Human Resource Management

BS in Psychology 4th Year Credit Hours 3

Semester : Spring 2020

Lecture # 2

Institute of Professional Psychology

Bahria University – Karachi Campus
 Trends shaping HRM
• Working cooperatively with line managers, human resource
managers have long helped employers hire and fire employees,
administer benefits, and conduct appraisals.
• However, trends are occurring in the environment of human resource
management that are changing how employers get their human
resource management tasks done.
• These trends include:
• workforce trends,
• trends in how people work,
• technological trends,
• and globalization and economic trends.
 Trends shaping HRM
• Workforce Demographics and Diversity Trends:
• Composition of the workforce will continue to change over the next
few years; specifically, it will continue to become:
• more diverse with more women,
• minority group members,
• and older workers in the workforce.
• Between 1992 and 2022, the ‘white’ (Caucasian) workforce will drop
from 85% to 77.7%.
 Trends shaping HRM
• Workforce Demographics and Diversity Trends:
• At the same time, the “Asian” workforce will rise from 4% to 6.2%,
and those of Hispanic origin will rise from 8.9% to 19.1%.
• The percentage of younger workers will fall, while those over 55 years
will leap from 11.8% to 25.6% in 2022.
• Many employers call “the aging workforce” a big problem.
• The problem is that there aren’t enough younger workers to replace
the projected number of baby boom–era older workers (born roughly
1946–1964) retiring.
 Trends shaping HRM
• Many employers are bringing retirees back (or just trying to keep
them from leaving).
• With overall projected workforce shortfalls (not enough younger
workers to replace retirees), many employers are hiring foreign
workers for U.S. jobs. The H-1B visa program lets U.S. employers
recruit skilled foreign professionals, when they can’t find qualified
American workers.
• U.S. employers bring in about 181,000 foreign workers per year under
these programs, although such programs face opposition.
• Other firms are shifting to nontraditional workers.
 Trends shaping HRM
• Nontraditional workers are those who hold:
• multiple jobs,
• or who are “temporary” or part-time workers,
• or those working in alternative arrangements (such as a mother–
daughter team sharing one clerical job).
• Others serve as “independent contractors” for specific projects.
• Almost 10% of American workers—13 million people—fit this
nontraditional workforce category.
Generation
• Each generation is influenced by the times in which it
grows, Music, movies, politics, and defining events of that
period.
• Members share the same major cultural, political, and
economic experiences and often have similar outlooks and
values.
• Marketers may choose to advertise by using the icons and
images prominent in its experiences.
• General observations about the four main generation of
U.S. consumers, from oldest to youngest.
Baby Boomers
• Approximately 76 million U.S. consumers born between 1946 and
1964.
• Represent a wealthy target, possessing $1.2 trillion in annual
spending power and controlling three quarters of the country’s
wealth.
• In network television circles, because advertisers are primarily
interested in 18- to 49-year-olds, though ironically the average age of
the prime-time TV viewer is 51.
• With many baby boomers approaching their 70s and even the
youngest wave cresting 50, demand has exploded for products to
turn back the hands of time.
 Generation X
• Gen X, the 50 million or so consumers, born between 1964 and 1978.
• Raised in challenging times, when working parents relied on day care
and corporate downsizing led to layoffs and economic uncertainty.
• Social and racial diversity were more widely accepted, and
technology changed the way people lived and worked.
Generation X
• Although Gen Xers raised standards in educational
achievement, they were also the first generation to find
surpassing their parents’ standard of living a serious
challenge.
• These realities had a profound impact. Gen Xers prize self-
sufficiency and the ability to handle any circumstance.
• Technology is an enabler for them, not a barrier.
• Unlike the more optimistic, team-oriented Gen Yers, Gen
Xers are more pragmatic and individualistic.
• Direct appeals where value is clear often work best,
especially as Gen Xers have become parents raising families
Generation Y
• Millennials (or Gen Y)
• People born between 1980s and early 2000s.
• That’s about 78 million people in the US, with
annual spending power approaching $200 billion.
• If you factor in career growth and household and
family formation and multiply by another 53 years
of life expectancy, trillions of dollars in consumer
spending are at stake over their life spans.
• Marketers are racing to get a bead on Millennials’
buying behavior.
Generation Y
• Own multiple devices and multitask while online, moving across
mobile, social, and PC platforms.
• Go online to broadcast their thoughts and experiences.
• Millennials are socially conscious about environmental issues.
Trends shaping HRM

