Human Resource Management Challenges across Countries - Essay Example

Human Resource Management Challenges across countries Introduction International human resource management (IHRM) involves the management of human resources on world wide scale. It enables the firm to be successful world wide (Gary, 2006). This means that the IHRM has to enable the company to be competitive globally, to be responsive locally, to be efficient, to be flexible and adaptable to new environment in the shortest period of time as possible and to be able to transfer knowledge to all its units across the globe. Thus the success and effectiveness of a firm’s IHRM determines the survival or extinction of an organization. The HRM faces a challenging environment due to changes occurring rapidly in many fields that affect HRM. Some of the major HRM challenges include economic and technological change, availability and quality of workforce, demographics and diversity issues and organizational restructuring. In this paper we explore HRM challenges that are likely to be faced by ABC supermarket as it expands into China, US and the UK. We aim to compare the challenges facing HRM in China to those found in the US and the UK. First we present the three major challenges that ABC is likely to face as it expands into China. We then compare these HRM challenges to those found in the US and the UK. Finally we make a conclusion and recommendations based on these analyses. Main HRM challenges faced in China One of the major HRM challenges facing China is the availability and quality of workforce. Studies in China have revealed that many multinational companies face a severe and growing shortage in talent. Qualified labour is considered a premium in China. The demand for Chinese labour has outweighed its supply under the booming economy. It is difficult to get young, upwardly mobile professionals who have advanced skills and better understanding of the international business (Gary, 2006). Education in China focuses on skills such as reading writing, reading and arithmetic which are not vital for success in the business world. Cultivation of essential skills such as risk taking, teamwork, leadership is not emphasized in Chinese education (Gamble, 2007). Thus ABC supermarket planning to enter the Chinese market will have to compete with other companies both local and multinational for employees with essential skills required for mass market. In addition most top graduates prefer working for local companies which offer job security hence ABC supermarket will need to strategize well on how to attract the top graduates to work for it (Wu, 2008). The company will be competing for employees to occupy marketing and sales position that will be required for the company to be successful (McGraw & Harley, 2003). Research has indicated that most Chinese lack English language skills and other skills such as managerial and communication capabilities. These skills are essential in the daily running of supermarket business and therefore ABC supermarket will have to find ways of dealing with shortage of workforce in order to establish itself in China (Gamble, 2006). Retention of the employees in China is another hard task faced by the employers (Gamble, 2007). The fact that there is a tight labour market offering various opportunities to employees, many employees are not loyal to the employers who do not offer them the opportunities they require. Employees in China are mainly dissatisfied by companies which do not offer good compensation and benefit packages (Gary, 2006). Companies which offer poor pay in China lose their employees. Other factors contributing to migration of employees from companies include inability or lack of career opportunities, training and development. Thus for ABC supermarket to be able to retain those employees that it will be able to recruit, it will have to strategize on how to offer competitive compensation and benefit packages to retain the high quality labour force that can drive it to success (Wu, 2008). Cultural differences also present new entrants in China with a challenge. The actions of such entrants may produce results that are against his or her expectation (Gamble, 2007). The Chinese society emphasizes the saving of face. Thus feedback on performance should be more oblique than what happens in Australia or other western countries. Employers in china are visualized as family members rather than employers (Wu, 2008). Employees in china expect their employers to provide for their social welfare. Furthermore, the strong cultural bias of Chinese does not nurture them to sell their attributes during interviews since it goes against their culture which does not allow boasting. Thus ABC supermarket which has developed in Australia where employee empowerment is emphasized may find itself alienated in china where business culture is rule driven. Therefore, the management of ABC will need to strategize on how they can incorporate the cultural backgrounds of the Chinese while selecting and nurturing their employees (McGraw & Harley, 2003). Differences between HRM challenges faced in China and those in the US and the UK Unlike the United States of America where employers recruit entry level management talent via universities and colleges, in china this is still a challenge. This because in old labour allocation system where college placement were unnecessary. In addition, unlike the US where there are many employment agencies, china has limited number of agencies which are trying to replace the old job allocation offices (Gary, 2006). The few existing agencies focus mainly on placement of senior managers instead of entry or lower level employees. Therefore ABC will face a problem of recruiting entry level employees as it strives to establish itself in China. However, this will not be a problem in ABC’s efforts to establish itself in the US. In addition, the availability of quality labour market in the US is good unlike china (McGraw & Harley, 2003). In America the three main HR challenges are leadership development, recruitment and availability of skilled local labour and change management. Any company intending to move forward in the US needs strong leadership personnel (Wu, 2008). Due to early retirement seen in US and the aging of workforce companies are expected