There are three types of challenges of HRM, which we can see in today’s current environments. Let’s check them below. We may also call them futures challenges of Human Resource Management as well.
- Environmental Challenges
- Organizational Challenges
- Individual Challenges
Future Challenges of HRM
Let’s check below these above mentioned challenges one by one in detail.
Environmental Challenges
Forces external to the organization that affect performance of organization and are largely beyond control of management refers as environmental challenges. Recently following are the six significant environmental challenges.
Read More: Importance of Human Resource Management
- Rapid Change
- Work Force Diversity
- Globalization
- Legislation
- Technology
- Evolving Work and Family Roles
- Skill Shortages and the Rise of Service Sector
- Rapid Change
A fickle environment is faced by many organizations in which change is nearly constant. They need to adapt the changes effectively and quickly if they are to prosper and survive. At the heart of an efficient response system, human resources are almost always lies.
- Work Force Diversity
A real opportunity and an important challenge are presented by all these trends. Business organizations that advantage on employee diversity are more likely to prosper and survive, that formulates and implements HR strategies.
- Globalization
How to compete foreign business organizations both abroad and domestically are the most dramatic challenges facing as they enter the twenty first century.
Various business organizations are still being forced to consider globally, something that doesn’t arise without difficulty to the business organizations long accustomed to performing business with expanding and large domestic market with least foreign competition.
Upwards layoffs in every year may be resulted as weak response to international competition. The ability of a business to compete head-to-head with foreign producers, this critical role can played by human resources.
- Legislation
Over the past three decades, most of the growth in HR function may be attributed to its important role in maintaining the business organization out of the trouble with law.
Most business organization is highly concerned with potential liability consequence from personnel decisions that may break laws by local governments and/or state legislatures.
In thousands of cases, these laws are constantly interpreted and brought before federal courts, government agencies, and state courts and at Supreme Court.
The ability of business organization to deal effectively with government regulations depends to a large extent on how successfully a business organization manages its human resources.
Functioning within the legal framework needs developing internal systems and maintain track of external legal environment to ensure compliance and minimize complaints.
Formal policies on sexual harassment are now developing by many business organizations and building internal administrative channels to deal with alleged incidents before employees consider the requirement to file a lawsuit.
- Technology
The quick technological changes as are currently happening in the telecommunication & computer industries, the world have never seen before this.
One estimate is that technological alteration is happening so quickly that individuals may have to alter their full skills three to four times in their career. Every area of business is affected by the advances being made including human resource management.
- Evolving Work and Family Roles
Every year, the proportion of dual-career families, in which both husband and wife work, is increasing.
Unfortunately, women confront the double burden of working on the job and at home, devoting 30 hours per week at home to the children and 42 hours per week working in office. On the other hand men spend 12 hours per week at home and 43 hours per week at office.
Family-friendly programs are introduced by more and more business organizations that provide them competitive advantage in labor market.
These programs are HR maneuver employed to engage and retain the best-qualified employees, female or male, and they are very likely to payoff.
- Skill shortages and the Rise of Service Sector
Widening of service-sector employment is connected to a number of components containing legal & regulatory changes, changes in consumer preferences and tastes, progress in technology & science that have extinguished various producing jobs and alteration in the manners businesses are managed & organized.
By 2000, half of all manufacturing & service jobs will be makeup of technical, managerial &service positions that need college degree.
Unfortunately many of the available will be not skilled to satisfy those jobs. Even now, it is complain by many business organizations that the provision of skilled labor is minimizing and they must give their employees the fundamental training to constitute for the deficiencies of public education system.
Currently business organizations are spending large amount year to rectify these shortcomings on a huge variety of training programs.
Organizational Challenges
Concerns those are internal to the business organization known as organizational challenges. Because no business organization functions in a vacuum, therefore, mostly they are a byproduct of environmental forces. These problems are the following
- Competitive Position
- Organizational Restructuring
- Outsourcing
- Decentralization
- Competitive Position
By keeping low costs and a strong cash flow is the one way for a business organization to get competitive advantage.
