Globalization, Knowledge economy, Diversity, Technology
-------------------------------------------------
1. Change from a manufacturing to a service or knowledge economy
-------------------------------------------------
One of the major challenges influencing the future of HR processes is the change from a manufacturing to a service or knowledge-based economy. This new economy is characterized by a decline in manufacturing and a growth in service or knowledge as the core of the economic base. A service economy can be defined as a system based on buying and selling of services or providing something for others . A knowledge economy is referred to as the use of information or knowledge to generate tangible and intangible value. Some economists argue that service activities are now dominating the economies of industrialized nations, and knowledge-intensive services or businesses are considered a subset of the overall service economy. The skills and abilities of knowledge workers are key to the success of new organizations, the transformation to a knowledge economy provides opportunities for the HR function to become a priority in organizations. As a result, we believe that HR will become more of a critical function in organizations, and the field should be viewed as more essential to the overall success of the organizations.
-------------------------------------------------
2. Rise in globalization
-------------------------------------------------
A second factor calling for changes in HR processes is the rise in globalization. Globalization in this context refers to organizations that operate on a global or international scale . Organizations operating in a global environment face a number of new challenges including differences in language and culture of employees, and variations in social, political and legal systems. Multinational corporations (MNCs) are large companies operating in several countries that are confronted with new questions, including how to create consistent HR practices in different locations, how to develop a coherent corporate culture, and how to prepare managers to work in a diverse cultural environment. It is anticipated that the numbers of MNCs will continue to expand over time, and HR practices will need to be congruent with these new multicultural and complex contexts. As a result, we expect that future research in HR will focus on the effectiveness and acceptance of HR practices in global environments.
-------------------------------------------------
3. Growing domestic diversity
-------------------------------------------------
Apart from changes in the economy and globalization, organizations are also faced with major shifts in the composition of the world population. In particular, it is expected that our population will be older and more ethnically diverse by 2060. For instance, by 2060 one in five will be 65 years of age or older, and the number of working age people in the population (ages 18 to 64) will decrease from 62.7% to 56.9%. Along with the age-related changes, the work values of younger generations are expected to be different than previous groups (e.g., Baby Boomers). As a result, organizations will need to develop HR practices that are aligned with the primary goals and the values of multiple generations of employees
-------------------------------------------------
3.1. Increased age and generational diversity
-------------------------------------------------
Along with the aging workforce come many new challenges for HR. For instance, given the shortage of skilled workers there is a growing concern about the retention of skilled baby boomers. One reason for this is that baby boomers often have unique skills and abilities that are critical to organizational success, and companies are justifiably worried about retaining them in their roles until qualified replacements can be found or trained. In order to retain these individuals, organizations will need to increase flexible work arrangements, allow part-time work, provide a supportive environment, and employ recognition systems to motivate them to stay with the organization.
-------------------------------------------------
3.2. Expanded ethnic diversity
-------------------------------------------------
There will also be dramatic change in the racial and ethnic make-up of our society. Today, ethnic minorities make up about 37% of the population, but estimates indicate they will comprise 57% of the nation by 2060. It has also been projected that the world. will become a majority–minority nation by 2043, and the numbers of Hispanic–Americans (Hispanic) will more than double in the coming years. By 2060, one in three people in the world will be Hispanic.
-------------------------------------------------
Even though there has been relatively little HR research on the cultural values of ethnic minorities in the world, some studies found that, on average, they have different values. For example, Hispanics, African–Americans, Asian–Americans, and Native Americans are, on average, more likely to endorse collective values than Anglo-Americans.
-------------------------------------------------
4. Emerging use of technology
-------------------------------------------------
Over the past 30 years, one of the major drivers of change in HR has been the increased use of information technology (hereinafter referred to as technology) to collect, store, and utilize data for decision-making. Technology, especially, the World Wide Web, has transformed key HR processes in organizations (e.g., e-recruiting, e-selection, e-training), *Faculty MBA Sudhananda College of Computer Science and Management, Bhubaneswarand modified the nature of jobs and the relationships between individuals and organizations. For example, it has enabled organizations to use the Internet to advertise jobs, and made it possible for applicants to apply for jobs online. In addition, organizations are using various forms of technology to deliver training to employees (e.g., the Internet, intranet systems, video conferencing, online simulations. Research on the use of technology to facilitate HR processes indicated that it typically enhances efficiency, and decreases costs associated with HR transactions. However, some researchers argued that there is no clear evidence that it helps HR meets its primary goals of attracting, motivating, and retaining talented employees for a detailed discussion of influence of technology and the future of HR.
-------------------------------------------------
In spite of possible limitations associated with using technology to manage HR processes, it will continue to transform the field in the future. Furthermore, it can be argued that new technologies will emerge that should decrease some of the major drawbacks associated with current systems. For instance, a number of researchers argued that the use of new interactive technologies (e.g., Web 2.0, social media, virtual simulations or job fairs, chat rooms, cloud computing, mobile devices) should decrease some of the weaknesses associated with current systems. For example, the use of social media, chat rooms, and high definition cloud computing should enable applicants and employees to engage in an interactive dialogue with recruiters or managers. Similarly, the use of virtual reality should provide applicants with opportunities to attend virtual job fairs, give supervisors the ability to mentor subordinates, and offer trainees the chance to participate in virtual training simulations. All of these virtual environments should increase the degree to which technology-based HR processes are personal, flexible, interactive, engaging, and decrease the interpersonal distance between employees and supervisors. Although these arguments seem plausible, research will be needed to examine the effectiveness and acceptance of these new HR processes.
-------------------------------------------------

-------------------------------------------------
5. Overview of articles in special issue
-------------------------------------------------
Factors that should influence the future of HR in organizations, including changes in the economy, globalization, domestic diversity, and technology. These are only a few of the challenges that will affect the future of the field. The following articles consider more issues that are likely to shape HR in the future.
-------------------------------------------------
*Faculty MBA Sudhananda College of Computer Science and Management, Bhubaneswar