Contemporary Human Resources Management Challenges - Essay Example

CONTEMPORARY HUMAN RESOURCES MANAGEMENT CHALLENGES By Student Name Course Instructor Date CONTEMPORARY HUMAN RESOURCES MANAGEMENT CHALLENGES Skills shortages in workplaces The invention of information and communication technology (ICT) has incredibly transformed employers’ expectations of their workers. The increased globalization of business organizations has led to transactions that have greater reach on the globe than before (Price, 2011). As well, human resources management has equally evolved to address dynamic challenges related to employees in workplaces. Personnel managers set policies and procedures to pave a way for effective organizations management. Key to effective organizations management is the recruitment of competent personnel with relevant qualifications to execute job requirements to the best interest of their organizations (Price, 2011). Skills shortages refers to a situation in personnel recruitment which managers find the demand for workers for a certain occupation to be greater than the supply of workers who are qualified, available and willing to work under the existing market conditions (Simons, 2011 & Sims, 2006). Skill shortages are likely to occur during times of rapid economic growth. At such times, personnel managers may hire workers whom they consider under-skilled. Personnel managers may also think their existing workforce is under-skilled relative to some desired level. However, the supply of qualified and willing workers to work in a given profession may be greater than demand therefore leading to a surplus on other economic times (Chermack and Lynham, 2003). Surpluses are more likely during economic recessions. The role of human resources managers is to create organizational value through its personnel (Garavan et al. 2002). As a result, skills imbalances may lead to sub-optimal organizational production, contrary to the organizations’ philosophy commitments. There are different factors which determine organizational demand for skilled labour. These include introduction of new products or services, technology in workplaces, or shifts in the composition of industry associated with globalization (Garavan, 2002). Skills supply for a given occupation is highly dependent on ageing of the workforce, enthusiasm in particular profession and changes in the numbers of students entering and completing training programs. The role of human resources managers is to recruit competent personnel to engage in the production of goods and services. However, occupational skills shortages are major challenge for personnel managers in choosing the right candidates to work for their organizations. Research has pointed out that around 60% of personnel managers are faced by skills shortages in their own workplaces (Chermack, et al. 2003 & Garavan, 2002). This means two-thirds of different work places having workforce lacking the right skills sets to function effectively. Every organization has established policies and procedures to govern their operations. The reason for operation standards is to maintain optimum performance levels in accordance organizational missions. The lack of qualified workers to work in a profession presents personnel managers with the challenge to fill organization with the right personnel to work towards organizations goals (Chermack, et al. 2003). Workers skills inadequacy is a major challenge to an organizations performance and productivity. Key to successful personnel recruitment is the examination of job expectations when recruiters are looking for the perfect match. Employers evaluate the need of training their employees or new recruits in the effort to equip them with the right skills to engage in their work productively (Garavan, 2002). Industry skill shortages prompt personnel managers to hunt for additional skills sets which new incumbent would bring to an organization if they fit in the organization. One of the major challenges caused by skill shortages for organizations management is the availability of individuals to take up organizational leadership and management roles. Personnel managers face the problem to identify individuals with leadership and management skills to steer organizations in accordance with their missions (Sims, 2006). The leadership and management roles are entirely imperative in any organization; profit or not for profit. In situations where the right skills set for leadership and management roles are missing, personnel managers are faced with the dilemma on who should run and steer their organizations in accordance with the established visions, missions and objections. In business enterprises for instance, the management has the obligation to provide strategic leadership amidst cutthroat competition in the ever changing environment (Bing et al. 2003). Organizations leadership determine its success or failure. Yet, personnel managers have to ensure organizations continuity and growth despite professions’ skill shortages. This implies the sensitive obligation personnel managers have been mandated with. Workers’ compensation is an area of major concern in virtually every organization. Organizations establish workforce compensation structures for various reasons; the need to attract and retain qualified and competent workers, employees’ performance motivation and compliance with government laws and regulations (Price, 2011). Many organizations have employees’ remuneration structures based on job requirements and fair market consideration. However, skills shortages results in competition for the qualified individuals who may claim very competitive remuneration (Bing et al. 2003). Personnel managers are bound to stick to the established organizational remuneration policies. On the other hand, the organization may not be able to afford the expertise of such largely sought skills. In the attempt to develop fair compensation system, personnel managers undertake job evaluations assessing the value of the job tasks in relation to other jobs in an organization (Simons, 2011 & Sims, 2006). In establishing fair organizational remuneration structures, personnel managers have the obligation to comply with institutional standardized approaches to job analysis to create internal equity among jobs so that individual employees may perceive their positions as treated fairly within a pay program in relation to other jobs in the organization. In addition, personnel managers have the obligation to examine compensation provided by other organizations for similar jobs. This is increasingly imperative when certain occupations or facing skill shortages and imbalances. When organizations offer similar remunerations with other organizations this imposes competition for the limited workforce. The implication is therefore, personnel managers have to compromise organizational policies to attract qualified personnel during skills