Competitive challenges to hrm

Competitive challenges
to HRM

Technological Changes
Workforce Diversity

Challenges faced by Human Resource
Managers

There may be various challenges that a human resource manager might face:

1. Technological changes

2. Workforce diversity

3. Change management

4. Outsourcing

5. Health and welfare

6. Recruitment and availability of skilled labour

7. Retention and succession planning

8. Restructuring

9. Industrial relations

10.Employee compensation and rewards

11.Retirement

Technological changes : challenge to
HRM

Introduction

Traditionally human resource management (HRM) has had a people-oriented approach.
However today, when the competitive demands of the marketplace require a reorientation
of strategic human resource philosophies and practices, an emphasis are being given to a
knowledge-based administration using technology as a tool.

Today’s human resources (HR) tasks cover an ample variety of activities requiring very
different skill sets, “from compensation and benefit administration (highly quantitative)
to employee relations (highly qualitative)”

Traditional Vs. Contemporary

 Technology requires a person to have fewer skills to operate than manual work.
Skilled workers accept to work as less skilled worker or they leave. Or they are
replaced by cheaper labour with fewer skills. This is called Deskilling – changing
the work using technology that requires fewer skills. However, technology has
helped remove some boring and dangerous jobs.
 Technology makes existing workers more efficient. Checkout operators operate
faster, accurately and hence fewer workers are required. Increasingly efficient
production – minimum wastage, damage & errors and improved & consistent
quality. Selection test must be revised to match the requirements of the new job.
Teamwork, communication and multi-skills are essential.
 Job description needs to be changed to describe the new jobs, tasks and
responsibilities. Reduced employment in areas where technology has been
introduced. Creation of new jobs where Technology has been introduced. Many
workers have become deskilled. As a result: type of employees, skills, training and
induction will need to be modified from the old system to fit the new.
 Today workers need multi-skills for different jobs and they are likely to change
their jobs a few times. New technology requires new knowledge, skills, perception
and behaviours. Formal training must be provided to existing employees. Effective
and efficient training must be provided for the new technology. So T&D with
performance appraisal and reward system that reinforce those behaviors are
required.
 As previously mentioned, today workers need multi-skills for different jobs and
they are likely to change their jobs a few times. Multi-skilling refers to expanding
the skill level of an individual. As a result the individual can perform a wide range
of tasks. It opens up wider career options. It prepares the organizations for future
needs.
 Induction has become more important. It enables the worker to understand the job
requirements and fit well into the technological culture. Redundancies are
becoming common partly due to new technology. Retrenchment packages must be
updated and other services made available – like counselling. Some jobs
disappeared (we no longer need Typists) (watchmaker – not needed due to digital
watches).

To be considered successful HR technology must achieve several goals, as described:
(a) Strategic alignment, which must support the goals of a business by helping users.

(b) Business intelligence, which should inspire new insights and learning, by providing
users with relevant information and data, and by answering questions.

(c) “efficiency and effectiveness, which must change the work performed by HR
personnel, by dramatically improving their level of service, allowing more time for work
of higher value, and reducing their costs”

Holistic model of human resource management practices

The HR technology can help organizations meet their business goals and objectives today
and in the future by:

 “Helping managers deploy their workers more efficiently.
 Ensuring that workers receive proper training and development.
 Offering new insights on how to increase productivity.
 Enabling employees and managers to receive needed information faster.
 Reducing HR administrative costs.
 Assisting with better employee assessment and selection”
recent studies of HR management and business performances have found that HR’s
adopted “high involvement” practices have resulted in “significantly positively
associated” “improvement on market value, rate of return on capital employed, revenue
growth, revenue-per-employee rate, productivity, product/service quality, and even
organizational survival”

The use of technology by HR has proven to assist on the improvement of business
performances. However, it was explained that, although we expect all businesses to have

embraced this “high involvement” on technology, “only about one of every eight
business has done so”.

Probably a solution for this lack of “high involvement” on technology is for businesses to
adopt an HR philosophy which understands that today’s customers and clients are used to
a technological experience

It is the fundamental on the strategy for HRM improvement

Technology is the practical application of science to commerce or industry; “the study of
or a collection of techniques; a particular technological concept; the body of tools and
other implements produced by a given society”.

