Contemporary Issues in HRM: A Critical Analysis of Current Practices


This essay discusses the key contemporary issues in HRM that need to be addressed by companies to succeed in today's business world. Human resource managers face countless challenges in day today workforce. There are many issues concerning the diversified workforce, legislation which affects the workplace environment and technology which matters to the rise of the challenges. The function of HRM is on the threshold of a major change in its evolution. From early days of Personnel Management in the industrial age are responsible for Industrial Relations, statutory compliances and wage administration, which evolved into HR in the knowledge of economy. This was the reason due to rise in Services economy in which the customers contact skills became most important. The focus which shifted to talent development and engagement of employees for higher productivity. Hiring, engaging, retaining and providing the career path became business critical for the companies to succeed. As things changed today, the function needs to be reinvent itself to face or address the following issues like: Striking a balance of fixed and contract employees based on specialized skills and flexible scaling option for the business; Hiring top quality talents in numbers; Getting present day leadership to follow the leadership style more conducive way to the millennial workforce, Higher level of analytics to make the talents, pay and compensation decisions can be more scientific. Also allow experimentation and innovation based on analytics to explore new initiatives, etc.

Contemporary business workforce brings many new challenges which affecting many aspects of management including the one of its crucial facets of Human Resource Management. The most frequent state of challenges of modern HRM are: globalization; the economic and legal environment; workforce diversity resulting from both the globalization and demographic changes; technological development; changes which was made in educational background of employees and in their expectations regarding their working conditions. These factors are directly and indirectly determines human resource management strategies and the possibility of their implementation.

Contemporary challenges of HRM

In today’s competitive market there are many changes occurring day by day. To cope in this market, human resource management must need to play a strategic role to sustain in this market and to achieve the organizational goals. Effective Human resource management which enables employees to contribute effectively and productively to the overall company direction and the accomplishment of the organization's goals and objectives. The main challenge of the organization is to improve its effectiveness and efficiency in an ethical and socially responsible way. Other challenges arises from the environment where the organizations operate; changing demands of the workers, international and domestic competitors, pressure groups, professional ethics; etc. With the ongoing changes in Human Resources Management, it’s important that managers; executives and HR employees to be aware of the challenges faced by the today’s HRM team. Generally the challenges faced by the HRM team are:

Work force Diversity:

Employees want a balance between the work life and family life. The traditional employees are wanted to earn more money by working hard even by overtime. But now employees are willing less to work for a longer period of time, or on weekend days. In this case, the more concerned factors are the female employees; minorities; retention of employees; old workers; cultural diversity, etc.

Changing Market:

Changes in purchasing pattern of customer may affect the demand for labor. Changes in the economy will also affect the human resource planning.

Quality of Work Life:

Employees and managers are more concerned about the quality of work life in their organization. Richard E. Walton provided eight criteria for analyzing quality of work life in an organization. These are- fair compensation, safe and healthy working conditions; opportunities to use and develop human capacities; opportunity for continued growth and security; social integration in the work organization; constitutionalism; balanced role of work; etc.

Management System:

A management system is the processes and procedures used to ensure that an organization can fulfill all the tasks required to achieve its objectives. The benefits of effective management system includes more efficient use of resources to run the organization in a cost effective way; improved risk management; and increased customer satisfaction; etc.

Organizational Culture:

Organizational culture is the behavior of humans within an organization and the way that people attach to those behaviors. Organizational culture is consists of seven characteristics which range in priority from high to low. These characteristics are:- innovation which is risk orientation; attention to details- precision orientation; emphasis on the outcome- achievement orientation; emphasis on peoples- fairness orientation; teamwork of employees- collaboration orientation; aggressive- competitive orientation; and stability- rule orientation.

Leadership Development:

As one of the biggest challenges in human resource management is leadership development it needs to be the critical strategic initiative. The World Federation of Personnel Management Associations reports that, 'Across the globe leadership development has been identified as a critical strategic initiative in ensuring the right employees are retained and the culture of the organization which supports the performance from within to gain the market position, and managers are equipped to be initiated to take on the leadership roles in the future so that the organization will be viable in the long term.

Environmental Challenges:

Environment is comprised of the interacting systems of - physical, biological and cultural elements which are interlinked with both individually and collectively. It influences the growth and development of the organization. HR professionals of any organization cannot meet up the objectives without knowing and understanding of environmental challenges. The challenges faced by the manager and HR departments are as- governmental challenges; organizational challenges; international human resource management, etc.

