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Challenges in Effective Human Resource Management

Updated on September 5, 2014
C.V.Rajan profile image

C.V.Rajan is a retired Engineer. Backed by 3 decades of industrial experience, he writes on several aspects of business, management and HR.

From simple "Personnel and Administration", organizations have over the years evolved into "Human Resource Development" (HRD) in managing people in the organization. The holistic principle behind this evolution is that people in the organization, even at the lower rungs of the order, are not to be treated as mere numbers, but as human assets, to be nurtured, valued and taken due care of. How far HRD managers are going to live up to this ideal in the coming future? This question itself is going to be the greatest challenge posed before them.

Like every aspect in day to day human life, the most important aspect that is greatly influencing the HRD function is - globalization. The second aspect that forces HRD functions to be constantly evolving is Information Technology and the third is the rapidly changing business conditions and economy.



Business Process Out-sourcing (BPO) is a major business activity that triggers widespread globalization. Countries like India and China are increasingly deploying large numbers of personnel who have to work at night shifts to support and serve customers of totally different linguistic and cultural backgrounds across half the globe.

Developing oral communication skills including specific accents of the language and providing quick and prompt response with courtesy are the skills that HRD managers have to continuously train up their staff with. The physical and mental stress associated with working at night shifts, need for being continuously alert and vigilant, lack of adequate scope for relaxation, and the tension associated with transport and security (particularly for the women) are some of the major concerns of the employees that have started to give sleepless nights to the HRD managers. Attrition level is the highest in these jobs and employees are increasingly realizing that the jobs do not give long term growth prospects.

This is one area where HRD managers are still groping in search of best possible ways of tackling the issues. The current strategy is to offer a disproportionately high salary in comparison with other day jobs needing similar qualifications. Yet another strategy is to recruit people at less-than-necessary educational qualification, but provide them with excellent training to meet the standards of the job. However, retaining the creamy layer in the long run and still maintaining quality of service is very difficult.

At higher echelons of management, globalization causes top executives to travel and settle at countries of totally different cultural backgrounds and manage their show successfully in new environments. Ego clashes, veiled racial and cultural resistance to accept outside leadership, problems and limitations faced in socializing outside the office are the issues faced by this category of people. HRD managers have to play a vital role in providing necessary training and exposure to these executives more from the cultural, and sociological points of view. Consultants may play a vital role in these issues.

On the other hand, in USA, the greatest challenge faced by HRD managers is the balancing act they have to do in deploying "sons of the soil" versus immigrant populace. Immigrant population, particularly from India, Korea, China etc are available fully qualified to meet the job requirements at far cheaper salary levels and are willing to work harder and smarter than the local population. US Government policy is also increasingly tilting towards ensuring large scale an effective employment for local population, which means that ruthless cost cutting by deploying immigrant manpower is getting increasingly tougher.

Further, getting jobs out-sourced from counties of cheaper labor is also under scrutiny, because of US Government's disinclination to offer tax concessions to outsourcing activities, which is a clear policy reversal from the past.



Developments in Technology, historically, is perceived to be a threat to job security for people at lower rungs in the organization. Productive redeployment of personnel after giving appropriate training in new skills and responsibilities can only be done to some extent and HRD managers many times will not be fully able to take the technology bull by their horns. Take for example, developments in digital photo technology, which has virtually bulldozed the conventional film photo technology. HRD function perhaps can train up and redeploy people, who were assembling analog cameras, to assemble digital cameras. But what can anyone do about those who were earlier engaged in the manufacture of photo films?

Too many things shatter in too quick a time
Too many things shatter in too quick a time | Source

Rapidity of Changes

During 2008-2009, a single crisis in USA, namely the sub-prime crisis, put virtually the entire economy of the globe into disarray. The banking, share trading and insurance companies in USA got into deep trouble. There was a severe glut in money flow, which was affecting every other sector. Just before the crisis surfaced, In countries like India that were thriving on the Information Technology boom, personnel managers were working over-time to recruit staff from college campuses for manning their future projects 2 years ahead of time.

But, post the US financial crisis, large scale job cuts continued to affect many Industrial segments across the globe. Promotions and increments were kept on hold to personnel in organizations working for multinational corporations in India. Recruits were asked to wait. How are HRD managers to manage these unprecedented turn of events? How are they going to face the wrath of people whom they have been gleefully recruiting left and right, even without bothering about the candidates' true merits?

Thus one singular crisis at one end of the globe has the potential trigger rapid change of events across the globe. This is going to be the greatest challenge for the HRD managers in the future. What strategies could be suggested to HRD managers is a mute question that is difficult to answer at this stage. But certain broad paradigms can be suggested.

(1) There has to be a job-loss-buffer which needs to be introduced in the compensation plans of employees. It could be like insisting the employees to accept a short-payment of some percentage of their monthly salary, which will however accumulate as a saving in their account. The management too will contribute an equal amount to this saving. Should there be an unexpected job cut, the employee will be repaid this amount along with the management's contribution, added with a nominal interest for the period the amount was in savings.

(2) Alternatively, the personnel department can also try to work out an unexpected-job-cut insurance scheme with insurance companies and the management can pay the premium, as a part of perks to the employee.

The need of the hour in human resource management is an over doze of "human face" in dealing with employee welfare and job security. This will be the single largest challenge for HRD managers in the troubled economy.


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    • C.V.Rajan profile image

      Disillusioned 3 years ago from Kerala, India

      Hi Florish,

      That's the evil effect of Globalization!


    • FlourishAnyway profile image

      FlourishAnyway 3 years ago from USA

      I wasn't aware of the extent to which the US economic crisis impacted new hires elsewhere. Thanks for describing the issue.