Chapter 2:

Human Resource Environment

 Topics Covered
1. Trends in Business Environment
1.1 Globalization
1.2 Mergers and Acquisitions
1.3 Downsizing
2. Changing nature of work
2.1 Industry and Occupational Shifts
2.2 Technological advancements
2.3 Outsourcing
2.4 Flexible work
3. Demographic, Societal and Workforce Trends
3.1 Workforce Diversity
3.2 Ageing Population and workforce
3.3 Workforce of Knowledge workers
3.4 Women in workforce
3.5 Changing family structures
3.6 Global workforce
3.7 Workforce Flexibility
4. Changing nature of employment relationship
5. Changing roles of HR Manager in Knowledge Economy
 1. Business Environment and HR Challenges

• 1.1 Globalization
 1. Business Environment and HR Challenges
1.1 Globalization
• The process by which businesses or other organizations develop international
influence or start operating on an international scale.
• When a business expands its operation into other countries, the impact of
globalization on human resource development and management is significant
• Pepsi, Coca Cola, KFC, McDonald’s
HR CHALLENGES
• HR department will need to increase support of its current staff, as they transfer
overseas to new positions.
• Assistance with visas, work permits, and housing is required, as well as training in
cultural issues and perhaps language acquisition.
• Managing a global workforce
• Ensuring availability of employee who have the skills for global assignments
• Focusing increasingly on employee productivity to ensure competitiveness
• Ensuring legal compliance when conducting business abroad
 1. Business Environment and HR Challenges

• 1.2 Mergers and Acquisitions

 1.2 Mergers and Acquisitions
• A merger occurs when two separate entities combine forces to
create a new, joint organization.

• An acquisition refers to the takeover of one entity by another.

• Examples: Vodafone-Idea Merger

Lipton India and Brooke Bond Merger
Ola acquired Foodpanda
Flipkart acquired Myntra
Walmart acquired Flipkart
Facebook acquired Whatsapp
HR CHALLENGES
• Managing employee insecurity during mergers
• Ensuring continued employee productivity
• Developing HR initiatives to manage employee morale
 1. Business Environment and HR Challenges

• 1.3 Downsizing
 1.3 Downsizing

• Downsizing is a reduction in organizational size and operating costs implemented

by management in order to improve organizational efficiency, productivity, and/or
the competitiveness of the organization.
• Examples:
• A hospitality start-up Treebo laid off 120 employees in july 2019
• Nissan Motor Co is intending to fire 12,500 employees globally of which 1,700
would be in India (July 2019)
• President of India’s auto components association is warning that a fifth of the
country’s 5-million-workforce in the auto parts industry could lose their jobs if the
slowdown persisted. (August 2019)
• IBM laid off 60000 workers in 1993, Citigroup laidoff 50000 workers in 2008,

HR Challenges
• Managing organizational relationship with survivors
• Managing morale and commitment of survivors
• Providing outplacement services or relocation for employees who lose jobs
• Providing personal and family counseling to employees who lose their jobs
Environment
Latest News Articles worth reading
al trends
• https://www.theguardian.com/uk/2000/nov/19/jasonburke.th
Globalization
eobserver

• https://www.moneycontrol.com/news/business/companies/to
p-7-ma-deals-in-india-who-joined-hands-with-whom-and-for-
how-much-2538437.html
Mergers and • http://blog.careerminds.com/blog/hr-challenges-mergers-
Acquisitions acquisitions
• https://economictimes.indiatimes.com/news/company/corpor
ate-trends/from-hr-issues-to-cultural-integration-the-reasons-
behind-ma-failures/articleshow/53387584.cms

