The approach of the millennium has brought about new challenges for human resources departments and practitioners around the world. These new challenges raise questions about the nature HR practices and the role of HR professionals, and imply new approaches for the HR function in product and service delivery.
Organisations recognise the critical importance that human capital means for competitiveness, and ultimately survival in the modern era. No longer are leading edge products, cost effective processes, or in-demand services thought to be the key ingredient of success, but rather having and being able to keep the people who will come up with these ingredients time and time again.
This recognition has meant human resources management has become integral to strategic decision-making at the highest level in many leading organisations. But joining the major players at the organisation’s cardinal business table requires that the HR management function comes to grip with the key HR issues as well as key business issues facing their organisations. David Ulrich (1997), a renowned HR expert and author, has identified eight of these issues that are key if the HR function is to add measurable value, deliver business results, enact professionalism, and demonstrate new competencies.
Briefly these challenges are:
HR management needs to create models and processes for attaining global agility, effectiveness, and competitiveness. HR professionals must master global operating skills and the HR function must build global capabilities for the organisation such as the ability to move talent, ideas, and information around the world.
2. Managing the Value Chain for Business Competitiveness
HR needs to refocus practices more on the value chain and less on activities within the firm. This is important because by shifting the focus from firm to value chain, all HR activities become defined according to customer criteria.
3. Profitability Through Cost and Growth
Revenue growth is a key component of the profitability equation. The main paths to growth include through leveraging customers, leveraging core competencies and mergers, acquisitions or joint ventures. Each of these has HR implications and requires co-operation between management and HR professionals to design and deliver new organisational practices.
4. Capability Focus
Managers and HR professionals should constantly seek the capabilities necessary for success. Whilst general management must identify and foster what capabilities they need to increase organisational competitiveness, HR professionals must frame what they do in terms of these capabilities at an organisational level.
5. Organisational Change
HR professionals need to help their organisations to change, define an organizational change model, disseminate that model throughout the organisation and sponsor its on-going application.
Managers and HR professionals need to be able to redefine work to maximise the value of technology in the organisation. This means making technology a viable and productive part of the work setting, and requires that HR professionals keep ahead on the information curve.
7. Attracting and Retaining Intellectual Capital
Business organisations of the future will compete aggressively for the best people, and the successful organisations will be the ones that are able to attract good people, use them effectively, develop them and retain their skills within the organisation.
8. Transforming the Organisation
Over the past decade, organisations have gone through one change initiative after another including downsizing, consolidations and restructurings. Unlike many of these turnaround efforts, transformation goes to the heart of the organisation changing the fundamental image of the business, as seen by customers and employers. HR has to play a leading role in organisational transformation..
Apart from all these, there are few more areas of Human Resource Management that visage challenges, these are:
Managing Change: Due to volatile conditions of Market, change management plays a role in mergers, downsizing, joint ventures etc.
Leadership Transformation: It is not just about Managers and Leaders, in the changing scenario Leadership has to take a new Avatar. Leaders capabilities and skills requires to be refined.
Knowledgeable Work force: A totally different category of people are joining the workforce. These people need not believe in the Traditional system of management, they are highly knowledgeable, taking responsibilities at a lesser age, have high bargaining power and are earning much better remuneration. This category is essentially found in BPOs, ITES and similar industries.
With the onset of new technological advancements in the coming few years the HR Managers have to face many more challenges, and if left behind there may be repercussions which would be difficult to manage