shortages occasions (Bing et al. 2003). Occupational skills shortages oblige employers to have employees’ job training programs to equip their personnel with skills to execute their roles in the best interests and mission of their organizations (Chermack et al. 2003). However, many organizations today focus on the need to reduce cost and improve their performance. Retraining of employees would require other resources i.e. financial, training personnel and equipment which would lead organizations incurring additional costs. This imposes a challenge on whether to identify other skills which may be beneficial to an organization or pursue employee training which may be costly to an organization. Personnel management is based on the belief that organizations’ growth and development lies in its human capital (Price, 2011). Human resources management practitioners realize the potential underlying personnel training and development which is indeed their fundamental responsibility. However, personnel training and development policy identify all institutions training needs and avails the resources sparingly. Personnel training and development ensure unique talents are most important for the growth and development of business. The inevitable proliferation of ICT hardware and software applications in work places has made computer literacy a compulsory subject for all organizational employees (Chermack et al. 2003). With the uptake of computers in the business world in the early 1990s, computer literacy skills were a major nightmare for employees. Today, technology in workplaces is entirely dynamic and unpredictable with the proliferation of diverse automated organizational systems. Technology of production requires particular forms of skilled labour, where that labour supply may be inadequate or takes considerable costs to train. Personnel managers require employees to be at par with cutting edge technologies which now constitute the nervous system of many organizational processes (Bing et al. 2003). Technical skills have always been low in the job market. The young generation of workers are more adept with new technologies than aging workforce. Although aged workforce may have accumulated knowledge and skills on business practices; they may lag behind in terms of technology and innovation. There are considerable skill gaps and imbalances when it comes to technical knowhow required for implementation of organizational systems and processes (Chermack et al. 2003). In some occupations such as IT, technology and engineering the right match should be identified rather than lose money by reducing the company capacity having left skilled roles vacant. Employee training programs are a major challenge in a personnel department. The challenges are attributed to scheduling, costs and rapid changes. Managers and supervisors may be reluctant to let employees take much time away from their duties for training (Chermack et al. 2003). On the other hand, organizations are cutting their expenditure to optimize their profit margins. Training initiatives are sometimes perceived to have little direct value based on purely financial terms (Simons, 2011). In addition, rapid changes in technology, organizations initiatives and programs make it difficult for personnel managers to adequately prepare training materials and deliver training before their employees need information and new skills. In order to cope with the challenge of skill shortages, organization can embark on formal training, structured mentoring and coaching activities through the creation of a learning environment (Simons, 2011 & Sims, 2006). The adoption of such strategy requires investment of time and resources to develop talent that would have a tremendous impact on the organizations management. The personnel managers need to identify individual employee talents and enthusiasm so as to identify the appropriate training needs that can not only contribute to the organizational growth and performance leading to employee satisfaction and a sense of achievement (Garavan, 2002 & Simons, 2011). On the other hand, organizations are better placed to defy organizational talent wars during skills shortage occasions by ensuring talent base to operate their organisations effectively. Personnel managers can help managers balance work demands with the need for employee training by scheduling multiple small training sessions rather than having all-day or long training sessions (Price, 2011). Alternatively, they can offer the same sessions numerous times so that managers can spread out their employees and balance coverage duties (Price, 2011). Other training scheduling mechanisms include non-classroom-based methods such as computer-based training, information handouts and short training modules conducted during other routine meetings like team or company meetings (Garavan et al. 2002). Human resources managers should employ comprehensive return on investment analysis to demonstrate how organizational training initiatives would impact on its performance and growth potentials. This would involve calculation of total benefits of training including money saved and increases in revenue. In order to avoid organizational skills shortages, personnel managers should anticipate skills requirements and articulate human resources planning (Bing et al. 2003). This enables identification of organizational skills needs and effectively bridging the gap at the right time through internal or external recruitment (Chermack et al. 2003). Human resources planning help HR managers to identity employees’ talents and skills and how they would effectively match identified organizational needs. Such steps would helpful in filling positions requiring technical capabilities or managerial roles. In occasions of adverse occupational skills shortages and imbalances, HR mangers may need to compromise their remuneration structures if the needed skills would ruin organizational performance (Price, 2011). As pointed earlier in this discussion, management and technical positions play a significant role in the entire organization productivity and continuity. As a result, such roles should be rewarded in accordance with the skills and expertise which may have an overhaul impact on an organizations performance. The implication of aging workforce in work places The ageing workforce in workplaces presents a host of issues to HR managers and employers at large (Patrickson, 2004). The developed countries have demonstrated an increasing trend of more aged workforce continuing their employment after their retirement. As a common practice today, there is notable changing nature of work and subsequent penetration of complex technologies and operation models in various industries that require continual skills maintenance, development and innovation which may be challenging to the aged workforce (Patrickson, 2004 & Levinson, 2000). Over the last two decades, there has