• https://www.indiatimes.com/news/india/these-10-it-and-
Downsizing telecom-companies-are-preparing-for-massive-layoffs-you-ve-
been-warned-321277.html
Identify the trend related to business environment
hinted in the following cases. What HR issues are
related to each one of them?
a) Child labour scandal hits Adidas: Brutality, poor wages and
15-hour days in the Asian sweatshops
b) India's premier e-commerce startup Flipkart acquired its
fashion-focused rival Myntra in May 2014
c) A recent CFO magazine survey of senior executives showed
44% planned to hire an employee in a country where they
do not have any employees currently.
d) Cognizant appears set to cut at least 6,000 jobs, which
represents 2.3% of its total workforce, as the IT MNC
struggles with growth in an IT environment that is fast
shifting towards new digital services.
 2. Changing nature of work and HR Challenges
Environmental HR Challenges
trends
Industry and • Managing workforce with flexible working
Occupational Shifts patterns
• Focusing on competencies during hiring
process
• Designing incentive-based compensation
• Developing proactive employee development
programs
 Technological • Managing a virtual workforce
Advancements • Managing employee alienation
• Developing training modules and
conducting programs to provide
employees with required skills
• Retraining current employees to manage
obsolescence
• Providing work-life balance initiatives
• Fire Engine RED : “By not spending money on office space,” Director
of Communications Chuck Vadun explains, “we’re able to invest more
in serving our clients better.”
• Buffer : Collaborative spirit of working remotely is fostered by “Buffer
Bootcamp,” a 45-day probationary period that allows potential new
hires to see if remote working, as well Buffer’s overall culture, suits
them.
• https://scopicsoftware.com/blog/about-scopic/how-virtual-
companies-work/
 Outsourcing • Managing employee concerns about losing
jobs due to outsourcing
• Managing employee morale and productivity

• Outsourcing is the practice of passing individual tasks, subareas, or

business processes over to a third-party and thereby receiving the
results from outside of your own company.
• Services that your company was responsible for fulfilling will now
be provided by a specialized service provider. These tasks are
often a business’s secondary functions: tasks that must be fulfilled
in order for a company to focus on its central activity.
• For Alibaba, the founder Jack Ma outsourced the website
development to a U.S. firm in the initial days
• Google outsourced phone and email support for AdWords to
around 1000 reps.
Flexible Work • Managing the loss of organizational control over
Arrangements work
• Developing programs for motivating the flexible
workforce
• Developing ways of ensuring commitment of the
flexible workforce to the firm

Flexible Work Arrangements can include:

1.flexibility in the scheduling of hours worked, such as alternative
work schedules (e.g., flex time and compressed workweeks), and
arrangements regarding shift and break schedules;
2.flexibility in the amount of hours worked, such as part time work
and job shares; and
3.flexibility in the place of work, such as working at home or at a
satellite location
Environmen Some related articles
tal trends
Industry and • https://www.ukessays.com/essays/management/challenges-facing-
Occupational hrm-in-service-sector-management-essay.php
Shifts

Technological • https://www.shrm.org/hr-today/news/hr-
Advancements magazine/pages/0602joinson.aspx

Outsourcing • https://www.business.com/articles/5-challenges-to-outsourcing-hr-
and-how-to-overcome-them/

Flexible Work • http://www.humanresourcesonline.net/the-futurist-capitalising-on-an-

Arrangements inclusive-workplace/
• https://www.forbes.com/sites/forbeshumanresourcescouncil/2018/07/
12/working-parents-and-workplace-flexibility-a-hand-in-hand-
approach/#6132951e646b
 3. Demographic, Societal and Workforce Trends
and HR Challenges (1)
Environmental HR Challenges
trends
Workforce Diversity
Workforce • Devising customized HR strategies for hiring, retaining, and
Composition (More motivating employees belonging to different generations
details in next slide) • Developing lifestyle-driven perks for the new generation
employees
• Developing work-life balance programs
Workforce • Ensuring the availability of skilled talent to fulfill
Availability organizational needs
Ageing Population • Finding replacements for retirees
and workforce • Managing the demand-supply gap for qualified managerial
talent due to a large retiring workforce
• Developing mentoring programs to ensure the skills of
experienced managers are passed on to new managers
• Obsolescence training and retraining of older employees
• Managing retirement policies
• Conducting programs to retain experienced employees
Workforce Composition: 3 generations

