HRM CHALLENGES

- EXTERNAL
- ORGANIZATIONAL
- PROFESSIONAL
The world is changing at a faster rate because change is constant from several centuries. So the
management of the organizations should be quickly adaptive to the changing requirement of the
environment otherwise they become obsolete from the market. The human resource management of
an organization plays a basic role in response to the environmental change. The HR department
should adopt such policies that can avail the new opportunities of the environment & keep the
organization away from the newly emerging threats.
EXTERNAL / ENVIRONMENTAL CHALLENGES

The environmental challenges are related to the external forces that exist in the outside environment
of an organization & can influence the performance of the management of the organization. These
external forces are almost out of control of the management of the organization. These can be
regarded as threats to management & should be handled in a proactive manner.
External challenging factors can be broadly categorized as the Workforce Diversity, Technological,
Economic, Government, Political and Legal environments. While these external influences are
often outside the control of HRM, they often require action from HRM to address their effects on the
organization and its goals.
WORKFORCE DIVERSITY
The changing environment provides both the opportunities & threats to the human resource
management of the organization. The HR manager should adopt such policies that can make possible
the diverse work force of employees. Although on one hand diversity creates big problem but in the
long run, the survival & performance of the organization is flourished.
• Cultural and attitudinal diversity
• Diversity through Immigration and migration
• Diversity and professional place
Social & Cultural Environment
The social and cultural environment in which a business operates will have an important influence
on human resource management (HRM). The cultural and social environment includes such things
as work ethic, attitude towards work and employee motivations. For example, monetary rewards
may be valued highly in some cultures, while a greater work-life balance is valued in other
cultures. HRM must assess these cultural factors and match motivators accordingly. If money is
king, direct financial compensation in the form of high wages may suffice. However, if work-life
balance is more important, a generous vacation and paid leave package may be more motivating.

A society's social and ethical views of the role of business in society will also influence how HRM
operates. For example, once upon a time, child labor was not considered unethical. Now, not only
is it considered unethical, but it's also illegal.
TECHNOLOGY
The technology is also growing with great speed especially in the field of computer &
telecommunication. New methods are emerging that quickly dominates the older ones & makes
them obsolete. Therefore the skills required by the employees also changes with the changing
technology & this would compels the worker to advance the skills three to four times throughout
their working lives. So there comes a burden on the HR department to constantly update the skills
& expertise of their employees.
Technology also can present opportunities and challenges for human resource management
professionals. New technologies may require HRM professionals, to hire new employees
competent in the new technologies. Current employees may need to be retrained or released if their
skills are no longer relevant to organizational needs. Even something as simple as a new version of
a word processing program or a new digital copier may require HR-sponsored training.
ECONOMIC
One of the biggest external influences is the shape of the current economy. Not only does it affect the
talent pool, but it might affect your ability to hire anyone at all. One of the biggest ways to prepare
against economic conditions is to not only know what’s happening in the world around you, but also
create a plan for when there is an economic downturn. All companies can make due in a bad economy
if they have a rainy day fund or plan to combat the harsh environment.
GOVERNMENT REGULATIONS
With the introduction of new workplace compliance standards your human resources department is
constantly under pressure to stay within the law. These types of regulations influence every process
of the HR department, including hiring, training, compensation, termination, and much more.
Without adhering to such regulations a company can be fined extensively which if it was bad
enough could cause the company to shut down.
POLITICAL AND LEGAL ENVIRONMENT

The political-legal environment covers the impact of political institutions on the HRM department. All
activities of HRM are in one way or the other affected by these factors. To be specific, HR planning,
recruitment and selection, placement, training, remuneration, employee relations and terminations are
governed by the constitutional provisions. The HRM cannot manage the personnel unilaterally because
it has to abide by the rules and regulations imposed by the Government from time to time. HR managers
have to be aware about the legislations enacted by the governments at the center and the states.
The important legislations affecting HRM are: Factories Act, Trade Unions Act, The Payment of
Wages Act, The Minimum Wages Act, Employees State Insurance Act, Workmen’ Compensation Act,
The Payment of Bonus Act, The Payment of Gratuity Act, The Maternity Benefit Act, The Apprentice
Act, Industrial Employment (Standing Orders) Act, etc.
 ORGANIZATIONAL CHALLENGES

The organizational challenges for the HRM are related to the factors that are located inside the
organization. Although these challenges are evolved as a byproduct of the environmental
challenges but these can be control by the management of the organization to much extent. The
proactive HR managers take notice of such challenges in advance and take corrective measures
before these would convert into serious issues. The human resource management challenges within
the organization include competitive position & flexibility, organizational restructuring & issues of
downsizing, the exercise of self managed teams, development of suitable organizational culture,
Union, Information system, Organizational culture and Conflicts etc.
Dealing with Trade Union:
Union members are to be handled skillfully as they are usually the people who oppose the company policies
and procedures. Demands of the union and interests of the management should be matched properly.

