Employee relations and globalisation

Background

There is an evolving relationship between employee relations and globalisation.

In recent decades we have seen the emergence of HRM as the dominant perspective for structuring organisational relations and values

An overview of employee relations

The business environment is quickly becoming more international in character

Globalisation it transforming employee relations

Organisations are now attracting people from around the world

Tapping into international labour markets

This has created opportunities as well as pressure

The 5 areas of globalisation

Globalisation and innovation

Globalisation and culture

Globalisation and economics

Globalisation and society

Globalisation and quality of life

Globalisation is shifting employee relations from a national focus to an international focus

Employers and employees must adapt

Source of innovation and concern

Globalisation has provided the opportunity for those within organisations at all levels to take advantage and learn from this internationalising environment

For employees in particular it can feel as if they have no power to stop this ‘inevitable’ change and the higher inequality and often lower wages it brings

Human resource management (HRM)

Force in helping organisations and its members navigate globalisation

Employers

HRM are crucial for helping to manage cultural differences among its workforce and maximising the opportunities presented by this global context.

Employees

Can recruit employees from an international pool of candidates as well as assist in their adjustment once hired

Are no longer restricted to finding work in their own country or region

Challenges posed by these changes should not be underestimated

Governments and private institutions are often restricted in what they can do due to existing global economic expectations and trends

Instrumental in shaping an organisational strategy to meet challenges

Common for employers and politicians to champion business-friendly policies based on the need to remain globally competitive

They are often implemented at the expense of employee interests

A key force for potentially creating a ‘win–win’ situation for employers and employees in the face of globalisation

Questions over whether HRM is the best placed and intended perspective for doing so

The transition from employee relations to HRM

Employee relations

Def - The relationship between employers and employees; this term covers both individual and collective relationships in the workplace

The most effective since the 19th century was collective bargaining between employers and labour organisations such as unions

Established in countries across the world through years of labour struggle, leading to higher wages and a range of worker’s rights from safety to job security

Global economic pressures and the rise of ‘free-market’ ideas have greatly diminished the power of labour unions

HRM

Has evolved as a prevailing perspective in its place for guiding employee relations

Its focus is not on ‘participation’ but, instead, ‘inclusion’

Its focus is on replacing collective bargaining and industrial democracy with individual negotiation and processes of ‘consultation’

Aim

It advocates policies that seek to empower the workforce for such purposes while also protecting them against unfair treatment, discrimination and threats

To maximise the production and performance of an organisation’s personnel

Globalisation has raised a number of challenges

The demand for global competitiveness limits the available options for HRM practitioners. Emphasis on ‘doing more with less'

Long-term strategies are commonly dismissed if they do not bring immediate short-term profits

Employee worries over exploding personal debt – indirectly limiting their bargaining power – and a more precarious employment environment generally

Globalisation creates possibilities

Employee ‘empowerment’ is on the rise, encompassing new technologies to allow employees to have more flexible working arrangements and better ‘work–life balance’

A renewed emphasis on corporate social responsibility that can help firms improve their policies associated with environmental, social and governance (ESG) values

Enhanced opportunities for benefiting from global ideas and talent, helping to produce more open and diverse organisations

There are areas in which HRM seek to innovate

The international labour market

Globalisation has created an increasingly international labour market

Individuals are applying for jobs across the world, no longer restricted to simply choosing opportunities in their own country or region

Organisations are progressively transnational with divisions, operations and contracts that span internationally

Less directly, employers and employees must be aware of global employment trends

Outsourcing, that can dramatically impact them both positively and negatively


The growth of an international labour market offers organisations and its members a number of new possibilities

Employees

Being able to market their skills to employers in different contexts - this results in the opportunity to use their career to travel, relocate and experience diverse cultures first-hand

The spread of organisations into new global areas can create enhanced opportunities for individuals to gain the skills necessary to help organisations successfully engage in such cultural exchange

Employers

It permits them to capitalise on a wider talent pool as well as for institutions to learn constructively from this more diverse workforce

Multiculturalism

What is arising is a progressively multicultural organisation.

A significant contemporary value

Reflects desires for the inclusion, respect and safety of populations marked by ethnic and cultural differences

Organisations are literally composed of multiple cultures as they operate in numerous parts of the world and their members are from various international backgrounds

Represents the ways organisations must manage and take advantage of this multiculturalism if they are to be globally competitive

HRM

Help organisations to navigate these diverse cultures

Key forces for assisting firms to attract an international workforce and meet their diverse needs and desires

Important information brokers, in terms of highlighting contrasting regulations and cultural expectations between nations and regions

They foster a broader culture of ‘organisational learning’ that encourages institutions to not only adapt to but also benefit from this greater diversity

Positively or negatively impact on employment?

-ve Competition from lower income countries can decrease employment in richer countries.

+ve During times of global recession globalisation can also help to promote employment

Factors associated with globalisation which impact on employment

Competition

Technology

Legislation

Reflection on the ‘international’ labour market

It reveals how employees must be aware of broader global economic, political and technological trends as well as the global imbalances between employees across the world.