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Human resource function plays an important role in any organization. It is one of the factors that determine the direction a business takes and therefore a key driver to the success of any business.
As any other business function, human resource function is never static but instead tends to change with the change in the global trends affecting business organizations (Steinbock, 2010: 97). Bearing in mind the trends experienced in the world in general, it is clear that the world we live in will undergo transformation in the near future due to environmental forces at play.
The world has experienced redistribution of wealth, change of power guards, uncertainties in the global economy, and instability.
The business environment and the status quo have been challenged through technological changes, entrants of new players with unique way of doing business, and intense business competition for the market. There is increased diversity in the generations in the workplace due to the rise in the life expectancy which raises the question of management of human resource across a range of age groups.
Social attitude has also experienced revolution and is also under the forces of evolution. These factors have led to the constant change of expectations and needs of the global workforce (Marmolejo, 2012: 374).
As a result of these human resource managers are faced by the challenge of defining human resource functions of their organization in order to fit in the ever changing business environment in the global work place. Therefore, what should be role to be played by human resource function in Nokia Company in order to fit in the global workplace in the future?
Human Resource Trends
A number of researches have been conducted on the functions of human resource in future, in the ever changing business environment. In these studies a number of factors have been identified as key drivers for the change of human resource functions in the future.
In these studies the drivers were analyzed and their implications on the human resource strategy in the future indentified. Two main drivers were identified to be the force behind the change. The drivers fell under forces that shaped operating business environment and those that led to the evolution of trends within human resource function.
In the studies carried out, social demographic factors were identified to play a role in the evolution of human resource function. The forces behind the reshaping of the composition of age, structure and culture of the workforce were identified to be generated by widespread migration and increased aging global population. The workforce needs were also identified to be on a rise.
These workforce needs and expectations are determined by the growing middle class with divergent needs and global representation (Steinbock, 2010: 156). There is also the glowing population of educated middle class from the emerging markets and who now control a great amount of wealth. However, on the other hand there is financial stress on the part of their counterparts in the developed countries.
Therefore, the major factor that will differentiate organizations in the future in their search for talent will be their ability not only to anticipate social demographic trends but also to respond to the key factors appropriately. Rate of population growth, rate of aging of the population of the world, wellness and diversity of the workforce will play a major role in defining roles of a business in the future.
The main challenge that will face emerging markets economies and human resource managers will be to ensure employment of the growing pool of talents through improvement of standards of education and health services provided to the population.
The world has experienced rise in the rate of life expectancy with the rate expected to rise even further in future. Dependency ratio is expected to increase due to the increased population of the ageing people. This is likely to raise issues on age of retirement, provision of work for older generation and provision of pensions.
This increased ageing population has the potential to exacerbate shortage of talent and can cause huge financial liabilities to business organizations and governments as they struggle to meet financial obligations associated with pension fund and other commitment to employees (Stolle, 2006: 414). A mature population on the other hand has the advantage of providing essential experience needed in the business context.
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The response of business organizations in the integration of this ageing and diverse workforce will directly determine their development in the global workplace, delivery of services, operations of the business and the ability meet the ever changing needs of the consumers and the employees. Effective response to a workforce diversified by generations will be required to be localized and with a personalized perspective.
Cultural mix in organizations both in emerging and developed countries will be shaped by migration of the workforce. Therefore human resource managers will be required to developed management skills able to maximize on the contribution of the diverse workforce both in the local and international markets.
They will also be required to understand the needs and expectations of the workforce consisting of various ethnic groups, races, culture among others (Losey and Meisinger, 1998: 170). Another issue that will face human resource managers will arise from transition of middle class. The expectation, aspiration and wealth level of the middle class is expected to rise.
This will not be the case in the developed economies where the middle class is expected to struggle financially for sometime. In most of these developed economies, standards of living and wealth levels have been badly affected by the financial global crisis experienced recently and the fiscal measures put in place to address the financial crises by the governments of the affected economies (Steinbock, 2010: 159).
There have also been negative effects on prices of assets, levels of personal debt and the levels of household’s income.
Another source of drive for future human resource functions will arise from the economic environment. The main challenge of business with international operations such as Nokia will be to compete in the emerging markets economies. The main challenges for human resource function in these emerging market economies arise from the need to recruit and develop talents in these markets.
The world will also experience the convergence of the emerging and developed market economies as a result of divergent rates of economic growth between the emerging and the developed market economies (Gitman and McDaniel, 2008: 221). This convergence of the world economy will be the source of the availability of labour in the emerging markets.
