HRM - CHALLENGES - GLOBAL CONTEXT

Human Capital development

Figure 1 - Armstrong and Taylor, (2014).

Human is the most divested resource which has to be strategically developed in order to have a skillful and fine tuned work force to achieve organizational goals and competitive advantage and those strategies may also required lot of theoretical knowledge up dated in time to time (Armstrong and Taylor, 2014).Human Resource Management (HRM) today faces issues aroused organizations’ internal and external environment.Human Capital (HC) development has challenging to organizations' both internally and externally as it is necessary to accomplish anything.

HC is the measure of economic value that people provide through their skills, knowledge, and abilities. According to Ulrich, (2009) “Securing intellectual capital means, up grading the leadership bench.” Preparing employees for the future while enriching them for today and to come up with innovative ideas, to acquire new competencies, to develop skills/ behavior/attitudes, a relevant environment has to be created.

According to a survey done by SHRM in 2015 today’s most important human capital challenges involve retention, engagement and providing strong benefits and compensation. At most organizations, both HR and non-HR C-suite executives view HR as having a strategic role and are currently planning to make changes to their HR function to make it even more strategic and measurement-driven in the years to come .Human capital is increased through, division of labour and specialization, basic education, vocational training, creativity building, proper infrastructure developments and competitiveness. 

Figure 2 - Anderspink - Human Capital development stages

HC determines by, skills and qualifications, educational levels, work experience, social skills – communication, intelligence, judgment, emotional intelligence, personality, habits and personality traits, creativity, fame and brand image of an individual. Depend on the working environment the HC measurement becomes vary. In manufacturing companies, it can be measured by the productivity where HC strongly related to physical strengths and quality of units produced per day. In knowledge economies (service sector) it is hard to measure the level of capital so the broad measures like skills and abilities with greater varieties are used as traits. 

It’s visible that companies do spend more than 70 percent of their costs over the maintenance of employees. But yet, how these expenses would be a capital investment? It can only be shown in benefits aspect, such as increase employee satisfaction, improve retention rates , develop employee engagement, develop customer engagement, improve return on investment, improved organizational communication, better recruitment and create a greater company culture are the significant benefits given by HC today (Ulrich 2009).

According to the Human Capital Report – 2017 (under 04 indexes) released by World Economic Forum, the small European countries like Norway, Finland and Switzerland are heading the report. Being Singapore is at 11th, Malaysia is at 33rd and Thailand at 40th among 130 countries is significant. As a South Asian Country, Singapore’s remarkable development reveals, they have produced the HC that is needed to take advantage of digital innovation by upholding IT education and basic education, both together. 

Conclusion:
In current contexts the HR managers should have the excellent professional skills in developing the people resource. HRM policies should be credible, strategic, and comfortable in global application, and in a necessary environment in which employees can learn and develop better.

References:

1. Armstrong, M. and Taylor, S. (2014). Armstrong's Handbook of Human Resource Management Practice. 13th ed. London: Kogan, pp.309-440.
2. Anon,(2018).[online] Available at: http://reports.weforum.org /global-human-capital-report-2017/human-capital-report-2017/ [Accessed 1 Jul. 2018].
3. Business and Human Capital Challenges Today and in the Future. (2015). [online] SHRM, pp.5-111. Available at:https://www.shrm.org/about-shrm/press-room/press-releases/ documents /shrm% 202015% 20 business%20human%20capital%20challenges.pdf [Accessed 1 Jul. 2018].
4. Snell S., Morris S. and Bohlander G., (2015), Managing Human Resources, 17th ed., Canada,Cengage Learning, pp.4-100.
5. Ulrich, D. (2009). HR transformation: Building Human Resources From The Outside In. :Chicago, McGraw-Hill