Imagine an organization in the high technology area of wireless. The market dynamics are very high due to the impact of the technology. This calls for strategic changes in business on a constant basis. In this environment a misalignment between the organization direction and human resource direction can be fatal. This can be demonstrated by taking a case study of the technology change.
Second generation technologies in mobile communication dominated the scene for a decade. Gradually there was a change in the way consumers used the services. There was more emphasis on the data services than the traditional voice services. A firm working in developing these technologies easily picks up these indicators from the market and the industry bodies. The business is also aware of the future changes with third generation mobile technologies.
However in this case, the human resource department is totally unaware of the changes and the future direction. This has direct impact on the way the resources are picked and trained. Without the strategic direction, the organization still has and continues to grow the resources to tackle the second generation technologies, which is the current market requirement. When the new technology arrives, the organization has to transform almost fully within a short time.
If the human resources department was proactive, it would have picked up the business directions. This would have directly impacted the type of resources that they would bring into the company. The new recruitments would have skills necessary for the current requirements as well as to move to the new technologies. The organization would be better equipped and would be able to move faster.
Although the above example is a simplistic illustration, it is an indication of how much human resources can impact in the modern business environment. The role and importance of human resource management have changed over the years. From the traditional role of recruitment and retaining employees, the function now looks at a broader spectrum of activities in an organization. In line with the expanding scope, the function has increasingly become a strategic unit in organizations.
In the current business environment which is characterized by dynamic changes and speed of decision making, human resources has been effectively used by successful organizations to bring about competitive edge. This is more relevant in an age when intellectual capital is considered to be the most important competitive advantage.
This paper looks at the different aspects that influence the role of human resource management and the different functions that it has to perform in the current business environment. It also looks at the key trends in human resource personal in the current environments and its impact.
Human resources have greater responsibility of ensuring that the organization is able to attract, retain and contribute to the growth of the firm. It now needs to understand the business need and ensure that the organizational talent level is aligned to achieve the business goals. Leadership development is another key area where human resource is increasingly seen to provide initiative in an organization.
Further, the paper tries to identify key challenges that arise due to the new business and working environment. From managing limited teams in single location, human resource department now deals with multi-cultural environment with different perspectives and ways of working. Diversity can now be put to the advantage of an organization instead of creating hurdles in working closely. Innovativeness of a firm now could be based on diversity. This illustrates how the function now needs to adopt new tools, strategies and techniques for effectively carrying out their activities.
With increasing number of acquisitions, mergers and consolidation in the market in most industries, creating the best team out of the different cultures, work environments and practices is an ongoing challenge to the human resource development. It must ensure that the productivity and availability of talent is consistent when organizations go through such major changes. It must also ensure that the underlying DNA of the organization that enabled it to be successful is not lost when such changes occur.
Further challenges for the companies in the knowledge economy can come from aspects such as population growth. It is imperative for organizations to look long term, predict the gaps in talent pool that might arise and proactively prepare for it. While there are already different solutions available, it is necessary for organizations to adopt those solutions that fit in the organization’s culture.