Baby
Gen X Gen Y
Boomers
 Baby Boomers:
Born between 1946 and 1964
• Work-Centric
• Extremely hardworking and
motivated by position, perks, and
prestige.
• Relish long work weeks and define
themselves by their professional
accomplishments
• May criticize younger generations
for a lack of work ethic and
commitment to the workplace
Gen X (Baby Bust): Born
between 1965 and 1979
Values Work/Life
Balance.
Works to live rather
than lives to work.
As of 2010, their
assets were statistically
double their debts
Gen Xers appreciate
the fun in
the workplace and
espouse a work
hard/play hard
mentality.
 Gen Y (Net Gen/Millenials):
Born in or after 1980
• Makes up the fastest growing
segment of the workforce
• Achievement-Oriented
• Team-Oriented
• Craves for attention
• Prone to Job-Hopping
Problems arising from workforce diversity
• List any three different types of diversity you
have encountered.
• Do you agree that we all have a personal bias
with respect to caste, color, state, language,
religion?
• How can we minimize the personal bias?
• What can an HR dept do to manage diversity?
Go through the scenarios and mention
how the following scenarios make you
view workplace diversity as.
1. After interviewing a few aspirants to fill a direct
support position, one HR remarked in front of
his colleague, “Let’s go for this guy; Asians are
hard workers and really practical.”
2. Beth is a manager at an old people’s home. She
manages a multi-cultural staff. Beth believes that the
best way in which she can respect all her staff
members is by treating them as same. Her logic was
that this would minimize the potential conflicts
between the staff members. However, she could sense
some tension and friction in the mind of one of the
staff member, Shamaa.

When asked, Shamaa told that, her culture prohibits

men and women to interact closely, however Beth has
assigned her the responsibility of assisting some male
residents with their personal hygiene.
3. The company that Issac works for hosts a
Christmas Party every year. Joseph expressed his
concern to his supervisor that there are staff
members like him who don’t celebrate Christmas.
His supervisor told Issac that, he is being overly
sensitive and the celebration isn’t religious is
nature. Having said that, the supervisor did
change the name of the event from “Annual
Christmas Party” to “Annual Holiday Party”, but
everything else has remained the same, including
the Santa Claus.
 3. Demographic, Societal and Workforce Trends
and HR Challenges (2)
Environmental HR Challenges
trends
Workforce of • Ensuring the continued supply of trained manpower
educated • Training new hires
knowledge workers • Partnering with universities and developing academic
initiatives to meet projected shortage of skilled manpower
• Training employees in computer skills, communication skills
and customer handling skills
• Emphasizing re-training and development activities

Women in • Strategizing to attract and retain educated and skilled

workforce women workers
• Conducting programs for women who opt for career breaks
• Providing facilities such as crèches, flexible working hours
etc.

Changing family • Developing work-life balance programs

structures
 3. Demographic, Societal and Workforce Trends
and HR Challenges (3)
Environmental HR Challenges
trends
Global • Developing diversity training programs
Workforce • Developing HR initiatives directed to workforce
diversity
• Identifying and training expatriate managers for
overseas assignments
• Developing equitable pay plans for individuals
working in different countries
Contingent • Developing systems to motivate the temporary
Workforce/Work workforce and elicit commitment from them
force Flexibility • Helping temporary employees to quickly adapt to
the organization to reach their full potential
 3. Demographic, Societal and Workforce Trends and HR Challenges
Environmental Some related articles
trends

Workforce Diversity • https://www.peoplematters.in/blog/diversity/success-

mantra-for-a-diversity-and-inclusion-strategy-18867

Ageing Population • https://www.theguardian.com/business/2018/jul/28/olde

and workforce r-workers-retirement-age-economic-growth-wages

Workforce of • https://timesofindia.indiatimes.com/home/education/ne
educated knowledge ws/engineering-students-are-not-employable-says-
workers dharmendra-pradhan/articleshow/65292627.cms

Women in • https://www.firstpost.com/india/indias-female-workforce-
workforce participation-stands-at-24-motherhood-gender-inequality-
in-household-work-to-blame-4892161.html
 4. Changing nature of employment relationship
and HR Challenges
Environmental HR Challenges
trends
Changing nature • Offering challenging jobs to employees
of employment • Managing rewards for enhancing employee
relationship performance
• Providing opportunities for enhancing skills
through training, development, and educational
programs
• Developing programs for employee commitment
• Understanding value differences across different
employee groups and customizing HR programs
 5. Changing roles of HR Manager in
Knowledge Economy

• Administrative Expert (traditional role)

• Operational Role (traditional role)
• Employee Champion (new role)
• Partner in Business Strategy (knowledge
economy)
• Change Agent (M&As)
• Customer Orientation (employee as internal
customer)