International HRM Developing as an HR Business Partner - Essay Example

International HRM Developing As an HR Business Partner Table of Contents Introduction 3 Role of the International HR Business Partner 3 Changes in the role of HR business partners in past one decade 5 Challenges faced by International HR Business partners in different HRM areas 7 Influence of external stakeholders on the typical responsibilities of International HR Business Partners 9 As an HR Business Partner how can you contribute to the strategic success of the organization? 10 Recommendations 11 Conclusion 12 Reference List 13 Bibliography 14 Introduction The role of human resource managers and functions is vital for a firm’s performance. In present market situation, every multinational proclaim in their annual reports about the importance of its workforce as an asset. However, in many organisations HRM (Human Resource Management) is considered as significant as it should be. From this, it can be naturally assumed that the broader aspects of HR are better observed at international level when the companies compete with a pool of bigger and better corporations. International HR has earned itself so much significance that various companies have considered making HR its business partners (De Cieri and Dowling, 2006). The paper focuses on discussing various aspects of HR business partners, the current status quo and future prospect of growth of HR business partners and impact of various stakeholders on the responsibilities of HR business partners. Role of the International HR Business Partner The concept of HR business partner was introduced by Dave Ulrich. According to him, HR business partners are personnel, who work closely with the top management of an organisation so as to develop a comprehensive HR schedule that supports the overall objective of the organisation (Ulrich, et al., 2009). The international HR business partners are incorporated by companies so that along with general HR functions, shared services and centres of expertise can be developed. HR business partners need to have certain skills to operate in the market, especially globally. Communication skills are considered to be of paramount importance for them as they need to deliver and convey messages regarding company’s financial and overall situation and other corporate decisions to employees as well as external partners of the company. They must have sufficient knowledge and experience regarding organisation’s business and the relevant industry. The other qualities include self-belief, confidence and ability to fabricate long-term valued relationships with clients (Deloitte, 2011). Dave Ulrich designed a model that best explains the role of HR business partners: Figure: 1 (Source: Author’s creation) Strategy Partner As strategy partner, the role of human resource is to act as an internal business consultant, acquire talents and develop them as future leaders, build credibility of the organisation to investors and other stakeholders, redesign organisational structure and strategic objectives as per changes in business environment and develop strategies to operate in culturally diverse international market. Their functions also include managing merger and acquisition, outsourcing and off-shoring approaches and devising cost reduction programs. Change agent As change agent, the HR business partners ensure that strategic staffing is done through talent management and acquisition, training and development, fresh hiring and/or termination. It is further responsible for performance management, job design and workforce management. Administrative expert The role of administrative expert is to design compensation and reward packages for individuals, devise plans that will support organisation development and learning, assess employee attitude and motivation, communicate organisational policies, procedures, values and cultures. Employee champion The HR business partners are responsible for managing employee relations, intra-organisational conflicts and competitions, grievances and disciplinary issues, industrial labour relations at domestic and international level and responding to resistance related to organisational changes (Ulrich, et al., 2009). Changes in the role of HR business partners in past one decade Evolution of HR business partnership in global market is a recent development and is still in its nascent stage of development. According to Benefits & Compensation International, HR still has a long way to go to become strategic business partner. Survey by the magazine in Europe, Asia and Africa shows that around 65 percent of HR department consider themselves as strategic partners of their business, while the actual score is around 20 percent only. However, slow progress has been observed in the shifting role of HR in recent years (Caldwell, 2008). The following diagram shows the current state of HRM as business partner and its future prospect: Figure: 2 (Source: Author’s creation) The growth of HR business partnering worldwide over the past decade resulted in supreme changes in HR competency models. Slow but steady growth has been observed in HR functionality. The model proposed by Ulrich illustrated the various competencies HR personnel need to incorporate in their activities to achieve competitive advantage. The four pillars of Ulrich’s model focused on shift of HR activities from traditional support role to a delivery function that collaborate imperatives of business success (Ulrich, Younger and Brockbank, 2008). Figure 2 explains the shift in the HR roles from intra-organisation to global inter-organisational activities between the period ranging from 1990 to 2010 and onwards. According to different organisations that has emphasized on HR as strategic business partners, Human resource department was earlier responsible for managing employees and serving consumers but growing demand of diversity in the HR activities has mandated the shift in HR role. Figure: 3 (Source: Author’s creation) The new model of HR competencies (Ulrich, et al., 2009) suggests that the new generation HR personnel are increasingly