Social Issues:

In some organizations, employees are represented by a labor union. Managing human resources in a union management requires a knowledge of specific laws; contract administration; and collective bargaining process. Effective HRM are based on external standards(benchmarked) and includes only the necessary procedures, steps, processes, and people(reengineered processes).

Different Objectives of HRD:

Objectives are the benchmarks against where the actions are evaluated. More often objectives are not formally stated. It is very challenging for the HR Managers or the HR Departments to achieve these kinds of objectives. These objectives are organizational objectives; functional objectives; societal objectives and personal objectives.


In the prevailing Globalization era, where the world turning into a village, so we need to turn our attention to the global business environment. This environment has had a major impact on the human resources, especially during the1980s and 1990s. The global business environment has drastically changed since the end of Second World War in 1945.It can be defined as the societal and task environment of an organization, which was influenced by the global forces. These forces includes global labor market; economic; technological force; and global competition; legal and political forces etc, to administer the global human resource functions properly and successfully. HR executives must have a complete knowledge of the ongoing international operations of the company, that is the business and economic situation in each of the countries where the company used to operates, and the types of skills required of employees for the international assignments.

Other Challenges:

HRM is the function which operates within an organization that focuses on recruitment, management, and providing direction for the people who work in the organization. It can also be described as the organizational function which deals with the issues related to peoples such as compensation; hiring; performance management; safety; wellness; benefits; employee motivation; communication; administration; and training; etc. A Successful organizations were becoming more adaptable to change directions, and customer-centered. In this environment, the HR professional must learn and know how to manage effectively through- planning, organizing, leading and controlling the human resource and be knowledgeable of emerging trends in training and employee development. In addition of the above challenges, the HR managers need to consider some other things which may affect the respective organization. These may have any positive or negative impact on human resources. The other challenges includes the following:

  1. Changing demographics of the workforce.
  2. Layoffs and downsizing.
  3. Information and communication system.
  4. Increased use of social networking to distribute information to the employees.

Green HRM

The degree to which the human resource management (HRM) practices, systems, policies and activities with environmental management is a growing area of research. Recent studies have suggested that, due to the emerging business in this case for green environmental management, the positioning of the ‘greening’ function plays a crucial role in improving the environmental performance of the organizations. The attention of the organizations wishes to give to green issues which is reflected in the extent of the integration of a company’s corporate Green HRM strategy into its performance management system. Incorporating the green management into the everyday language and fabric of the organization is a growing phenomenon, fuelled by the realization that is green credentials matter and opportunities for a competitive advantage through innovative methods and the design are feasible. The setting out of strategic priorities and the objectives which develops the ‘content’ and the shift then needs to be made from the content to ‘process’ which identifies many ways in which alignment between the overarching strategy and the Green HRM strategic priorities can be achieved. In addition, where the firms are committed to greening their operations and embedding these will be clearly in their mission statements and strategies, the organizationally committed employee would be more inclined to work in a congruent and the environmentally sound manner. Therefore, the positioning and alignment of the environment and HR function is very essential to achieving environmental performance which seeks to translate strategy into an operational practice. The engagement and commitment of employees is another key dimension of embedding Green practices in organization.

Positioning and allignment of the environmental and HR function:

The HR function has a critical role to play in creating and implementing the sustainable business strategies throughout organization. The positioning of ‘greening’ function and its alignment to the corporate strategy and organizational performance is the key to improve environmental sustainability in the organizations. Cohen et al. suggested that the organizations may come to realize the needs for sustainability through the different routes, for example, a value-based route may be driven by the personal principles and passion of individuals, a strategic route may redesigned the business model to position this function accordingly and a defensive route may introduce the policies and practices to meet legal responsibilities.

Green employee engagement:

The role and responsibility of the employees in the successful alignment and integration of Green activities into strategic aims of the organization has to be considered. It has been suggested that engaging with employees in addressing environmental concerns is one of the most significant challenges faced by the organizations now a days and in the future. Employee involvement in environmental management has three centers: first, through tapping employees’ tacit knowledge gained by their close links to the production process; second, through engaging and empowering employees to make some suggestions for environmental improvements and, third, through developing the culture in the workplace, which supports environmental improvement efforts.

Globalization and cultural complexity:

The wave of globalization was revolutionized the approaches and challenges of HRM in recent decades. Growing internationalization of businesses as well as advancements in communication, and digital technologies may affect HRM in terms of organizational policies, management styles and work ethics of an organization. Although, several organizations have created HRM departments and HRM practices are not addressed in a systematic way and integrated way. As a result, the problems continue to exist in the organizations and institutions.

