In order to effectively compete in the global market economy, organizations must develop a way to sustain a competitive advantage. It is now an established fact that most successful global organizations can attribute their success and competitive advantage to the uniqueness of their workforce and the system they put in place to effectively manage their human capital (Tayeb, 2005).
The most challenging task of most companies is how to identify, attract, and retain an adequate number of managers who have the expertise and the experience in coordinating global strategic efforts while, at the same time, balancing the unique conditions of the local country (Tayeb, 2005).
Overseas subsidiary management is, therefore, a unique experience that requires managers to manage the demands of the global market, and keep an eye on the local trends of the host country. This essay seeks to identify the unique workforce conditions in the United Kingdom and the appropriate approaches that can be used in handling such conditions.
Local conditions of the workplace in the UK
The United Kingdom is a highly developed country with a partially regulated market economy. Based on market exchange rates, the country is ranked at position six worldwide and third in Europe, after Germany and France. The workforce conditions in the nation reflect those of a typical developed country under democratic governance structures.
In the UK, all workers are granted the rights by the constitution to form unions, with the exception of the military personnel (Davies, 2012). The Employment Regulations Act of 1999 mandated all companies with an employee population of above 20 to allow unionization. Most of the rules and regulations of the country are pro-employees in a number of ways.
First, the country operates on a minimum wage policy. This policy dictates that an employee must not be paid anything less than $5.50 per hour. The rating for employees below 18 years of age is, however, set at $4.75 per hour. The law on unionization gives employees a legal right to protest for their employment rights. Workers in the UK have a 48-hour maximum working time per week, but most people work for an average of between 37.5 hours to 40 hours per week.
Working policies demand that any overtime work should be properly factored in the compensation program of companies. Additionally, British laws stipulate that employees should be given a flexible work schedule that allows one to go to work at the most convenient time of the day. As a result of the pro-employment laws and regulations, coupled with high education levels, personnel in the UK can be considered to be aware of their rights (Davies, 2012).
The other condition of the workforce that is uniquely British is the lack of mobility observed among citizens. British workers are traditionally known to be reluctant to change their jobs or even their places of work and, as a result, they have the lowest job transfer rates in the entire European Union (Davies, 2012).
In terms of workforce skills, the UK personnel are among the most skilled employees across the world. This has been brought about by the relatively high levels high of education in the country. In the city of London, for example, a staggering 60% of the workforce is made up of graduates. Additionally, the unemployment rate of the country is relatively low compared with the situation in low-income and middle-income economies (Davies, 2012).
Corresponding parent-company strategy
The most appropriate approach in the UK is the polycentric method of human resource management. This approach states that the management should consider the unique nature of every market before making any executive decision regarding human resource (Tayeb, 2000). In this approach of HR management, the branch managers of the oversea subsidiary companies are sourced from the local positions since they are the ones who understand better the economic system and the workforce condition of the host country.
In this system, a company’s center of operations does not enjoy the luxury of making all decisions, including those affecting the oversea subsidiary branches. The contribution of the staff from the branches should be accommodated in the final decision-making process (Tayeb, 2005).
Relevance of the hybrid system
The workforce dynamics of the United Kingdom can allow the use of a hybrid system of HRM. In this system, both ethnocentric and polycentric will be applied simultaneously, depending on what managers would see as the better strategy for a company.
Considering that the UK is a member of the EU, which permits free trade and mobility of factors of production, the hybrid system would be the best choice for HR managers who would be leading multinational companies with branches in European countries. In a hybrid system, the ethnocentric approach would be limited to the UK-based workers while the polycentric approach would be used for the rest of Europe (Tayeb, 2005, Tayeb, 2000).
In summary, it is important to note that globalization, as a modern trend in the market economy, has brought about a massive challenge to most human resource managers across the world. Most affected managers are those in multinational countries with branches spread across the globe. This new trend requires HR managers to strike a balance between the demands of the global market and the unique situations in a parent country.
Davies, A. (2012). EU labour law. Cheltenham, United Kingdom: Edward Elgar.
Tayeb, M. (2000). International business: Theories, policies, and practices. Harlow, England: Prentice Hall.
Tayeb, M. (2005). International human resource management: A multinational company perspective. Oxford, United Kingdom: Oxford University Press.