becoming credible activist who are respected, admired and followed by employees and have a creative approach towards task by challenging traditional assumptions and offering new angles. These personnel have tendency to be cultural and change steward; they hold past culture as base and develop new culture as well as introduce changes in strategies, project implementation and other initiatives. The personnel are highly inclined towards designing organisational structure and strategies and executing operations efficiently. They have abilities to form business ally by responding to external threats and opportunities, maintaining value chain in the business and responding to consumers by coordinating with other departments. It is because of these competencies that HR has become successful in recent years to be strategic business partners. Challenges faced by International HR Business partners in different HRM areas Figure: 4 (Source: Author’s creation) In figure: 3 the challenges that are faced by HR business partners in international business environment has been represented pictographically. Recruitment: The various challenges faced by HR in international recruiting are adaptability to globalisation, absence of motivation, nature of process, strategic prioritisation. New recruits often lack global adaptability and decline scope of job rotation. Motivation is a major barrier in recruitment process as the HRD receives little appreciation for good recruits and performers. However, they are highly criticised by top management for unproductive employees. In addition, the recruitment process is not very cost-effective and is often rigid and non-responsive. Lastly, international HR business partnership is an emerging process hence reviewing staffs’ need and collaborating that with the task sometimes proves to be a great challenge. Selection: Selecting right employee for the right task has become a great challenge to HR managers. It has been observed that recruitment is done on preliminary selection basis but the recruits many a times lack creativity, ability to innovate, flexibility and motivation. This poses a threat to Hr capabilities and capacities. Moreover in a globalised market, recruitment can be possible either from developed or developing economy. In developed economy, due to saturation hiring is a difficult task whereas in developing economy, too many applicants dilute the process. Employee participation: with growing cross-cultural environment, creating a participative workplace has proved challenging to HR managers. Employee participation and involvement has proved a complex task for organisations. High resistance, low morale and traditional thinking have caused low productivity and high turnover. It has been observed that a number of cases have been reported in multinationals regarding employee discrimination. Absence of mutual understanding and cohesiveness has made function international HR challenging. Training and development: The challenges that are faced by HR personnel in training and development of new as well existing employees on international front include cultural barrier, language barrier, technological changes, high cost, rigid scheduling structure, age, gender and professional qualification. In international human resource management, the process of training and updating skills of individuals is threatened by individual perceptions and behaviour towards co-workers. Cultural differences have also led to complications and conflicts. Learning: According to Peter Senge’s learning organisation theory, only those organisations grow eventually, that nurture creative thinking, innovative approach to problems and where employees believe in collective learning to support organisational development. But in reality, collectiveness is very rare to observe in organisations and the rigid structure of organisations also prevents employee collaboration at times (Farndale, Scullion and Sparrow, 2010). Influence of external stakeholders on the typical responsibilities of International HR Business Partners The role of HR business partners in an organisation is quite complicated as they need to deal with the organisations’ internal as well as external stakeholders and top management to ensure that the organisational goals are effectively achieved. The HR business partners share their responsibilities with the owners and internal clients of the organisation. The HR business partners are responsible for collaborating stakeholders’ interest and internal clients’ interest. The external stakeholders to an organisation are its investors, creditors, lenders, banks and governments of different nation where the company is operating. Figure: 5 (Source: Author’s creation) It is a major challenge to align internal functions of organisation with the shareholders’ interest. To maximise stakeholders’ wealth the international HR partners need to consider a lot of factors such as changing technology, globalisation, shortage of talent and shift in demographic structures. The factors that drive stakeholders’ interest are revenue growth, asset efficiency, operating margin, volume, price realisation, talent strategies, learning and development and organisational capabilities. With growing changes in business sector, stakeholders have been increasingly influencing company’s business activities. Governance and social responsibility: Establishment of business governance in the form of mission, vision and objectives are sometime ignored by top management of the corporations. Although profit is main motive of any organisation, it is very important that the company maintain a balance between their profit earning objectives and social responsibilities. The external stakeholders have always insisted on companies to ensure that the social responsibilities of the organisation are diligently met. This is situation where International HR business partners enter; they ensure that the requirements of stakeholders are met by the organisations. Performance and wealth maximisation: The global stakeholders of present era have started taking greater interest in the activities of the