Globalization-Driven Transformation of Strategic Human Resource Management Practices

Abstract

In a nutshell, Strategic Human Resource Management (SHRM) has been twisted by globalization, from a paperwork operation to a means of taking the competitive advantage of the company that is linked to it, and extending it to the global arena. This paper focuses on the impact of SHRM in the context of globalization, especially the effect of the multinational corporations (MNC's) on their human capital strategies as they try to work in the various cultural, economic and regulatory environments.As the competition for talent is growing worldwide, it changes the way organisations are thinking and are progressively moving towards a borderless recruitment approach, including the creation of a global talent pipeline or trainings that are supposed to be borderless. The HRM-as-mostly-compliance-to-domestic-requirements school has now turned into faster, more strategic frameworks with cultural intelligence as a key factor, diversity and inclusion are no simple “buzzword” and digital HRM is now in the spotlight. There are a number of developments that have taken place including emergence of expatriate arrangements, performance management systems based on data (with the support of HR analytics and AI technologies), standardized compensation, and the rise of virtual global teams.In this work, the opportunities, as well as the obstacles of globalization, are also considered. Instead, it is possible to encourage innovation by connecting people from different backgrounds and their ideas, experiences and knowledge. But it can also introduce a load of complexity: cross-cultural challenges, different labour laws, trying to keep in balance work and life, to name a few. Plus, retaining staff can also be difficult in new markets where staff turnover may be a constant issue. The study in total brings the awareness to HR managers, that they should think outside the box, and that companies should build competencies within their companies and not just fixative, to sustain international operations.The results indicate that there must be a synergy between the business strategy and HR practices for SHRM transformation to be effective, while employee engagement, ethical leadership and lifelong learning must be emphasized.The companies that really capitalise on the organisation transformation brought by globalization are more flexible, innovative and better performing on the global marketplace. Overall, the change of SHRM in globalization is not only day to day business but more of a strategic need of an organization to thrive and prosper in the 21st century.