been increasing trend of old age participation in work places. According to Australian Bureau of Statistics [ABS] (2005), 4% of Australian workforce constitutes old age for high-demand highly skilled or professional occupations. In UK, 3% of the working population in 2010 were the aged work force (Office for National Statistics (ONS, 2011). While similar trends are witnessed in many developed states, there is major concern for HR policies procedures to manage such aged individuals at work. Various challenges face HR managers as they strive to resolve competing demands to retain aged workforce. The managers are required to develop employment policies and practices that are legally and ethically justified (Levinson, 2000). Firstly, their organizations have to comply with government’s regulations on retaining of aged workforce. For example, Australian government encourage its older citizens to continue working for as long as possible (ABS, 2005). It is controversial on how a government encourage its old age citizens to engage in work while the employers may deny them the opportunities or the aged workers voluntarily choose to quit the employment. Citing the case of developed countries, there is growing trend with governments’ concern about the impact of population ageing on the sustainability of their workforces (De Cieri et al. 2005). Some countries anticipate that after baby boomers retire from their jobs, there will be insufficient workers paying taxes to support social security and healthcare at current levels. Hence, they encourage aged workers to continue with their jobs. In such cases, the employers or personnel managers are legally bound to develop policies to engage old age employees in workplaces (Carson and Winefield, 2004) HR managers are faced with the question regarding the benefits aged workforce can offer to their organizations as well as what is the public recognition of employers who employ aged staff, and subsidies for retaining such workforce (Carson and Winefield, 2004). Personnel managers have to balance between the young and aged workforce in their recruitment. The obligation of HR manager is purely based on provision of human capital to work for organisation’s productivity and effectiveness. Intellectual capital comes with occupational competencies, firm-specific knowledge, creativity and innovativeness (Carson et al. 2004). Research literature firmly supports that individuals working in knowledge occupations are more likely to improve their competency with increasing age. This can go up to 70 years of age or even more. Alternatively, today’s knowledge economy is characterised with creativity and innovative ideas which are more commonly associated with youth (Fuller & Unwin, 2005). The dilemma sets in as to who is the right match for HR managers. Although certain stereotypes may influence the selection process, personnel managers perceive aged workforce have indispensable intellectual capability required for an organization competitive edge (Patrickson, 2004). Research evidence shows that older workers are just as adaptable, flexible and innovative as younger ones (Fuller & Unwin, 2005). Some HR practitioners do not support the fact that older workers are better than younger employees. They belief older workers are less suited to the demands of the modern workplace. This can be viewed as a move to the discriminate against older workers in workplace which has legal implications (Levinson, 2000 & Haight, 2003). Although other HR managers view their old workers as productive, they may as well perceive young employees as a better investment for their organization due to new ideas and skills. The innovative and entrepreneurial traits are most valued in today’s business world and HR managers have the obligations to ensure fair personnel policies which do not discriminate on the basis of age of workers (Chiu et al., 2000). HR managers are faced by the challenge to understand the diverse expectations of their aged workers (Patrickson, 2004; Levinson, 2000 and De Valk, 2003). For instance, would they prefer early retirement if offered? Would money be a key factor in making retirement decisions? Would they require working full time or continue working part time? Some old age workers may consider retirement may jeopardise their future financial position (De Valk, 2003). HR managers’ knowledge of their aged workforce determines the extent in which aged workforce preferences are realised. The decision of whether or not to continue working is complex and influenced by a combination of factors which are unique to each aged worker (Cully et al., 2000). Some workers may work due to financial need while others may enjoy the nature of the work. HR managers should discuss with their aged workforce their employment preferences in order to prolong such employees’ productive working lives and to the benefit of the organisation. This is because it may be challenging to replace skills lost through retirement and retaining best talents may boost organizations long-term goals (Fuller & Unwin, 2005). This will require collecting information on each of their older workers to find out what their intentions, expectations and aspirations are, and to identify the range of employment options that they could possibly put in place. In addition, they should put in place mechanisms to identify workforce talents. For instance, having performance management systems that can be used consistently across all age groups is the best practice (Patrickson, 2004 & Levinson, 2000). Also, line managers and supervisors need to be developed to ensure they have the necessary skills to manage workers of all ages effectively. The retaining of aged workforce will require HR managers to find such employees retirement expectations and needs, and develop individualised programs to meet such needs (Levinson, 2000). It’s the practice of personnel managers to retain and reward workers in accordance to merit and performance. Failing to recognize such employees, the employees may retire leading to lose of competitive expertise or move other organizations that provide better employment terms. Aged workforce in workplace requires continuous updating of skills (Cully et al., 2000). This means organizations have to commit a certain amount of revenues for training such employees to adapt to organizational changes and engage in organizations production processes. The consideration for training aged workers depends on the nature of their tasks. However, many organizations are reducing the expenditure to create optimal profit margins. Although training such employees may be perceived as costly retarding their organizations economic performance, an effective cost-benefit analysis can show the significance of training programs. HR managers may face aged employees willing to pursue different roles in the organization (Patrickson, 2004). 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