Technology is here and will continue to progress. To understand the role technology
plays on today’s HRM we first have to understand business technology:

• “Business technology refers to the integration of computer and communications
technologies in support of administrative applications and procedures within an
organization.
• Business technology is constantly evolving.
• Business technology is required for a successful business”.
It is no longer enough for HRM to maintain a narrow operational focus, view its activities
as restricted to the limits of its own organization, or to limit itself to traditional human
resource (HR) responsibilities, HRs should go above and beyond.

The HR field has evolved over time and nowadays HR is under more scrutiny and is
more accountable than ever. There is little room for mistakes, which can be
overwhelming costly. HRs these days and in the near future have a greater importance in
the strategic business partnership with the organization, and for this challenge to be won
there is an increasing need for technology to be inserted on its daily operations and on its
decision-making considerations.

The Impact of Technology in Human Resource Management
Prior to the Industrial Revolution most people worked either close to or in their homes.
However, mass production technologies changed this and people began to travel to work
locations or factories”. Today, with increased computer technology, there is a move for
many to work from anywhere; people are no longer necessarily anchored to one place.
Computer technology, especially the Internet, changed that.

The trends in technology which directly or indirectly have an impact in HRM are:

 Growth in knowledge needs: “World trade is growing over three times faster in
knowledge-intensive goods and services such as biomedicine, robotics, and
engineering”.
 Shift in human competencies: “Some predict that in 2015 almost all net
employment growth will be in knowledge workers”.
 Global market connection: “Technology is dissolving borders and creating an
interconnected marketplace”.
 Business streamlining: “Easy to use communication, electronic mail, electronic
conferencing, and databases are creating instantaneous dissemination of data to
make better decisions to geographically dispersed workers”.
 Rapid response: “Technology permits quicker communications, which allows
faster decision-making”.
 Quicker innovation: “Teams of marketing, engineering, and production personnel
working in parallel with computer provided files, data, and information develop
products faster”.
 Quality improvement: “The concept of building quality into the entire process of
making, marketing, and servicing is enhanced by computer monitoring systems
and through robotics”

Current Techno-Challenges

1. Artificial Intelligence: Artificial intelligence will definitely give a number of
workers access to expert systems - computerized programs that capture the
knowledge & decision making approaches to experts. As the capabilities of
artificial intelligence give people and machines greater problem-solving powers,
jobs and skills they require with change dramatically, affecting the employment,
training, and development, compensation, and employee relations activities of the
HR department.

2. Office Automation: Automation is another way in which technology affects the
field of HR management. The introduction of computers into banks changed
employment needs. HR departments of banks had dramatically changed their
recruiting & training programs. Before computers, HR specialists recruited large
numbers of unskilled and semiskilled clerks. Computers, however, required highly
skilled programmers & systems analysts.

3. Advanced Transportation: The technology of cars and airplanes modified the
transportation industry. Automobile and aviation companies grew, creating a
demand for more employees and training. For those already employed by these
firms, growth provided promotional opportunities. Railroad companies were also
affected, except that the HR management challenges differed. Revenue lost to cars,

trucks, and airplanes limited growth. HR departments in these companies had to
reduce the work force and create early retirement systems.

Human Resource Information Systems (HRIS)
An HRIS serves two major purposes in organizations:

(1) Improves the efficiency with which data on employees and HR activities are
compiled

(2) Having accessible data enables HR planning and managerial decisions making to be
based to a greater degree on information rather than relying on managerial perceptions or
intuitions.

An HRIS has many benefits for an organization; one of the most frequently used is the
automation of payroll and benefit activities.

The Internet Economy and HR
The widespread adoption of the Internet by business and people there is a greater use of
electronic business (e-business) processes. E-business includes several forms of buying
and selling products and services, such as:

 Business-to-consumer transactions. Per example: purchasing books and tickets,
and conducting services including banking online.
 Business-to-business transactions. This is when there are transactions between
manufactures and wholesalers, and between wholesalers and retailers.
 Consumer-to-consumer transactions. An example would be the website ebay.com.

“E-business relies on the Internet to obtain product information online, directly order
products and services, receive after-sale technical support, and view the status of orders
and deliveries”. E-businesses create many challenges for HRM departments because of
the fast pace of changes on information technology. HRMs are required to continually
update their skills requirements and then recruit and train people to meet these
requirements.

Competitive challenges to hrm

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Competitive challenges to hrm