• Some employers find millennials or “generation Y”

employees a challenge to deal with, and this isn’t just an
American phenomenon.
• New York Times recently reported that because China’s
one-child rule led many parents to pamper their children,
China’s senior army officers are having problems getting
millennial-aged volunteers and conscripts to shape up.
• On the other hand, millennials also bring a vast array of
skills.
• Having grown up with Apple and Google, they’re
comfortable with innovation.
Trends in how people work
• At the same time, work has shifted from manufacturing jobs to
service jobs in North America and Western Europe.
• Over two-thirds of the U.S. workforce is employed in producing and
delivering services, not products.
• By 2020, service- providing industries are expected to account for 131
million out of 150 million (87%) of wage and salary jobs overall.
• So in the next few years, almost all the new jobs in the US will be in
services, not in goods-producing industries.
Trends in how people work
• On-demand workers:
• Anyone who registered on Uber, knows about on-demand workers.
• Uber was signing up 40,000 new independent contractor drivers per
month, a rate that was doubling every few months.
• Today, in more and more companies like Uber, employees aren’t
employees at all, but are freelancers and independent contractors
who work when they can on what they want to work on, when the
company needs them.
• In essence a vast lodging company can run with only a fraction of the
“regular” employees.
 Trends in how people work
• The fact that employers increasingly rely on such Uber-like “extended
workforces” has implications for HR.
• Companies that rely on freelancers, need to create policies on compensation,
and become more expert as talent brokers in matching specific workers with
specific tasks.
• People who work for on-demand services say the menial jobs can make them
feel somewhat disrespected.
• Such work is unpredictable and insecure.
• An article in the New York Times said: “The larger worry about on-demand
jobs is not for benefits, —a future in which computers, rather than humans,
determine what you do, when and for how much.”
• Some Uber drivers recently sued to become regular employees.
 Trends in how people work
• Human Capital: One big consequence of such demographic
and workforce trends is employers’ growing emphasis on their
workers’ knowledge, education, training, skills, and expertise—in
other words on their “human capital.”
• Service jobs like consultant and lawyer always emphasized
education and knowledge.
• IT-related businesses like Google and Facebook demand high
levels of human capital.
• The big change is that even “traditional” manufacturing jobs like
assembler are increasingly high-tech.
 Trends in how people work
• Similarly bank tellers, retail clerks, bill collectors, and package
deliverers need technological sophistication they wouldn’t have
needed a few years ago.
• So in our increasingly knowledge-based economy, the acquisition
and development of superior human capital is essential to firms’
profitability and success.
• For managers, the challenge is to manage such workers differently.
• For example, empowering workers to make more decisions
presumes you’ve selected, trained, and rewarded them to make
more decisions themselves.
• Employers therefore need new human resource management
practices to select, train, and engage these employees.
Globalization Trends
• Globalization refers to companies extending their sales, ownership,
and/or manufacturing to new markets abroad.
• Toyota builds Camrys in Kentucky, while Apple assembles iPhones in
China.
• Free trade areas—agreements that reduce tariffs and barriers among
trading partners—further encourage international trade.
• The NAFTA and the EU are examples.
• Globalization has boomed for the past 50 years. U.S. imports and
exports rose from $47 billion in 1960, to $562 billion in 1980, to
about $5.1 trillion recently.
• Evolving economic and political philosophies drove this boom.
Governments dropped cross-border taxes or tariffs, formed economic
free trade areas, to encourage free flow of trade among countries.
Globalization Trends
• The fundamental economic rationale was that by doing so, all
countries would gain, and indeed, economies around the world did
grow quickly until recently.
• At the same time, globalization vastly increased international
competition.
• More globalization meant more competition, and more competition
meant more pressure to be “world class”—to lower costs, to make
employees more productive, and to do things better and less
expensively.
Globalization Trends
• As multinational companies jockey for position, many transfer
operations abroad, not just to seek cheaper labor but to tap into new
markets.
• For example, Toyota has thousands of sales employees based in
America, while GE has over 10,000 employees in France.
• The search for greater efficiencies prompts some employers to
offshore (export jobs to lower-cost locations abroad, as when Dell
offshored some call-center jobs to India).
• Some employers hire offshore even highly skilled jobs such as lawyer.
• Managing the “people” aspects of globalization is a big task for any
company that expands abroad—and for its HR managers.