A compensation system that employs innovational reward plans to control labor costs can assist the business organization to grow. Employees’ behaviors that benefit the business organization are rewarded by a well-designed compensation system.
- Restructuring
A number of business organizations are changing the way the operations are done. For example, some business organizations are restructuring HR for reasons like financial considerations, time pressures and market pressures.
- Outsourcing Organizations
The process of transferring of responsibility to an external provider for an area of service and its goals refer as outsourcing.
To reduce transaction time is the major reason for this movement, but other benefits contain quality improvements and cost reductions. External sources mostly more cost-effectively done the administrative and repetitive tasks as found by business organizations.
- Decentralization
Most main decisions are implemented at lower levels and made at the top, in traditional organizational structure. It is common for these organizations to centralize main operations such as marketing, human resource and production in a single location that serves as the command center of organization.
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In order to execute orders issued at the top, multiple layers of management are usually used along with the control of lower ranks from above.
However, traditional top-down kind of organization is rapidly becoming obsolete because of the reasons that it is too inflexible to compete effectively and it is costly to operate.
Decentralization replaces this, which transfers decision making authority and responsibility from a central office to locations and people closer to the situation that desires attention.
Organizational flexibility is enhanced by HR strategies that play a crucial role by improving decision making processes within the organization.
Individual Challenges
At the individual level, human resource problems address concerns that are most to the point to decisions involving particular employees.
These problems almost always represent what is occurring in the larger organization. Organizational problems are also affected by how individuals are treated. Following are the most significant individual challenges.
- Productivity
- Empowerment
- Brain Drain
- Ethics & Social Responsibility
- Job Insecurity
- Matching People and Organizations Research
- Productivity
How much value individual employees give to the goods or services that are produced by the organization, the evaluation of this is productivity.
Higher the organization’s productivity when the output per individual is greater. Motivation and ability are two significant factors that affect individual productivity.
Hiring and placement process can improve employee ability that chooses the best individual for the job. It can also be enhanced through career development programs and training design to read them for further responsibilities and to sharpen employees’ skills.
Motivation refers to desire of a person to perform the effective possible job or to exercise full struggle to do assign tasks. Motivation directs, energizes and sustains human behavior.
- Empowerment
The employee dependence on superiors has reduced by many business organizations in current years, and more emphasis is placed on individual control over the work that requires to be performed.
Because the direction is transferred from an external source to an internal source, therefore, this process has been labeled empowerment.
The sum of empowerment is that workers are given the authority & skills to make decisions that would be made by managers traditionally.
- Brain Drain
Business organizations are becoming more susceptible to brain-drain with organizational success and more & more dependent on knowledge held by particular employees.
Brain-drain refers to loss of intellectual property those consequences when competitors hook away key employees. Innovation can be negatively affected by brain drain and cause the main delays in the introduction of new products.
- Ethics & Social Responsibility
Corporate social responsibility refer to the degree to which business organizations should and perform channel resources toward enhancing one or more portions of society other than the shareholders and owners of the business organizations.
Ethics is the fundamental of socially responsible behavior. Codes of ethics are developed by many business organizations that outline standards & principles of personal conduct for their members.
Unfortunately, these codes mostly do not fulfill expectations of employees of ethical employer behavior.
- Job Insecurity
Many employees fear for their jobs in this era of downsizing & restructuring. Even workers are laid off by profitable business organizations.
Layoffs have become necessary in the age of cutthroat competition; Business organizations argue that regardless of how well the organization is performing.
- Matching People & organizations Research
Matching people and organizations research proposes that HR strategies give to the most the performance of business organization when the business organization employ these strategies to appeal & retain the kind of employee who effectively fits the entire business goals and the culture of organization.
For example, one research highlights that the personality characteristics & competencies of top executives could improve or hamper the performance of the organization, depending on what the business strategies of organization are.
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