Challenges in strategic HRM

Employees are one of the key resources that add values to a company hence human resource management is very important. There are a few developments that will have profound effects on a company’s performance. Technological disruption has a huge impact on jobs (job creation and displacement), labor productivity and widening of skill gap. It is predicted that 65 % of kids who enter kindergarten today will do a job in an entirely new specialty that was not existed (World Economic Forum, 2016). Human resource management has become very challenging because of these megatrends.  Brief description of these megatrends given below, 

• Innovation 

According to the Deloitte Innovation survey 2015, a majority (96%) stated that innovation is one of their top 5 strategic priorities (Collate at el, 2016).  Companies like Apple Inc., Roche Pharmaceuticals and Tesla motors keep their competitive edge due to the cutting edge innovations.  HR departments have a very challenging task to develop their talents and to acquire new talents to support the innovation drive of the organization. There has to be a perfect blend of innovation strategies and HR strategies.

• 4^th Industrial Revolution (4IR)

4^th IR has a profound impact on Governments, business organizations and people. The job landscape has dramatically changed due to technological disruption. It is estimated that about 7.1 million jobs will be lost from 2015 to 2020 especially in white-collar office jobs. There will be new jobs (2 million) in the field of computational, Mathematical, Engineering, and Architectural fields. Some jobs, data analytics, and specialized sales representatives will be critically important to companies by 2020.  Smart and connected devices will generate a large volume of data, big data, in the coming years and the data analytics will help to use these data in a more meaningful way. Companies will need specialized sales representatives to market their products with technological features and to explore new customers (World Economic Forum, 2016).

Talent availability and the talent requirement will be different resulting in a talent gap and talent recruitment will be a challenging task. So the companies have to examine and taken these technological disruptions into account when formulating their HR strategy.

• Globalization

Globalization can be defined as a set of technologies (such as the internet, global fiber-optic network, inter-operable software applications) and political events (collapse of Berlin wall and USSR) converging to create an interconnected world. Globalization has opened up new avenues for companies to expand but it has led to intense competition among the players. Although the number of talented people increases, there is a high demand for these talented people from the developed world as well as from emerging economies. Talent shortage will be more dramatic in major economies like the US, EU, and Japan. In this context companies, HR strategy should be drafted carefully and implemented skillfully to concur the new markets.  

• Demographic transition 

Demographic transition carries many negative impacts on society. There will be more elderly people and lesser younger people in the future. Middle age people who currently work in an organization will start to retire in the next 10 to 15 years’ time, leading to the loss of experienced people. On the other hand, there will be a shortage of capable young people to hire. A wide range of strategies such as flexible working hours, lifelong learning and other welfare facilities can be offered to counter the negative effect of talent shortage  (Mendryk at el, 2013).

References 

1. Collate B., Diricks C., Brucher L., and at el, 2016. The Deloitte Innovation Survey 2015. [Online] 

Available at: https://www2.deloitte.com/content/dam/Deloitte/lu/Documents/about-deloitte/lu-en-innovations-survey-25032015.pdf

[Accessed 7 April 2019].

2. Mendryk I., Dylon D., 2013. Demographic changes as a challenge to the human Resource Management. Croatia, s.n.

3. World Economic Forum, 2016. Executive Summary: The future of jobs. [Online]
Available at: http://www3.weforum.org/docs/WEF_FOJ_Executive_Summary_Jobs.pdf
[Accessed 7 April 2019].