Human Resource Management (HRM) issues and challenges

Nothing is permanent in this world, except the change. This change has brought a lot of challenges to the HR  managers. Though HRM is facing ever-changing challenges but it continues to be crucial for the success of a firm. But in reality, the job of the HR manager is no easier than it was earlier. In short, the major challenges of HRM today are :

1. Outsourcing HR activities: A trend that is seen nowadays is outsourcing HR activities. Some executives assume that it offers competitive advantage through reduced costs, and improved flexibility. Outsourcing allows the hiring of specialized expertise. It is also called subcontracting. Outsourcing is the process by which organizations transfer routine (or peripheral ) work to another organization.

• Activities commonly outsourced: They generally include employee hiring, training, and development, payroll preparation, benefits administration, maintenance of legal records  and so on.
• Factors responsible: Major factors/ cause include downsizing, rapid growth or decline of business, globalization, growing competition and restructuring, etc. HR departments are shifting themselves from routine activities to focus more on strategic role. Subcontracting is also done to help reduce bureaucracy and to encourage more responsive culture.
• Negative sides: Due to outsourcing the importance and need of HR departments are in danger. Theoretically, if outsourcing is carried to the logical end, a firm can do without an HR department. Moreover, logics are expressed about the lost jobs in HR functions. Gone are "good old days" of HR managers. Firms which outsource majority of its  HR functions have only 'Skelton  HR departments'. Of course, HR departments are no more job givers.

2. Balancing work life and Family life:  Work-life balance has became a hot issue to the  both HR managers and employees. The main message of this debate is the need for "good work-life balance". But this is not an essay issue in the modern times. This issue becomes more serious when both husband and wife are employed. This problem is not limited to the employees alone. It is also becoming a major challenge to the managers of HR department because more number of women is entering into the organization. The numbers of women  employee are expected to increase throughout the world every year. To reduce the level of stress, anxiety and depression (among employee) HR managers need to introduce work-life balance programs.

What can HR managers do? They can introduce flexible work-hours, job sharing, childcare at workplace, counseling programs, flexible leave policies, etc. 

Result: The firms which have implemented those programs (to reduce work-life balance problems) have got more satisfied and productive employees. 

3. Making HR activities ethical : This is another major problem facing modern HR managers. As we know that, when players do not play well the goal keeper will be in pressure. Similarly, when top management does not implement good corporate governance, HR department will be in pressure. This is an opportunity as well as problems to the HR department. HR manager's role in building an ethical environment in the organization is highly important. HR managers need to show them as an example for ethical behaviour. Unfortunately, HR managers are blamed for accepting bribe (ghush) and involved in unethical practices. A dishonest HR manager can not make other hosts. 

4. Change in employee expectations: What motivated employees yesterday do not motivate today. Employees' expectations are changing every day. Due to changes in workforce demographics, employee expectations and attitudes also have shifted . 

• The problems : Traditional motivational tools like attractive salary and benefits, job security, housing, better offices and the like do not attract and motivate today's talented employees. 
• What they demand?  They demand intrinsic rewards- team work, autonomy, empowerment, ethical behaviour, equity, etc. They want coaches and mentors, not the managers and bosses. They want quality of work life, job satisfaction and work-life balance. They do not like to be hanged on the so-called "24hours a day and 365 days a year" slogans of the companies.
• HR manager's role:  Therefore, to face those contradictory challenges, HR managers must redefine the expectations of employees. They need to discover new methods of hiring,  training, compensating and motivating human resources. 

5. Problems created by BPO and CCs:  Many big organizations today have implemented business process outsourcing (BPO) and call center (CC) options. We discuss both of them separately in following paragraphs.

• BPO :  Companies have begun outsourcing business activities previously performed inside the organization. Hence, they are concentrating their scarce resources towards key functions only. Outsourcing helps to reduce certain business activities. Companies rely on outside vendors to supply the required products/ services or even financial activities. 
• HR challenge:  BPO helps to gain cost advantage. But it is not a free dinner. The major challenge faced by HRM relates to retention of capable employees. HR managers need to play a key role in the development and execution of the business strategy of a BPO. HR managers need to review the hiring process to get right people who can handle BPO project.
• Call centers- challenges (CCCs) : CC is a part of BPO. For example, if an outside company develops the software for our company, if someone else does advertising for our company's products and if some other firm administers benefits of our company's employees; it is popularly known as BPO. Similarly, if some other company makes calls to our company's customers (or receives our customer's calls ), it is called CC business. 

