HR Connect with Upali Rathnayake

           The impact of Globalization on HRM

What is Globalization?

 Globalization refers to the acceleration of human movements and exchanges of products and services, capital, technologies, and cultural practices around the world - Edwards, (1995)

 Examples.

·         People - Talent mobility.

·         Goods and Services- Online purchase platforms (Alibaba, Daraz ect).

·         Technology- Online lecturers, social media platforms, ERP systems.

·         Culture - Accept cultural differences (use other countries’ habits, greetings, dresses ect)

            

   Types of Globalization

                  1.  Economic globalization

                   2.  Financial globalization

                   3.  Cultural globalization

                   4.  Political globalization

                   5.  Sociological globalization

                   6.  Technological globalization

                   7.  Geographic globalization

                   8.  Ecological globalization

Multinational Companies (MNCs)

with the impact of globalization, the majority of companies try to grow and expand their businesses in the global context. with that it can grow a global customer base and increase its market share abroad, it may believe that opening offices in foreign countries is worth the expense and effort.

What is Multinational Company (MNC)

 A multinational corporation/company (MNC) has operations and resources in at least one country other than its home country. This means, a multinational corporation typically has offices and/or factories in multiple countries, as well as a centralized headquarters from which worldwide management is controlled.

Below mentions world recognized MNCs.

Globalization entails extending the role of commerce, FDI, and other types of cross-border interaction in national economies; hence, for most societies, globalization is one of the factors determining what type of production is created in a given country. Global entities such as the World Bank and the Organisation for Economic Cooperation and Development produce reports on the development of the global multinational network on a regular basis using a comprehensive database that provides a reliable standard for analyzing current globalization issues. In order to measure the effects of globalization on growth, it is required to first examine the Konjunkturforschungsstelle (KOF) Index of Globalisation, which was developed by the KOF Swiss Economic Institute, ETH Zurich, to assess current economic conditions, economic constraints, and data on information flows that is, evaluating globalization's economic, social, and political dimensions.

Source: Top ten countries on the Konjunkturforschungsstelle (KOF) globalization index, 2020

 

Type of Employees in MNCs

1.       Parent Country Nationals (PCNs) - Employees from the country where the organization's headquarters is located. 

2.        Host country nationals (HCNs) - Employees from the country in which the subsidiary is based.

3.       Third country nationals (TCNs) - Employees who are working in a different country.

              

Source: International Human Resource Management by Peter. J , Dowling ,Marion Festing and Allen D. Engle, Sri.

 

What is International Human Resource Management (IHRM)?

International HRM refers to all of the HR practices involved in managing a worldwide workforce. Within a multinational firm, international HR professionals are responsible for the following:

§  Recruitment and talent management
§  Repatriation and emigration
§  Compensation

§  Training and development

 

To be clear, a multinational firm (MNC) is one that has a presence in multiple nations. The business is often managed from the 'parent' or home country in which it is headquartered, although it operates from a variety of worldwide locations. Apple, Amazon, and Unilever are well-known multi-national corporations, but smaller businesses can qualify as MNCs if they have subsidiaries in two or more countries.

MNCs with globally dispersed employees require International HRM experts to deal with the unique requirements and considerations around recruiting, onboarding, and retention.

Why IHRM?

expanding globalization, businesses and employees move across the globe. HRM blunders have caused major problems in multinational operations. As a result, understanding HRM from an international perspective is required.

The Impact of Globalization on IHRM

·         Recruitment and Talent Acquisition -  As globalization has increased, businesses can now hire employees from all over the world. The competition for talent has intensified, making it increasingly challenging for businesses to attract and retain elite personnel. To reach a worldwide pool of candidates, HR organizations must change their recruitment techniques.

·         Diversity and Inclusion - As a result of globalization, people from all cultures and origins have come together, resulting in a more diverse and multicultural workforce. HR departments must develop policies and programmes that encourage diversity and inclusion and assist workers from diverse backgrounds in working well together.

·         Training and Development - When dealing with employees from various countries and cultures, HR departments must provide training and development programmes that are suited to each employee's specific needs. This

·         Compensation and benefits - Because employees operate in different parts of the world, HR teams must ensure that compensation and benefits packages are competitive and match the demands of employees in various nations.

·         regulatory and Legal challenges - As a result of globalisation, HR teams must manage complex legal and regulatory challenges. These include immigration, employment law, and data privacy concerns.

 

Advantages and Disadvantages of IHRM

Conclusion

Globalization has made human resources more complex and difficult, but it has also offered new opportunities for businesses to attract and retain top people from around the world. HR departments must be agile, creative, and strategic in their approach to succeed in this globalized economy.

Also, Globalization is bringing advantages specially for developing countries since they can approach the international market by using the benefit of Globalization.

 

References:

KOF Swiss Economic Institute KOF Globalisation Index. Available online: 

https://kof.ethz.ch/en/forecasts-and-indicators/indicators/kof-globalisation-index.html (accessed on 19th April 2023).

 https://www.youtube.com/watch?v=r1WzcxtEUps (accessed on 19th April 2023)

What is international human resource management? (2022) Global Online Courses at Manchester Metropolitan University.Availableat:https://globalonline.mmu.ac.uk/news-and-events/what-is-international-human-resource-management What_are_the_main_challenges_of_International_HRM  [Accessed  19 April 2023)

International Human Resource Management (no date) International Human Resource Management - an overview|ScienceDirectTopics.Availableat: http://epgp.inflibnet.ac.in/epgpdata/uploads/epgp_content/S001610/P001766/M023779/ET/1507188550Module01Text.pd [Accessed on 19 April 2023]