Challenges of HRM in Indian Economy

The job of HRM department in India has never been so challenging. Last decade has witnessed tectonic shift in Job market. From being an employer’s market, it has suddenly turned into employee’s market, especially in the most crucial segment, ie middle management. Globalization and India’s growing stature in the world has seen demand for Indian managers soaring. From the state of plenty, there is a stage of scarcity of the right talent. The biggest challenge is to retain the talent one has so assiduously hunted and trained. The attrition rate has reached alarming proportions. It has reached such proportions that certain segments of Industry are maintaining bench strengths to fill in the sudden gaps due to resignations. In addition, there are following new issues:

1. Globalization

Growing internationalization of business and workforce has its impact on HRM in terms of problems of unfamiliar laws, languages, practices, attitudes, management styles, work ethics and more. HR managers have a challenge to deal with more and more heterogeneous functions and more involvement in employee’s personal life.

2. Corporate Re-organizations

Liberalization has led to large scale reorganization of businesses in terms of expansions, mergers and acquisitions, joint ventures, take overs, and internal restructuring of organizations. In circumstances as dynamic and as uncertain as these, it is a challenge to manage employees’ anxiety, uncertainties, insecurities and fears.

3. New Organizational Forms

Exposure to international business and practices has led to change in the organizational structure and HR policies of the local companies. Take for instance, the hierarchical structure of Indian companies. Suddenly, Indian companies have begun to adopt flat hierarchical management structure. But to implement and grout such fundamental changes in management philosophy of any company is never easy. The challenge for HRM is to cope with the implications of these new relations in place of well-established hierarchical relationships that existed within the organizations for ages in the past.

4. Changing Demographics of Workforce

Changes in workforce are largely reflected by dual career couples, large chunk of young blood with contrasting ethos of work among old superannuating employees, growing number of women in workforce, working mothers, more educated and aware workers etc… Thus, changing demography of workforce has its own implications for HR managers and a true challenge to handle.

5. Changed Employee Expectations

With the changes in workforce demographics, employee expectations and attitudes have also transformed. Traditional allurements like job security, house, and remunerations are not much attractive today. Rather, employees are demanding empowerment and equality with management. Hence, it is a challenge for HRM to redesign the profile of workers, and discover new methods of hiring, training, remunerating and motivating employees.

6. New Industrial Relations Approach

In the changed industrial climate, even trade unions have realized that strikes and militancy have lost their relevance and not many workers are willing to join them and disrupt work. However, the problems faced by workforce now have different dimension for the management. They manifest in the form of increased attrition rate. Unsatisfied employees instead of approaching the management for resolution, often take up the new job. The challenge before the HRM is find ways and means to feel the pulse of employees and address the issues on proactive basis.

7. Renewed People Focus

“Man behind the machine is most important than the machine”. This is an old doctrine of the Armed Forces. However, this doctrine has begun to gain acceptance in the corporate world and thus all out efforts to grab the best talent at whatever cost.

8. Managing the Managers

Managing the managers is most difficult. Armed with inside information, they cannot be lured with rosy promises. They are in great demand too with growth in economy. These are the people who are most mobile, attrition rate being highest for the junior and middle management level. The challenge of HRM is how to manage this tribe?

9. Weaker Section’s Interests

Another challenge for HRM is to protect the interest of weaker sections of society. The dramatic increase of women workers, minorities and other backward communities in the workforce, coupled with weakening of trade unions, has resulted in the need for organizations to re-examine their policies, practices and values. In the name of global competition, productivity and quality, the interests of the society around should not be sacrificed. It is a challenge of today’s HR managers to see that these weaker sections are neither denied their rightful jobs nor are discriminated while in service.

10. Contribution to the Success of Organizations:

The biggest challenge to an HR manager is to make all employees contribute to the success of the organization in an ethical and socially responsible way. Because society’s wellbeing to a large extent depends on its organizations


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