Report on challenges facing businesses

in general and Human Resources in

particular in the next 5 years

HR Trends Report 1
Executive Summary
The principle purpose of this report was to examine methodically and in detail what
do you believe are the main challenges facing businesses in general and Human
Resources in particular in the next 5 years? The specific objectives were to Identify
and explain any FIVE challenges or trends in Human Capital Management in the
next 5 years, explain the implications of these trends or challenges, give
recommendations as to what strategies can businesses adopt to cope with these
trends or challenges. The FIVE trends were identified in the human capital trends
and the trends in human resource management, especially between globalization,
attracting and retaining employees, technological advances, diversity and lastly
outsourcing. The report recommendations for globalization that Human Resource
Management may ask employees to attend training seminars to improve their
Information Technology skills for the use in global social media campaigns, or
customer service personnel may be sent to special language courses to further
enhance their abilities to communicate with customers who live abroad. These
professional development programs help to keep employees an experience of
motivation and feeling rewarded, and the new skills these employees learn are put to
direct use within the company. The recommendations for attracting and retaining
employees would be to show great leadership by having managers within the
company that inspires their employees, which will allow the company to become
known as a great place to work at. Great working environments, that support family
lifestyles in their times of need, implementing a great supportive system. Offering
opportunities to learn, travel and to be creative! A structured education, employee of
the month, monthly reward lunches, reward your team members and help them to
grow within your company.

HR Trends Report 2
Contents
Executive Summary ...................................................................................................................... 4
Contents .............................................................................................................................................. 5
Introduction ........................................................................................................................................ 6
The Trends in Context .................................................................................................................. 7
Globalisation................................................................................................................................. 7
Attracting & Retaining Employees ..................................................................................... 8
Technological Advancements .............................................................................................. 8
Diversity .......................................................................................................................................... 9
Outsourcing ............................................................................................................................... 10
Implications of the Trends ....................................................................................................... 11
Globalisation.............................................................................................................................. 11
Attracting & Retaining Employees .................................................................................. 11
Technological advancements ........................................................................................... 12
Diversity ....................................................................................................................................... 12
Outsourcing ............................................................................................................................... 13
Recommendations ...................................................................................................................... 14
Conclusion ...................................................................................................................................... 15
Bibliography.................................................................................................................................... 16

HR Trends Report 3
Introduction

Within our ever-developing nation, businesses and in general Human Resource (HR)
departments are facing multiple challenges that will occur within the upcoming five
years. These trends are a natural development of the environment of which our
organisations are within. Five dominating challenges among most organisations are:
Globalisation, Attracting and Retaining employees, Growth of technology………….
……. Within these five topics, the basis for the challenges potentially facing the HR
functions is covered.
In understanding the trends that will occur, it is vital that the implications of these
trends are also discussed. The implications will reduce any confusion and help
navigate organisations and HR through these upcoming challenges.
After the implications are thoroughly discussed recommendations about the five
challenges can be made to readers. These recommendations will involve strategies
for organisations to adopt to cope with such trends. These strategies will ensure that
the change can occur without resistance and with preparation.

It is vital that businesses and especially HR to be aware of what the future may
behold for them. This will ensure organisations with be better prepared and will help
ensure that there are not very many surprises to occur. As well as this, it will allow
the HR department to assist employees with ways to deal with upcoming issues and
it will allow employees within the business to be proactive

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The Trends in Context

Globalisation
Globalisation is a term used to define a process occurring in political, economic and
social areas, which becomes evident due to the dissolving separations between
economies nationwide, as well as borders and cultures. Significant demographic
changes as well as the changing of attitudes among employees drive this trend.
These changes are occurring as individuals are becoming more accepting of
overseas reassignments. Many nationalities are widely dispersed among all
organisations as a result from the Global Financial Crisis (GFC), as it resulted in
people needing to relocate to other countries, as there was better job opportunity.
(Hays, 2012) This allowance of hiring people from all over the world is particularly
attractive to the smaller businesses. This is due to the wider range of talent they can
acquire, as they may only be able to hire a small amount of people. (Chron, 2015)
As well as bringing a more diverse pool of applicants, globalisation brings new ideas
about benefits and compensations as they are mixing employees whom have worked
under different legislations around the world. This has already been a proven benefit
as businesses in Australia are now offering paternity leave, an idea that came from
the U.S. (Chron, 2015)
Developing countries have previously contributed 50percent of the worlds GDP, with
this number only expecting to rise to 55percent by the year 2018. (Deloitte,
2014)This indicates the importance of organisations to recognise this trend and
embrace it within their business. These statistics signify the importance of embracing
this diversity, and employees need to be prepared to work globally and take the
company global if required.