This will result from increased domestic opportunities in the emerging economies and economic challenges facing the developed market economies. Therefore, the need for further studies and job search in developed countries will diminish and as a result most of the talent will prefer to remain at home, thereby impacting on the capacity to innovate.
Human resource mangers are therefore faced by a complex situation of responding to the anticipated human resource needs in these emerging markets. In some countries such as those in Asia, the demand for talent is high due to the fact that the rate of business growth is more than the rate of talent development.
Also, it is considered unviable to transfer employees from west to east leaving human resource mangers with only option of developing talents in these countries. Therefore, the competition that arises in these economies poses a human resource challenge that calls for the review of the system of education in these countries.
With the world economy facing various challenges that include prevention of any future financial crises, recessions in the short term and balancing long term fiscal policies, consumer confidence on businesses may be hampered (Stolle, 2006: 416).
As a reduction of slowed down business and reduced revenue, business organizations are likely to employ cost reduction strategies in the operation of the businesses. These strategies may lead to reduction of human resource functions and the increased use of technology to carry out functions previously done by humans. Outsourcing will also be considered as an option to reduce costs of operation.
The rate of globalization in emerging market economies is high. Together with development of international companies from emerging markets, there will be a rise in the demand of talented workforce and additional challenge for human resource function to offer services with a global touch (Gitman and McDaniel, 2008: 224).
Therefore business will be required to develop leaders who will be able to understand operations of free markets in relations to the regulated capitalism markets. Human resource functions are also facing influence from business practices in the emerging markets.
There is emergence of new management styles and different cultures. Therefore there is a need to develop an understanding of these factors given the need for partnership between emerging and develop economies and increased collaboration and joint ventures in these two types of economies.
Business organizations require new models to support their operations as they grow into the global business environment. As they do so, complex structures to direct their internal and external operations develop. The complexity of the structures can be a source of risk to the business organization (Rothwell and Prescott, 2010: 556).
This complexity can be traced from regulations, development of procedures internal to the firm, offered products together with systems employed by the firm and reporting needs of the firm. This complexity is a source of challenge for human resource function.
The first challenge arises from the need to mobilize business organization’s ability to handle the complexity and to set up framework for uncertainty tolerance. In additional to this challenge, another challenge lies in the need to look into the complexity that may exist in activities of human resource function.
Human resource plays an important role of establish business trust within an organization through employment of proper ethics. Therefore ethics and trust are two major critical factors that differentiate organizations in terms of recruitment of employees and subsequently their retention by the organization (Losey and Meisinger, 1998: 173).
They also play a critical role in defining the relationship between an organization, government, and society in general. Human resource function will also be challenged by the manner in which employees will prefer to work.
There is decentralization of business functions and emergence of technologies that allow a worker to work away from the conventional work station. These have been the forces that have shaped the approach of employees to work and it is the force that is still shaping future workplaces.
There is also the concern for the environment, home offices and the increase of ageing employees in many organizations. Personalization desire, social change and expectations that differ, have also led to the restructuring of work processes (Kirkbride, 1994: 485).
Together, these factors have resulted into the need to restructure business operations and the working environment to include specific aspects such as team work, flexibility of working hours, design of the work place, change of management style and the layout of the work place.
There is also the view that suggests that self employment that has experienced exponential growth in the recent past and the increased use of contracts will give human resource functions an opportunity to working conditions that are different from the conventional ones.
Collaborations between business organizations and network of people will be a force that will lead to the formation rise of team work and identification of opportunities by individuals. These new methods of work will be challenging to human resource function. A question of collaborative technologies and social media is likely to impact on the future of human resource function.
These two have gained wide acceptance in the business environment which has led to their wide usage (Honeywell, 1982: 234). Social media has the ability to lead to the engagement of employees. Social media can also perform as a tool for acquisition of talent as it has the ability to facilitate communication and collaboration within an organization.
Tools of collaboration on the other hand have the ability to open up the process of innovation and to improve the way work is executed within an organization and across organizations between different partners. Despite these factors, human resource function is considered to be lagging behind in the employment of these new technologies.
Most organizations as a matter of fact do not allow their employees to use social media tools such facebook while at work (Honeywell, 1982: 245). This is despite the claim by these business organizations on their engagement of customers through social media. The contradiction that arises may result into conflicts and confusions within the organization and therefore raise a major challenge to human resource.
