Today’s HRM Challenges

 

Containing Costs

 

A company's HR department, like every other division, must demonstrate the value and contribution it makes to the broader business plan. HR departments should demonstrate the value they provide to the organization by aligning with business goals as corporations scramble to slash expenses. And being able to provide value, one must first understand the problems that organizations face and then devise solutions to minimize the harm these problems cause. Most entrepreneurs, if polled, would say that controlling costs is the most difficult problem they face, and it's easy to see why. When the economy isn't performing well, many firms are more prone to cut back on their human resources. Benefits, recruiting process fees, and a slew of other charges are all part of a company's human resources budget.

 

Benefits

 

These expenses eat away at any company's profit margin. Benefits must be supplied in such a way that they don't detract from the company's ability to retain and motivate employees. A firm can save money by not providing advantages or 401(k) schemes, but if it wants to recruit the best employees, it will not be able to do so with a hiring package that excludes these perks. As a result, keeping expenditures under control is a delicate juggling act. HR managers must do everything they can to keep and recruit new personnel, but they must also be careful not to overdo it, lest they put the company's finances at risk.

 

Hiring and Turnover

 

The price of employing and letting people go is another factor to think about. An organization's hiring procedure and employee turnover may be quite costly. In the context of a corporation, turnover is the rate of workers who depart in a certain period of time. HR may directly contribute to the company's current strategy by designing a recruitment and selection process that is cost-conscious. As much as $9,777 might be the cost of recruiting a new employee or replacing an old one (turnover) for a $60,000-a-year job (James Del Monte, "Cost of Hiring and Turnover," JDA Technical Solutions, Inc., 2010, Retrieved September 1, 2010). With the right recruiting strategy, HR managers can keep expenses down for their company.

 

Offshoring

 

Outsourcing has been a cost-cutting tactic for American companies. Jobs are relocated to lower-cost countries via the offshoring process. International Horizons, the special edition of the McKinsey Review, 2013, estimates that  5.7 Million employment will be outsourced by 2015 (Vivek Agarwal and Diane Farrell, "Who Wins in Offshore outsourcing?" There are a lot of occupations in Information Technology (IT) and manufacture, by us Latest Census. With regards to training new employees and dismissing off employees, HRM typically has the obligation for these tasks. It's not just the responsibility of HR and managers to keep expenses down, but as firms seek methods to save money, HR can undoubtedly help.

Technology

 

HR will continue to be affected by technological innovation as it is created (Browning, 2006). The advent of technology has allowed many organizations to create virtual workforces that can operate from almost any location in the globe. When employees aren't right down the hall, HRM takes on a new level of complexity. For example, technological advancements need an even greater emphasis on cultural sensitivity. Cultural awareness and comprehension are the only method to ensure that the use of technologies leads to enhanced production rather than lost output due to communication issues.

 

A more mobile workforce is also being shaped by technology. Many employees are able to demand and even require a lot of flexibility to fulfil their own personal and family demands because they can work from any place (Brown, 2004). Every manager has their own concerns about productivity and justice when it comes to flexible schedules, and these two issues are not mutually exclusive. It's becoming more common for corporations to go one step further and create virtual organisations, that do not have a physical presence and allow all workers to work from the office or anywhere they like (cost containment). As they can expect, this raises questions about the efficiency of the business and the flow of information among its members.

 

References

 

Brown, K. (2004). Human resource management in the public sector. Public Management

Review, 6, 303-309. doi:10.1080/1471903042000256501

 

Browning, V. (2006). The relationship between HRM practices and service behaviour in South African service organizations. International Journal of Human Resource Management, 17, 1321-1338. doi:10.1080/09585190600756863