{"id":21,"date":"2007-03-12T12:41:42","date_gmt":"2007-03-12T07:41:42","guid":{"rendered":"http:\/\/thamesportal.com\/management\/?p=21"},"modified":"2007-03-12T12:41:42","modified_gmt":"2007-03-12T07:41:42","slug":"managing-global-hr-issues-in-today%e2%80%99s-challenging-times","status":"publish","type":"post","link":"https:\/\/mdi.com.pk\/management\/2007\/03\/managing-global-hr-issues-in-today%e2%80%99s-challenging-times\/","title":{"rendered":"Managing Global HR Issues in Today’s Challenging Times"},"content":{"rendered":"

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An article by Dr. Margaret Gremli PhD<\/em><\/strong><\/strong><\/p>\n

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Examining The Past: The Status of HR in the 1990’s<\/strong><\/p>\n

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To begin a discussion on managing global HR issues in today’s challenging times, it is necessary to revisit the 1990’s. Preparedness of HR professionals to embrace today’s challenging times can be traced back to the legacy of both global and regional happenings of this decade. The positive economic climate of the 1990’s had a direct impact on the management of human resources across the globe. At this crucial time, HR professionals were propelled onto a path of ever-changing demands and uncompromising challenges…<\/p>\n

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In the nineties, developing countries in Asia benefited from strong and consistent economic growth in the United States and Europe. From 1990 until 1996 the annual real GDP growth of East Asian economies (with the exception of Japan) averaged 6 – 8 percent. Some countries even exceeded 8 percent. Thailand, for example, averaged around 10.5 percent between 1986 and 1990; and an impressive 8.3 percent between 1991 and 1995. The economies of China, Hong Kong, Korea, Singapore and Malaysia and other East Asian countries followed suit with an average of 5 percent annual growth rates between 1986 until 1996.<\/p>\n

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The role of HR during this growth period was one of supporting management in coping with business expansion. In Asia especially, rapid growth created more and more jobs so that recruitment and retention of staff became a high priority. The HR function in Asia was tasked with filling the jobs created by incoming investment which went hand in hand with expansion into new markets and concomitant economic growth.<\/p>\n

Jobs created in this growth period needed people with technical skills and\/or managerial experience. Growth in the talent pool scarcely kept up with this demand. Career paths were telescoped. People were often hired with minimal experience and then promoted prematurely after fulfilling the basic requirements of their existing role. Staff turnover was a primary concern since this impacted recruitment and training costs.<\/p>\n

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On the other hand, given this trend, employees expected rapid promotion and salary increases to match, regardless of individual or company performance. Companies risked employees leaving for better paid jobs elsewhere and, based on market trends, they had little choice but to grant salary increases across the board. HR professionals across Asia became adept at identifying and recruiting skilled workers, attracting experienced professionals and negotiating attractive compensation and benefits packages. They kept their finger on the pulse of the market to ensure that their companies’ compensation levels remained competitive.<\/p>\n

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During this period, there was also a focus on technical skills training and management development. Technical skills training was needed to upgrade the skills of an expanding workforce, while management development focused on providing young and often inexperienced managers with leadership skills along with exposure to world-class management practices. Growing economies fuelled the blossoming field of training and development.<\/p>\n

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The Economic \u201cFall-out\u201d <\/strong><\/p>\n

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Then, in 1997, it seemed as if the rug was abruptly pulled from under Asia’s feet. The economic crisis of 1997 started in Thailand and quickly spread throughout Southeast Asia. The devaluation of the Thai baht in July 1997 sparked a phenomenon that had an impact on practically every industry sector across Asia. In 1998, the developing economies of Asia shrunk by an alarming 2.4 percent – the first overall decline in 14 years. Among others, Malaysia, the Philippines, Hong Kong, Singapore and South Korea experienced negative growth. Indonesia and Thailand were particularly affected. The concomitant bursting of the dot-com bubble led to the largest decline in the US stock market since the 1930’s and, not surprisingly, the Asian stock markets followed suit.<\/p>\n

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The impact of this economic crisis on HR practitioners was significant. They were called upon to do a complete \u201cU\u201d turn. There was no longer a need to recruit and train. Instead, strategies for retrenchments and salary freezes became an imperative. Training budgets were cut and cost control became a high priority. Rapid changes in economic climate forced HR professionals to adapt quickly to changing circumstances. Rather than being valued for their recruiting skills, companies valued HR professionals who knew how to downsize, cut costs, and manage layoffs.<\/p>\n

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In a survey conducted by the Mercer Human Resource Consulting Group in 2001, the top four reported business responses to the economic downturn are all too familiar:<\/p>\n

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