There are large numbers of social media users in the emerging markets and therefore a company stands a better chance to engage existing and potential employees, by adapting these technologies in their work places.
Innovation processes can be enhanced by open collaboration. The success or failure of this is determined by the cultural factors, style of management employed by the organization, the mindset of the employees and the reward system within the organization. The main idea here behind this open innovation is the fact that external ideas are required to complement those present within the organization (Walker and Perrin, 2001: 342).
Human resource function will be required to accept the fact that employees will require not only to contribute to ideas on research and development but also to the formulation of strategies that will give the organization a direction.
Another challenge that the organization will face in the execution of human resource functions is to maintain pace with the rapid evolution of the expectations of the employees. Technologies and personalization will have an effect on the manner of interaction between people and the information system and applications.
The availability of many points of information accessibility to customers and employees will lead to the adaptation of these technologies by human resource functions. The most challenging technological development for human resource function will involve the application of those technologies that have impact on the performance of employees.
Business environment is characterized by stiff competition. Therefore there is the need to come up with business models to set the basis for the funding of operations (Kirkbride, 1994: 489).
There is also a shift to collaborative consumption which has led to the sharing of most of resources, which is preferred over buying them. This, from the perspective of human resource function calls for a fundamental shift in the thinking and cultural behaviour of the company.
To add to the environmental factors, various human resource factors have led to the evolution of human resource functions. These factors will have a major impact on the execution of human resource functions in the future. Human resource has always faced the challenge of choice between focusing on the transaction elements of its functions or to take strategic partnership with the business (Rothwell and Prescott, 2010: 560).
However, with the rise of demand for talent, uncertainty in business environment and intense competition, human resource is expected to play more strategic roles. Therefore the human resource is faced with the challenge of shifting its focus on service delivery to strategic management.
Human resource focus on a large scale on the transactions can lead to their outsourcing and the strategic management being exercised by specialists external to the organization. Therefore the chances of success on strategic roles for those who prefer transaction roles are minimal.
Human resource department has the mandate of supplying an organization with the best possible talent (Kumar, 2011: 23). There is the existence of talent gap in the world which in most countries in the developing world is as a result of education standards.
The shortfall of talents can also be blamed on differences in culture and expectations (Honeywell, 1982: 265). Human resource management will have more responsibility of developing a model that can help the firm to tap talents from the global workplace.
As organizations increasingly employ metric, measurements and other analytical approaches to measure performance of business operations, the analytic of human resource performance will be crucial in the determination of the health of the company (Walker and Perrin, 2001: 345).
The implementation and subsequent adoption of these metrics by human resource will lead to success as a consequence of availability of continuous information together with the clear knowledge of the intention of the metrics and their meaning.
The world has embraced the idea of management of employee lifecycle which involves a total view of an employee’s career from recruitment through performance appraisal, progression of the career, and training and development. (Rothwell and Prescott, 2010: 564) Employers have found themselves involved in the early stages of employees than they used before as a result of technology.
This technology has made it possible to view the total lifecycle of an employee for a company like Nokia working across different countries. The use of these technologies has also made it possible for employees to access personal information easily across different geographical areas.
Organizations will be faced by a challenging workforce environment in future due to forces currently in operation which eventually will change the way business operate.
Therefore a company will be successful to compete in the global business environment only if it will be able to maximize the contribution of its human resource functions in the future. To achieve this, a company will be required to align its strategies with its core business operations and to employ talents necessary for the demands of the future workplace.
First the business will have to fully understand its clear purpose and then develop human resource strategies that will help the company to develop manpower able to meet the demands of the company. In developing human resource strategies, a business will be required to take into account demographic business environment, economic environment and factors specific to human resource.
In particular, the issue of workforce diversity will need to be addressed. This is because a diverse workforce brings in challenges to an organization ranging from differences in values, cultural beliefs and the manner of communication.
There is also the issue of the ageing workforce due to the rise in the expectancy level in the world. The main challenge to organizations in this case is to handle this generational diversity, with the main source of challenge arising from the values held by members of different generations. In terms of economic factors, businesses will be required to consider the effects of the emerging markets on the practices of human resource.
In these markets economies, there is the growth of the middle class who command a great deal of wealth. These people are guided by their aspirations for wealth as compared to their counterparts in developed economies who have just emerged from financial crises experienced in the world. These are some of the factors that will have to be considered in future.
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