HR MANAGEMENT CHALLENGES -ECONOMIC AND TECHNOLOGICAL CHANGE

The environment faced by HR management is a challenging one; changes are occurring rapidly across a wide range of issues. A study by the Hudson Institute, entitled Workforce 2020, has highlighted some of the most important workforce

issues. From that and other sources, it appears that the most prevalent challenges facing HR management are as follows:

-Economic and technological change

-Workforce availability and quality concerns

-Demographics and diversity issues

-Organizational restructuring

Several economic changes have occurred that have altered employment and occupational patterns in the United States. A major change is the shift of jobs from manufacturing and agriculture to service industries and telecommunications.

This shift has meant that some organizations have had to reduce the number of employees, while others have had to attract and retain employees with different capabilities than previously were needed. Additionally, pressures from global competitors have forced many U.S. firms to close facilities, adapt their management practices, and increase productivity and decrease labor costs in order to become more competitive. Finally, the explosive growth of information technology, particularly that linked to the Internet, has forced many changes throughout organizations of all types.

OCCUPATIONAL SHIFTS Projections of the growth and decline in jobs illustrates the economic and employment shifts currently occurring.

The increase in the technology jobs is due to the rapid increase in the use of information technology, such as databases, system design and analysis, and desktop publishing. The health care jobs are growing as a result of the aging of the U.S. population and workforce, a factor discussed later.

Human Resource (HR) management

The design of formal systems in an organization to ensure the effective and efficient use of human talent to accomplish the organizational goals.

GLOBAL COMPETITION One major factor affecting these shifts is the globalization of economic forces. As seen the past few years, the collapse of Asian economies had significant effects on U.S.-based organizations. One estimate by U.S. government statisticians is that over 25% of all U.S. manufacturing workers hold jobs dependent on exporting goods to other countries. This is particularly true with more highly skilled, technical jobs in technology-driven industries. As a result, these export-driven jobs pay wages averaging 25% higher than most other manufacturing jobs.On the other hand, the less-skilled manufacturing assembly jobs have been shifting from the higher-wage, developed economies in the United States and Western Europe to developing countries in Eastern Europe, China, Thailand, Mexico, and the Phillippines.

Due to the increase in information technology, global linkages are now more extensive and production and transportation can be coordinated worldwide. Therefore, the loss of manufacturing jobs in the United States has been replaced with jobs in information technology, financial services, health care, and retail services.

In summary, the U.S. economy has become a service economy, and that shift is expected to continue. Over 80% of U.S. jobs are in service industries, and most new jobs created by the year 2006 also will be in services. It is estimated that manufacturing jobs will represent only 12% to 15% of all U.S. jobs by that date.