Five Major Challenges For Global HR Leaders In 2012.


Europe is heading for recession. China is battling its own economic challenges, and we in the United States are hardly in a position to help; yet we just did.  Are we near a tipping point, or as some evidence shows could already be past that point and, what are the implications for Human Resources leaders?

Recently. the Conference Board warned world economic growth will remain below its potential for many years to come. Growth is likely to slow to just 3.2% next year, then pick up slightly for a few years, before falling to just 2.7% per year between 2017 and 2025. Even China and India, which have recently enjoyed rapid economic growth, are worried.  A few weeks ago, European leaders agreed to boost the lending power of the region’s bailout fund. But that’s done little to boost confidence. Since then, Italy’s borrowing costs have surged and Greece’s debt crisis has remained in the spotlight, forcing prime ministers of both countries to agree to resign from their positions down the road.

Meanwhile, we are struggling to recover from our own financial meltdown three years ago. While company earnings have bounced back, Americans are seeing little relief amid 9% unemployment and a still-slumped housing market. Though most economists are not predicting another recession for the United States, not enough is known about American exposure to Europe’s debt crisis.

So what are 5 HR issues for global companies in 2012 that you might not have thought of?

  • Companies will continue to become larger with greater global footprints. The importance of globalization and successfully integrating markets across boarders will be of critical importance.  Underpinning this will be a natural conflict of allegiances pitting nationalism versus corporate success.  What role will HR play in helping businesses balance national interests that me be in conflict with corporate goals?  Like never before HR needs to be aware of changing political dynamics and landscapes.  Will employees put country before company, and if so, what is your plan?
  • What functions within organizations will become increasingly critical, and how will those responsible identify, and secure the appropriate talent?  As currency fluctuations increase in frequency and volatility, will your CFO’s be equipped with the optimal internal tax and treasury talent required to navigate and leverage exchanges? Are you prepared to deliver to them a contingency staffing plan that supports the elimination of the Euro, and the introduction of independent currencies from across the European Union?  That’s just the finance function.
  • We’re living in an increasingly border-less world in which talent management could take on a different meaning.  Finding and retaining quality talent will continue to be essential to business sustainability, and most industries and countries will experience a widening talent gap for highly skilled jobs and the next generation of mid and senior leaders.   Are you working with the state department and immigration attorneys here and abroad to ensure you are leveraging the right resources to both push and pull international talent?  Are you doing the same with executive search firms, and keeping a close eye on competitor’s activities?  Who is applying for access and permits, and why and where?  HR must become more externally focused and curious, providing insightful strategic information that can be applied quickly and effectively.
  • To survive large European and domestic unions need to evolve. There are two types of european councils, those centered on global companies; transnational works councils, and those centered upon industries; Global Union Federations or (GUFs).   European works council arrangements have not proven to be as powerful or effective as a means of driving wage equity across borders. There’s been no wage bargaining transnationally, even with the common currency of the Euro, although some have been able to bargain successfully for non-wage related benefits.  Whether transnational or GUF, the IFAs’ or International Framework Agreements between the unions and employers are unenforceable, and lack systems for bargaining, arbitration, mediation, etc.  Labor leaders realize that prior to the well running dry in Europe; employers disregarded the multi-national mandates set forth by the EU.  If they do not secure a new generation of dues paying members; they’ll die.  Unions are aggressively pushing the right to organize, gain recognition and, or win accretion in the U.S. by leveraging foreign unions, employers, and political structures against global employers doing business in the U.S.  Further, they will salt their way into the millennial culture, and ultimately their employers.  Germany’s IG Metall, the world’s most powerful union, has established an organizing department partnered with Change to Win’s that has targeted wind-turbine manufacturers and auto dealers here and abroad.
  • An increased demand for HR metrics may bring about a widely accepted set of analytic measures and methods or global standards to describe, predict and evaluate the quality and impact of HR practices and the productivity of the work force.  However, globalization is also a driving impetus toward the use of more metrics with greater cultural sensitivity.  So how will you blend and balance a need for widely accepted analytic HR metrics for the purpose of consistent communications and micro metrics that align in a more intimate, and cultural fashion?

Those are but five HR issues that may vex organizations as the world becomes a more ambiguous place in 2012.  It will be imperative that HR leaders ramp up their level of curiosity, and immerse their thought in truly understanding the multitude of cultures in which they do business.

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Posted on December 1, 2011, in Economy & HR, HR Management & Leadership. and tagged , , , , , , . Bookmark the permalink. 1 Comment.

  1. Dorrina Martini

    I am currently enrolled in the HRM Bachelor’s program. I found this article to be very interesting and informative. Funny how top foreign countries are now facing recessive factors like the United States. These countries cannot depend on the United States anytime soon. Their bailout is contingent on their own strategies, and this should be the case. Too many times the United States has taken a recessive countries problems and bailed these countries out. This never has happened for the United States.

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