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Attracting & Retaining Employees
Attracting and retaining employees is a common growing trend that organisations
need to focus on. The comprehensive approach to attracting and retaining
employees are based upon the concepts of ‘employer of choice’ and ‘employer
engagement’. Being an employer of choice refers to the idea of the organisation
having a positive reputation, which would include a positive work environment and
support facilities for employees. These types of organisations also like to recognise
employees for their efforts as well as making available multiple paths of progression.
Furthermore, these organisations are found to have lower turnover rates and attract
considerably more amount of job applications than other organisations. Employee
engagement refers to the physical, cognitive and emotional involvement within their
work role, which would exceed satisfaction. (Kramar B. D., 2014)
Although this challenge is generally looked to as being one of the easier aspects to
get a grip on, it proves itself to be harder, especially on the HR department, than we
commonly think. There is a continuous struggle for companies to motivate
employees and to imprint a sense of passion and purpose to the employees. Many
organisations have too often found themselves in the predicament of wondering
whether it is worth the moving forward with extra time and resources spent on
making sure the employees feel valued when they could just leave the next day.
(Deloitte, 2014) This can also be view by high up personnel that don’t have much HR
experience as being silly, because if they don’t change employees too still remain at
their organisations. Other contributors to the concern of focusing on this issue are
the increase in longevity and health among our economy. Some businesses interpret
this occurrence to mean that a natural retention of employees will occur as they get
older and less ‘employable’ by other organisations, yet still being valuable to their
current residing organisation. This is recognised as a natural retention of employees,
requiring no active work needed from organisations to attract and retain their
employees.

Technological Advancements
With the constant growth of technology throughout the workplace, it is no wonder as
to why this trend is significantly important within the upcoming five years. Technology
advancements refer to the growth of all things electronic. This consistent growth
leaves businesses to play the catch up game, whilst struggling not to stay behind the

HR Trends Report 6
growth and to be in front of their competitors. Different countries within the world are
seen as more technologically advanced than others, and variable resources also
mean that some third world countries lack the technological ‘necessities’ that are
commonly unappreciated on a day-to-day basis. Most successful and large
organisations are multinational and are widespread throughout the world. Thus
leaving no room for technology lagging in different countries.
Technological advancements are also making it easier for the HR department to
screen new candidates as more than six in ten people worldwide use social networks
and forums. (Hays, 2012) In other aspects of the HR function, technological
advances prove to be a common challenge as it makes containing work place issues
and grievances even harder. It is commonplace for people to vent on social networks
and post negative experiences. These problems can then consume the job of the HR
department needing to ensure that the grievance/ issue is resolved and that the
organisation remains unaffected by the negative press.
Another issue that comes up in this challenge is the accessibility to working from
home for some employees. Over 50percent of people surveyed say that they would
not reject a job on the basis that it does not allow its workers to work from home.
(Hays, 2012) However, with new generations entering into the workforce whom are
perceived as lazier and more technologically able, it is only time before this statistic
dramatically changes in the next five years. Potentially the future could provide less
offices and money spent on rent, as employees will be able to work from home and
may be more productive at home.

Diversity

In the past Human Resource Management was considerably simpler because the
work force was the same or of a similar kind of nature. Today workers employed in
companies and organizations comprise of people of different gender, age, social
class sexual orientation, values, personality characteristics, ethnicity, religion,
education, language, physical appearance, marital status, lifestyle, beliefs, ideologies
and background characteristics such as geographic origin, tenure with the
organization, and economic status and the list is endless. This trend in Diversity is
critically linked to the organization’s strategic direction. Where diversity flourishes,
the potential benefits from better creativity and decision making and greater
innovation can be added to help increase the organization’s competitiveness. One

HR Trends Report 7
procedure of achieving that is through the organization’s benefits package. This
includes Human Resources Management offerings that fall under the heading of the
family friendly organization. A family friendly organization is one that has flexible
work schedules and provides such employee benefits such as child care etc. In
addition to the diversity brought by gender and nationality, Human Resources
Management must be aware of the age differences that exist in today’s work force.
Human Resources Management must teach people of different age groups to
effectively manage and to deal with each other and to respect the diversity of views
that each person offers. In situations like these a participative approach seems to be
a better way to work. (Current Trends in Human Resource Management, 2013)

