Aligning Four Forces That Shape HR Strategy

In my previous article, I have cited four forces that have critical effect on shaping HR strategies were; 

(http://humancapitalstrategy.blogspot.com/2009/12/four-forces-that-shape-hr-strategy.html)

1. Globalization
2. Technological Innovation
3. Managing Talent
4. Demographics Management

Today, I would like to discuss about how do these global challenges effecting HR ,and what possible actions can it be taken in order to minimize the distorting effects.

1- Globalization

We are living in a globalized environment, where market place became one. Labor market has no exception. International HR Management gained importance and has significant impact on sustainable competitiveness of the Organizations.

New labor market era forces us to have a global look for workforce deployment and planning. Finding the people at the right time, placing in the right place/location to the right job have become a priority for HR function.

On the other hand, although companies have long had international operations, they have only begun in the past decade to view globalization as a critical business challenge. "The real power will be in the recognition that we are one piece of the global market for talent and for products and services" says Jacqueline McCook, former strategy and marketing executive of PepsiCo.

For better management of globalization; HR should focus more on thinking globally rather than locally. Some key actions to be followed may be summarized as:

• Moving from local HR Management to International HR Management.
• Designing international compensation and benefits schemes in order to ease the global deployment of people.
• Increasing the capabilities of the management team for managing more international teams, and for managing cultural diversity.
• Providing opportunities and systems for short-term assignments, international rotations in order to gain international experience.
• Investing in local management development
• Establishment of global HR platforms

2- Technological Innovation

In a global world where cost efficiency is one of the key drivers of the long-term growth, rapid adaptation to technology advancements will bring the competitive advantage to the Organizations.

The world is re-defined as the "mobile globe". Internet is everywhere. Today, there are 1.8 billion internet users in the world, representing 25% of the total population.                        

Each and every day, a new social network site is going online.

HR people should be able to take the "mobile competitive advantage" and use it in a very efficient way that the applications add significant value to the company brand. In this regards, HRIS (HR Information Systems) plays a key role.

In today's HR function expense budgets, a significant portion must be allocated to IT investments, maintenance and update of softwares. In order to have reliable, on-time data people softwares must be used. These are valid for all HR systems: career management, performance management, compensation and benefits, expatriate management, relocation management, reporting, workforce planning, administrative issues... 

All must go digital; a way to the "digital HR". 

It is crucial to have a presence in the internet. HR should design a user friendly recruitment and HR site, where job seekers and new graduates can have an understanding of the systems applied in the Organization. Social networks such as; facebook, linkedin, xing, twitter must be used, for job ads, company information.... 

As I said, people are online more than ever, and the internet is a valuable source for gaining a sustainable competitive advantage over competitors if efficiently used.

3- Managing Talent

Talent Management addresses the challenges of recruiting, developing and retaining highly capable employees and providing them with opportunities to perform and to advance. 

It's scope, is either within and outside of the Organization. Managing talent is the "management of potential new employees and high performing/highly capable existing employees in systematic way".

In a study of BCG, in all of the focus countries and across all industries, managing talent is viewed as a critical HR topic. (How to Address HR Challenges Through 2015)

In order for HR to be successful in talent management function, followings must be considered:

• top management and line management support is the key,
• employer branding is an issue to address in order to attract new graduates from reputable universities,
• setting a transparent talent management system; explaining the selection criteria, what will be the next moves, what are the development applications to be used...
• engagement, morale and awareness; a system which will enhance employee engagement and motivation to increase the employee performance and to push employees' self potentials up to maximum.

4- Demographics Management

The global world is aging, so does business world. There are fewer qualified employees entering into the workforce market.

Aging is critical to the long-term success of the Organization as it means, "experience/knowledge loss" which are expensive to replace.

How HR can be proactive on this matter?

• Assessment of the workforce; how will it change in 5-10-15 years; breaking down into ages, gender, job groups, management levels. 
• Nationwide demographics should also be followed in order to attract the top management's attention into the topic.
• Internal training/job rotations in order to enhance cross-job qualifications to prepare people to work in job groups other than their own.
• Offering employment options to retired employees in order to hold in delay the knowledge losses.
• If the latter is not applicable, offering coaching options to senior retired employees in order to transfer their experiences to their replacements.