company. With evolution HR business partners, the shareholders have better access to organisational activities and its objectives. The HR partners ensure that the interest of the stakeholders are protected and collaborated along with activities of the organisation. They ensure that company achieves its short-term goals while managing stability in its long-term relationships. The HR business partners are similar to a bridge that create and maintain transparency between management and stakeholders. They are responsible for building and maintaining trust in long term relationships (Francis and Keegan, 2006). As an HR Business Partner how can you contribute to the strategic success of the organization? An HR business partner is a sales person of human resources activities. He/she represents the human resource policies and practices that can be integrated with organisational objectives for business’s success, to the internal as well as external stakeholders. The HR business partners require certain skills and competencies that differentiate them from general HR managers. From personal research, the researcher has observed that he/she has certain skills and competencies that can be useful as HR business partner, such as, client relationship management skill, communication skill, negotiation skill, interviewing skill, networking skill and assessment skill. Further, the researcher is competent in understanding the financial structure of the business and connecting productivity with the financial performance. The areas where the researcher needs training and assistance from the employer are handling organisational development, strategic change and project management. Alongside, the research needs exposure to cross-cultural management, client handling and strategy development. The researcher needs to have good exposure of overall human resource activities of the organisation. For this purpose, the researcher should have sufficient experience of front as well as back office human resource activities. Employers have a tendency to question the motives of the employee regarding requirement of training, so that their investment is not wasted. The researcher needs to assure his/her employer about the commitment he/she would devote towards the organisation after the requisite training. The researcher has to explain the benefits that the employer can have from his/her acquired skills. These benefits are listed as follows: Creating transparency between management and stakeholders and earn credibility and accountability on behalf of organisation. Managing organisational crisis, resistance and conflicts during strategic changes. Contingency planning in absence of sufficient resources. Negotiating with other HR business partners to protect client’s as well as shareholders’ interests. Devising alternate plans to achieve organisational goals and objectives. Ensuring comprehensive participation of employees and management and minimising friction (Lambert, 2009). Recommendations As recommendation it can be suggested that the impact of globalisation is profound on organisations and incorporation of HR business partners in necessary for them. HR business partners provide competitive advantage to the activities of an organisation. Corporations that are operating at global market need support of their HR business partners to maintain trust and faith in their long-term relation with external parties such as governments and creditors. Conclusion The scope of international HR business partner is huge and has a profound impact on the development of an organisation. The concept was introduced and developed by Dave Ulrich, who described that an organisation needs integrated human resource solution which cannot be availed through mere involvement of HR department and the personnel needs greater key skills and competencies. The paper has explained various theories relevant to HR business partners and competencies. Alongside, the paper has identified various external stakeholders an organisation cater and their impact on responsibilities of the HR business partners. Reference List Caldwell, R., 2008. HR business partner competency models: re-contextualising effectiveness. Human Resource Management Journal, 18(3), pp. 275–294. De Cieri, H. and Dowling, P. J., 2006. Strategic international human resource management in multinational enterprises: developments and directions. Handbook of research in international human resource management, pp. 15-35. Deloitte, 2011. Business driven HR. [pdf] Deloitte. Available at: [Accessed 07 June 2014]. Farndale, E., Scullion, H. and Sparrow, P., 2010. The role of the corporate HR function in global talent management. Journal of World Business, 45(2), pp. 161-168. Francis, H. and Keegan, A., 2006. The changing face of HRM: in search of balance. Human Resource Management Journal, 16(3), pp. 231-249. Lambert, A., 2009. The effective HR business partner. [pdf] Corporate Research Forum. Available at: [Accessed 07 June 2014]. Scullion, H. and Starkey, K., 2000. In search of the changing role of the corporate human resource function in the international firm. International Journal of Human Resource Management, 11(6), pp. 1061-1081. Sharma, S., Sharma, J. and Devi, A., 2011. Corporate social responsibility: the key role of human resource management. Human Resource Management: Issues, Challenges and Opportunities, 9, pp. 10-85. Ulrich, D., Allen, J., Brockbank, W. And Youn, J., 2009. HR Transformation: Building Human Resources from the Outside In. New York: McGraw Hill. Ulrich, D., Younger, J. and Brockbank, W., 2008. The twenty‐first‐century HR organization. Human Resource Management, 47(4), pp. 829-850. Bibliography Caldwell, R., 2003. The changing roles of personnel managers: old ambiguities, new uncertainties. Journal of Management Studies, 40(4), pp. 983-1004. Holbeche, L., 2013. Aligning human resources and business strategy. London: Routledge. Kochan, T. A. (2004). Restoring trust in the human resource management profession. Asia Pacific Journal of Human Resources, 42(2), pp. 132-146. Schuler, R. S., 2000. 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