Outsourcing
Outsourcing Human Resources Management responsibilities is not something new,
though it has become grown into a major component of many Human Resources
Management departments. The focus on outsources is a result of organizations
trying to focus manpower and financial resources. With global talent able to fulfill
many of the requirements of a Human Resources Management department,
employee costs and management are reduced often with an increase in
performance. Recent trends continue to have more outsourcing in more Human
Resources Management areas. Incentive plans, such as retirement savings plans
and defined benefits plans, are frequently outsourced. The amount of legal and tax
reporting and recording is immense when it comes to these plans. By outsourcing it
to brokerage firms or plan administrators that strictly do employee benefits plans, the
company can reduce the amount of time spent on recording. The fee paid to the
administrator is less than what it would cost to staff the position. This also limits the
liability exposure of the company, now further removed from fiduciary responsibility of
incentive plan assets. A Human Resources Management World whitepaper in 2005,
projected that outsourcing for defined contribution plans and benefit plans will
continue to increase. (HR Outsourcing Trends, 2015)

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Implications of the Trends

Globalisation
Globalisation has influenced HR management within both national and multinational
corporations due to the growth of International Labour conventions. By increased
informational trends HRM has been impacted the ways in which organisations and
businesses are required to function and conduct day-to-day management of
employees. This has been brought about via globalisation and though it is invariably
in place to eradicate the mis -treatment of workforces it has impacted the global
context and management practices of many workplaces and organisations. (Kramar
R. , The Challenges and Opportunities for Human Resource Management in a
Globalised World, 2013)

Attracting & Retaining Employees

The conclusions that can be drawn from this challenge is to focus on the
engagement of employees within the organisation and their retention as being of
long-term benefit to organisations. This is seen as an immerging challenge as one of
the top three concerns for respondents, who took place in Deloitte’s Human Capital
Trend survey, was ‘sustaining employee engagement/ morale’ at 47percent in
Australia and 39percent Globally. Overall this was ranked the second most-pressing
concern. (Deloitte, 2014) This trend will also be relevant in organisations worldwide,
for as long as people are being utilised as employees.
This trend forces organisations to recognise that employees are a large aspect of
their organisation, and their enthusiasm towards work can be the difference between
a successful business and an unsuccessful business.

Technological advancements
Technological advancements become inevitable in businesses as it is always going
to be an ongoing occurring trend. This trend has both negative and positive aspects.
One major implication of this trend is that organisations will never be ahead of the
trend and will always find themselves playing catch up. To ensure companies have a

HR Trends Report 9
smooth transition among the technological changes they need to start by being
aligned with the organisations core business objectives and issues. Using the social
media and mobile technologies, HR departments can expand their practices by
communicating more rapidly and effectively with employees.

Diversity

Equality and diversity policies link to the key functions of Human Resource
Management that is recruitment and selection procedures, training and development
policies, terms and conditions of employment. The need to mainstream human
resource issues within wider organizational strategy could provide a positive
justification for progressive equality policies. However, the potential benefits are often
not realized because of competing demands on managers, issues of inter-
professional competition, and the status of the human resource function. The
emphasis placed on highly committed, satisfied and motivated employees can
provide support for equality policies. However, potential benefits are often not
realized due to competing commitments which lessen the success of Human
Resource Management initiatives, and the individualistic nature of commitment
expected within Human Resource Management. Human Resource Management
policies, in their focus on the organizational level, often ignore the wider societal
systems and structures that perpetuate disadvantage. The primacy of the business
case within Human Resource Management means that there is often no wider social
justice concern attached to equality. The business case results in a short rather than
long agenda of equality/diversity. (RAHMAN, 2015)

Outsourcing

Many small businesses grow large enough at some point that the owner no longer
can handle the company’s hiring, training, firing and overall employee management
tasks. This requires hiring a Human Resources manager or using an outside
consulting firm. Understanding the implications of outsourcing your human resources
functions helps you make a more informed decision as to whether this choice is right
for your company’s needs. (Sam Ashe-Edmunds, 2015)

HR Trends Report 10
Recommendations

Trends as well as challenges come and go throughout the lifetime of the

organisation. Some are consistently relevant but they fluctuate with the importance of
them throughout the years. It is important that not only to organisations acknowledge
and understand these trends, but they also need to learn how they can cope with the
trends to ensure that their employees remain as relaxed as possible throughout
these transitions.
When dealing with the somewhat frustrating advancements of technologies
organisations need to determine how they are going to balance the key technologies
which will allow them to continue in their current competitive state. (Tamara J.
Erickson, 1990) This means that businesses need to disregard the technologies that
won’t necessarily be vital in their day-to-day functioning. They need to set their
strategic priorities and communicate these priorities clearly throughout the
organisation. Within this they need to align themselves with certain customers and
vendors outside of their organisation as these links and relationships can lead to
ensure they have sources of support i.e. Universities.
Organisations are now required to even more specifically emphasise the importance
of efficient and professional standards of their training given the increasing demand
for unified HR policies across international boundaries, as well the highly increased
potential for international interaction, it would be deemed inconceivably naive not to
increase training levels to facilitate growth. Doing so not only better prepares an
organisation and its employees for the impacts of globalisation but it also provides a
solid framework from which a company can seek to gain a competitive edge in the
market through its increased knowledge of local and international relations due to its
improved training methods. (Chron, 2015)