to train and develop leaders for future. Thus ABC will have to invest much of its resources in developing and training of leaders to drive the supermarket to success and also assure its future continuity in case its top management goes for early retirement. This will ensure that succession of goes on smoothly (Gamble, 2007). Most of the skilled and qualified personnel in the US are aging. This presents challenges in the recruitment and availability of local skilled labour. Unlike China where lack of skilled labour is due to poor educational curriculum and not demographic problems, in the US lack of the skilled labour is due to lack of young age groups to replace the aging population. Change management issues in America arise from the consolidation and merging of markets within an industry (McGraw & Harley, 2003). There are also cases of collective bargaining and early retirement which presents change management challenges to the companies. ABC supermarkets will also have to deal with the issue of change management in the US by strategizing on how to deal with consolidation and the merging of markets, in addition to issues related to collective bargaining and early retirements (Gamble, 2006). In the UK there are persistent skill shortages, workforce demographic is changing, there is increasing diversity and the priority given to work is growing (Gary, 2006). Thus there is intense competition for individuals who are capable of making greater difference in the performance of an organization. Unlike China where entry level employees are in short supply, in the UK finding individuals with necessary leadership skills and capability is a bit hard and therefore ABC supermarket will have to content with the stiff competition for labour force to occupy its top management jobs (McGraw & Harley, 2003). Due to the shortages in the talented personnel in the UK, ABC management will need to develop its own talents from those entry employees that it will recruit. In addition, the company may be forced to recruit some of its top managers from Australia to initiate talent development in the UK prior to handing over of the management roles to the natives of UK (Gamble, 2009). Like other European countries, UK faces challenges in change management. This is because there are rapid technological changes in Europe and thus employers who want to embrace new technologies will have to deal with change management problems (Gamble, 2006). Companies are involved in continuous training of employees to adopt the new technologies. Thus unlike China where emphasis is own career development, employees in UK and other European countries are interested in job training make them remain relevant in the company (Gary, 2006). Companies which offer less training are unlikely to survive the ever changing technologies that are used in business (Gamble, 2009). Employees are likely to shy away from such firms since there is little if any job security since most are likely to be laid off in case of change management instead of being trained to take up new roles in the company that has adopted new technologies of running or doing business. Therefore ABC will have to deal with this issue of change management and strategize on how it will be addressing it in future as it adopts new ways of doing business (Wu, 2008). Another challenge that is prevalent in UK is compensation. Like China employees in UK are interested in compensation and benefit packages that are attractive. However, the UK does not have pronounced problems related to retention of employees as witnessed in China where employees are not loyal to their organizations (Wu, 2008). Thus ABC will have to present attractive compensation and benefit packages to employees in order to attract and retain top talented employees (Gamble, 2006). Conclusion From the above discussion, it is clear that all the three target markets for ABC supermarkets face a challenge of availability and quality of workforce. However, the causes of these challenges in China differ from those in UK and the US. The shortages in China are mainly caused by lack of effective education curriculum while in the US and to some extend in the UK the shortages are being g caused by the rapid aging of personnel with little young people available to replace them. Thus in the US and the UK the problem is largely caused by limited number young age groups while in China the problem arises from inefficient education systems. Another HRM issue that we have noted is the challenge of change management in the US and the UK. Due to rapid changes in technology companies operating in these countries face problems related to change management. Firms which are able to offer job training that will ensure the security of the employees’ jobs are able to attract top talents. However, for the china attraction and retention of employees is mainly dependent on the compensation and benefit packages. Even though these two factors are also seen to play a role in the case of US and the UK, they are not the major determinant of employee retention as witnessed in China. Cultural beliefs are also seen to be a major challenge in China unlike UK and the US. Thus ABC will have to strategize on how to address these issues as it plans to enter these new markets. References Gamble, J. 2009. One Store, Two Employment Systems: Core, Periphery and Flexibility in China's Retail Sector. British Journal of Industrial Relations, 47(1), pp. 1-26 Gamble, J. 2007. The rhetoric of the consumer and customer control in China. Work, Employment & Society, 21(1), pp. 7-25 Gamble, J. 2006. Multinational retailers in China: prolifering ‘McJobs’ or Developing Skills. Journal of Management Studies, 43(7), pp. 1463-1490. Gary, D. 2006. Expanding into China? What foreign employers should know about human resource management in China today? Available at http://goliath.ecnext.com/coms2/gi_0199-6220924/Expanding-into-China-What-foreign.html McGraw, P. & Harley, B. 2003. Industrial Relations and human resource management practices in Australian and overseas-owned workplaces: global or local? The Journal of Industrial Relations, 45(1), pp. 1-22 Wu, J. (2008). An Analysis of Business Challenges Faced by Foreign Multinationals Operating the Chinese Market. International Journal of Business and Management, 3(12), pp. Read More