Both CC business and HR problems are increasing day-by-day . Young boys and girls work in CC sites. They are suffering from alienation, confused career plans, less job security and uncertainty about future. In call centers job turnover rate is very high. They lack professional identity. Employees working in CCs pose a challenge to HR managers. How effectively HR managers handle those challenges have become a real test to them.

6. Partnership relationship with unions:  It is an unfair practice from employers' side to dominate the administration of labour unions. Among other management actions found to be unfair are bribing (ghush) employees, using company spy systems, moving a business to avoid unionization, and blacklisting union sympathizers. In general managers' attitude toward union is negative. 

If managed properly unionization offers several benefits to the organization. It can offer positive impact on a firm's performance under given labour market conditions. Unionizations has both positive and negatives sides- it is like fire. HR managers need to realize that unions are unavoidable part of organizations. HR managers have to play a vital role to convert employers and employees from opponents role to friendship role. This in turn, brings synergy effect-a win-win situation. But this is not an easy task, 

7. Corporate reorganizations: Reorganization of big businesses in the form of mergers, acquisitions, takeovers, divestiture, etc. has posed a greater challenge for HRM these days. Many organizations have adapted fundamental business changes. It has become very difficult for HR managers to imagine the circumstances. These reorganizations will have impact on both organizations and employees. Due to above problems employees are experiencing anxiety and uncertainty about their job in a new organization. 

The employees of both "taking over" as well as the "taken over" companies will have anxious moments. It happens so due to fear of loss of jobs; job changes, new roles and assignments; transfer to new locations; changes in salary and benefits; changes in career possibilities; and changes in power, status and prestige, etc. 

It is expected that business reorganizations will increase in size in the years to come. But an important key to the success of any merger or acquistion is based on effective management of HR. 

8. Technology and Self-Service HR: According to the challenges presented above, now we can say that HR function is changing. Perhaps most notably, technology is dramatically altering how HR departments do business. Thus many organizations are installing intranet portals to facilitate "self-service HR." 

The self-challenge of HRM: Ironically, the future of HR department itself sometimes seems in doubt. HR departments will face further downsizing and reengineering. HR departments are facing pressure from senior management to add value to the organization or have their functions outsourced. 

9. Loss of joy and pleasure: HR managers of today are not as fortunate as they were in the past. In the recent years they are facing brick/stones, strikes, lockouts, vehicles being brunt, executives being tortured, throwing of name plates, etc. by employee leaders. The HR managers of today are a poor legacy of the one lived in the past. On the one hand, they are facing above problems. On the other hand, their existence itself is endangered due to heavy outsourcing. If HR  department focuses only on maintenance and administration, it's going to become an endangered species. It is true because outsourcing firms can do a better job of handling such tasks. 

What needs to be done to save the status? - HR  department needs to focus more on activities that add value to the firm's bottom-line activities. They are strategic planning, change management, corporate culture transition and the development of human capital. 

10. Changing qualities of HR professionals: It is the last but not the least important challenge among others. HR executives are in the cross roads. They are caught between the conflicting interests of (a) management and labour, (b) weighted down by his/her loyalty to the management and duties to the workers, (c) subjected to political and bureaucratic hassles, (d) ruthlessly cross-examined in courts, etc. Hence, HR managers do not have on permanent responsibility and qualities. 

The qualifications, skills and conceptual requirements of HR managers are ever changing and becoming tough. Most of the developing countries (like Nepal) HR managers have to deal with workers who refuse to see reason/logic. They have to work with the people who believe that violence pays-and nothing else does. They require different qualities to deal with: 

1. Firmness and fairness, 
2. Sympathy and consideration, 
3. Tact and resourcefulness
4. Knowledge of different laws, labour relations and other terms (multi-disciplinary concept), 
5. Broad social outlook, 
6. Long-term perspective and confidence, and 
7. Advanced academic qualifications. 

To play such tough roles, the future HR managers need to be well educated and experienced. They need professional tough, an open mind, confidence, and objectivity and strategic alignment, too. Gone are good old days. Actually a pro-active HRM tries to convert those challenges into opportunities. They can also minimize the threats created by those critical business challenges.