Diversity
Widen Your Recruiting Base
If you restrict your recruiting to your immediate geographic area, you may be missing
an opportunity to develop a diverse workforce. Use other recruiting vehicles to

HR Trends Report 11
expand your base, including online job boards, which anyone with Internet access
can view. Also, advertise your openings in publications that appeal to minorities.

Make Use of Current Staff

Use existing members of your staff to help recruit employees. For example, if you
already have quality employees who are minorities, let them know about job
openings to see if they know others who may be qualified or interested. This helps to
create a flow of diverse candidates, and can also reduce your recruiting expenses.
(Chris Joseph, 2105)

Outsourcing
Cost Savings

Outsourcing helps reduce the cost of maintaining nonrevenue-generating back-office

expenses. A fully functional human resources department requires additional office
space and highly trained and experienced HR staff. Many small businesses find it
more cost-effective to outsource HR functions rather than expand to a larger location
to meet the space needs of another department. Furthermore, outsourcing costs are
variable and can be reduced when business needs warrant.

Efficiency

Maintaining an efficient and productive workplace is critical. Outsourcing HR

functions create greater efficiency within human resources systems. Advanced
human resources technology utilized by outsourcing providers help streamline
important HR functions, such as payroll, benefit administration and compliance
management. Outsourcing helps employers and managers spend less time doing
paperwork and more time dedicated to improving the efficiency and effectiveness of
the workforce. (Sherrie Scott, 2015)

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Conclusion
The maximum amount that something can contain to face the challenges of
globalization, Attracting & Retaining Employees, Technological Advancements,
Diversity and Outsourcing of business towards the 21st century depends heavily and
solely on the Human Resources Management. Companies and organizations have
the capital and resources, technology and Human Resources; but the Human
Resource Management is the only formal systems devised for the management who
can help face the challenges of business globalization etc. Wealth in the form of
money or other assets can be generated, so can technology, and other services, but
Human Resources Management is needed to propel the organization and the
company through the coming challenges with encouragement and
motivation. Human Resource managers should establish or indicate and succeed in
dealing with the barriers that have held back the employment, development,
promotion etc. of different types of groups within the places of employment.

Bibliography

Chris Joseph, D. M. (2105). Recommendations on Improving Diversity in the

Workplace. Recommendations on Improving Diversity in the Workplace.
Retrieved from http://smallbusiness.chron.com/recommendations-
improving-diversity-workplace-1810.html
Chron. (2015). HR Trends - Globalisation. Retrieved November 2015, from Small
Business: http://smallbusiness.chron.com/hr-trends-globalization-
62045.html

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Current Trends in Human Resource Management. (2013). Human Resource
Management. Retrieved from http://www.hrwale.com/general-
hr/current-trends-in-human-resource-management/
Deloitte. (2013). Resetting Horizons:Human Capital Trends. Deloitte Touche
Tohmatsu Limited .
Deloitte. (2014). Global Human Captial Trends 2014: Engaging the 21st-century
workforce. Deloitte University Press.
Hays. (2012). Tomorrow's Workforce. Melbourne.
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http://smallbusiness.chron.com/hr-outsourcing-trends-1294.html
Kramar, B. D. (2014). Human Resource Management: strategy, people,
performance. North Ryde: McGraw Hill Education.
Kramar, R. (2012). Trends in Australian human resource management: what
next? . Asia Pacific Journal of Human Resources, 18.
Kramar, R. (2013). The Challenges and Opportunities for Human Resource
Management in a Globalised World. Retrieved 2014, from European
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RAHMAN, H. (2015). EFFECTS OF WORKFORCE DIVERSITY ON HUMAN
RESOURCE MANAGEMENT A THEORETICAL PERSPECTIVE. EFFECTS OF
WORKFORCE DIVERSITY ON HUMAN RESOURCE MANAGEMENT A
THEORETICAL PERSPECTIVE. Retrieved from
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CTIVE_BY_HASEBUR_RAHMAN
Sam Ashe-Edmunds, D. M. (2015). HR Outsourcing Implications. HR Outsourcing
Implications. Retrieved from http://smallbusiness.chron.com/hr-
outsourcing-implications-67543.html
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Tamara J. Erickson, J. F. (1990, April 15). Managing Technology as a Business
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business-strategy/

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