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Pros & Cons of Globalization on Human Resource Management

by Linda Ray, studioD

As globalization continues to expand, the functions within transnational companies all are impacted. Employees fear being replaced by a cheaper workforce overseas and executives are required to learn the various cultural differences and regulatory environments in which they operate. But none of the departments are affected as much as human resources that must manage the workforce at home and abroad. Technology is available that can help HR professionals manage the processes involved in globalization, but there are downsides for the managers who must deal with languages, time differences and employment rules around the world.

Job Functions Redefined

One of the positive aspects of globalization on human resources is redefining the role of the HR professional within multinational organizations. Instead of managing the minutia involved with the administration of employee benefits and payroll, which is increasingly being outsourced, HR professionals play a larger role in the company by being involved with strategic planning and developing programs to train and improve the workforce, according to the Science Journal of Management.

Recruitment Potential Grows Substantially

Human resource professionals are no longer bound by the physical boundaries of their local area when their company moves into the global playing field. As a result, HR’s recruitment efforts become easier and more diverse. They have a wider pool of talent from which to draw. The larger employee pool is especially notable in the higher-skilled categories where there often is a gap between supply and demand. Businesses may thrive with competitive products and services, but cannot survive globally without the right mix of talented employees.

Essential Technology Changes Occur

For companies that retain benefits, compensation, payroll deductions, employee training and performance evaluations in-house, HR professionals increasingly are tasked with operating new computer systems required to manage a global workforce. Hundreds of vendors can provide global companies with the appropriate software programs to deal with the numerous HR tasks, but someone still has to operate the systems. Human resource professionals have to expend considerable time and effort to learn new platforms when their companies rely on the latest software to manage a worldwide workforce.

Challenging Cultural Differences

One of the most challenging aspects of globalization on human resource professionals is the need to discover and learn the cultural differences at play with their new global workforce. They need to learn how best to communicate company goals and missions, integrate diverse value systems into their companies and coordinate the activities of all their employees to achieve their goals. HR in the home office must build working relationships with frontline managers to communicate company policies, ensure new hires understand the parameters of their employment and translate company directives for workers. They need to develop an understanding of the living conditions and training processes in other countries and follow foreign employment regulations, labor relations laws and organized labor issues, as well as figure out how to create effective performance appraisals from afar. More than ever, human resources must rely on the supervisors on the ground to communicate vital HR information, rather than relying on their own training and abilities.

About the Author

Linda Ray is an award-winning journalist with more than 20 years reporting experience. She's covered business for newspapers and magazines, including the "Greenville News," "Success Magazine" and "American City Business Journals." Ray holds a journalism degree and teaches writing, career development and an FDIC course called "Money Smart."

Photo Credits

  • Martin Barraud/OJO Images/Getty Images