Youth and unemployment:

Younger generation of employees are reported to be most willing to adopt to new ways of doing works and believe that modern HR trends are more progressive and efficient. Such employees believes in a culture of mentoring, clear communication and employee recognition which majority of the western countries adopt.

Quest for talent and career development:

In a highly competitive environment, the organizations seek to differentiate themselves from the competitors and recognize talented staff that could provide a sustainable competitive advantage. Often the performance of the organization determines the success of the organization. Therefore, the organizations need to be strategic in developing and retaining the best staff to drive the organization forward.

Employee engagement and motivation:

Employee engagement is the key factor to enable productivity, employee involvement, and the job performance. Managers and supervisors are eager to hire the individuals who are highly motivated and driven.

Contemporary issues faced by human resource managers today

Human resources managers who encounter those challenges us their leadership skills and expertise to avert issues that might arise from these challenges.

Multi-Generational Challenges in Workplace:

Four generations are their in the work force. Ranging from septuagenarians to 20-something recent college graduates, the company may experience the challenges posed by having so many different sets of values, expectations and work styles in the organization.

Legislation Affecting Workplace:

The Recovery Act of 2009 and the health care reform bill, which had passed in March 2010, promised a immediate impact on the workplace. The requirements of the Recovery Act had an enormous affect on the businesses which provides health care insurance to workers who lost their jobs. Small businesses that provide consulting services to all employers may see an increase in the revenue due to the surge in employers needing professional services to help them to comply with the legislative changes.

Technological Advances and Workplace:

The workplace setting is changing because of the technology. Telecommuting, telework and remote reporting relationships are becoming the norm rather than the anomaly. Flexible work schedules and arrangements are ways to improve the productivity for some employees; however, these types of technology-based changes for all those employees. Human resources managers must ensure there is a mutual agreement between the employer and the employee for options that include telecommuting.

HR and internationalization of business

The global challenges:

  1. Coordinating the market; product; and production plans on the worldwide basis.
  2. Creating organizational structures capable of balancing the centralized home office control with the adequate local autonomy.
  3. Extending the HR policies and the systems to service staffing needs abroad.

Challenges of IHRM:

  1. Deployment: Easily getting the right skills to where they needed, regardless of the geographic location.
  2. Knowledge and innovation Dissemination: Spreading the state of the art knowledge and the practices throughout the organization regardless of the origin.
  3. Identifying and developing talents on a global basis: Identifying those who can able to function effectively in a global organization and develop their abilities.

Strategic Human Resource Management (SHRM)

Strategic Human Resource Management (SHRM) can be defined as the link between human resources and strategic goals and objectives of the organization. Most importantly, the aim is to improving the business performance and to develop an organizational culture which will foster innovation, flexibility and competitive advantage.

Challenges of SHRM

There are some issues that HR strategy may address:

  1. Structure: The success of the company depends upon whether there is a proper management structure in the place.
  2. Team-working: By withdrawing the old traditional hierarchies a background of creating a team building is created. In a many of the cases, the less layers there are between the workers and the director there are, the more harmonized working environment. Also the communication between the staffs is easier and more effective.
  3. Performance: This strategy is based on an analyzing the critical success factors and the performance levels reached in relation to them. The performance can be improved by taking necessary steps to improve training, development, reorganization, the development of performance management processes, business process re-engineering, etc.
  4. Quality and customer care: The aim of the most companies is to achieve the competitive advantage. The competitive advantage is often measured by the customer satisfaction and hence loyalty and retention.


Now the members of today’s workforce have more educated, higher aspirations about participation, and more expectations about the due process in the work situation. Some segments of the workforce are more likely to find the collective action such as unionization acceptable than in the past. Influences of human resources management from the external environment are many. Some of the salient external influences, which tends to be interrelated, are the high cost of energy, inflation, differential industry growth, intense national and international competition, successful management practices in other countries, the government deregulation of several industries, technological innovations, and widespread concerns about productivity and product quality. Different legislation and presidential executives orders have had, and continued to have, a profound effect on the human resources management. Successful organizations are becoming more ease to adaptable, resilient, quick to change directions, and the customer-centered. Within this environment, the HR professional must learn how to manage the organization effectively through acquiring, developing, motivating and maintaining the human resources. HR professional can’t ignore these challenges rather they ought to be lined to design and execute innovative mechanisms of developing the skills and the competencies of human resources to prepare them to accept the emerging challenges.

16 August 2021
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