Organizational Restructuring & Issues of Downsizing

Regardless of the impetus for change, downsizing must be undertaken with precision to prevent negative
impacts to operations and employee morale.
• Communication. Formal and informal communication networks are disrupted by company downsizing
activities
• Skill and Knowledge Loss.
• Employee Stress
• Negative Corporate Image
Change Management
Since this is generally not a focal point for HR professional training and development, change
management represents a particular challenge for personnel management. The WFPMA finds that
“This may also be the reason why it is cited as the foremost issue as HR continues to attempt to
help businesses move forward. An intensified focus on training may be needed to develop added
competencies to deal with change management.”
Leadership Development
As the second of the biggest challenges for human resource management, leadership development
needs to be a critical strategic initiative. HR professionals are faced with being expected to provide
the essential structures, processes, tools, and points of view to make the best selection and develop
the future leaders of the organization. The WFPMA reports that, “Across the globe leadership
development has been identified as a critical strategic initiative in ensuring that the right employees
are retained, that the culture of the organization supports performance from within to gain market
position, and that managers are equipped to take on leadership roles of the future so that the
organization is viable in the long term.”
 PERSONAL CHALLENGES

The decisions related to the specific individual employees are included in the individual challenges
for the HRM. The organizational issues are also affected by the fact that how employees are treated
within the organizations. The problems related to the individual level are as follow.

Attracting top talent

Attracting and retaining the best talent takes discernment, time, and a whole lot of work. That’s
why this human resource challenge features so high up on the list. To attract the right individuals,
you need to know the requirements of the job and the organization. But as job roles and
expectations keep changing, and organizational culture keeps adapting, this task becomes
increasingly difficult.
Balance Between Management and Employees:
The human resource manager has a responsibility to balance the interest of management and employ­
ees. Profits, commitment, cooperation, loyalty, and sincerely are the factors expected by management,
whereas better salaries and wages, safety and security, healthy working conditions, career
development, and participative working are the factors expected by employees from management.
Productivity
Productivity is defined as the measure of the value that an employee can add to the final product or
service of the organization. The increased output per employee is reflected as increased productivity.
Ability & motivation are two important factors that affect the employee productivity. The ability of
the employee can be improved by the hiring & replacement along with the proper training & career
development. On the other high quality of work life serves as accelerator to the motivational factor of
the employees.
Empowerment
In the modern days many organizations make changes in such a way that their individual employees exert
more control on their work as compared to their superiors. This individual control of employees is called
empowerment which helps the employees to work with enthusiasm, commitment & learn new skills because
they are more make normal decisions about their work by themselves & hence enjoy their work.

Brain Drain
One of the challenges for HRM is the detachment of the key potential employees from the organization which
link with the competitors for higher remunerations etc. In such cases the organization loses its intellectual
property & in many situations the leaving employees at the higher levels also take with them the potential
lower level employees. This brain drainage is becoming serious issue in the high-Tec companies.
Ethics & Social Responsibility
Under this challenge, the organizations make an effort to benefit some portion of the society. This is now
considered to the social responsibility of the organization to show favorable behavior towards the society. The
ethics serves as the basic principle for the socially behavior of the organizations. Within organizations, the HR
departments develop a code of conduct & principles of code of ethics that serve as the guidance for the
personal behavior of the employees of the organizations. The employees also expect from the management to
show favorable decisions.
Job Insecurity
In the recent years, restructuring & downsizing develops the sense of insecurity of job within the employees
of the organizations. Now many employees only desire to get a steady job rather than a job with promotional
future. Even most successful organizations lay off its employees in the period of cut throat competition. The
stock market also shows favorable results when layoffs has been made. All these things create a fear among
employees about the insecurity of their jobs which would hinder their effective performance.
Matching People & Organizations
It has been proved from the research that the HR department contributes to the profitability of the
organization when it makes such policies of employee selection in which those employees are
selected & retained that best suits the culture of the organization & its objectives. For example it is
proved from research that those employees would become beneficial for the high-Tech companies
that can work in risky, uncertain environment having low pay. In short it is an important challenge
for the HR department to hire and keep such employees whose abilities & strengths would match
the requirements & circumstances of the organization.