Gap between Talent Demand and Supply

Figure 1- Globalization and HRM (Mikecz, 2016)

With the globalization, due to rapid changes within businesses context, modern businesses’ HRM departments face numerous and complex challenges, and exploit opportunities and the role of HRM is transforming. According to Prahalad (1983), an organization’s talent is the main source which decides company’s competitive advantage, profitability, sustainability and employee performance.

According to a research done by Ulrich (1996) among 180 multinational company chief executives around the word stated, global supply of talent is shortage and the gap between the demand and supply of talent is a challenge for HRM and it is about to be increase continually. For an example, World Economic Forum (2010) stated, United States faces long term talent shortages mainly due to aging and retirement of baby boomers. By 2020, for every five retiring workers, only four new workers will join the labor force.

According to a research done on largest sixteen US companies by Hamel and Prahalad (1994), companies must practice strategies for attracting human capital rather than financial capital. Multinational enterprises that will adapt their HR practices in according to changing global labor market conditions and foresee labor demand trends will be able to attract and retain high performing employees.

As the world has become a one village with globalization, it is a challenge for HRM departments of multinational companies to manage a workforce diverse in culture, language skills, and distributed in various countries. HRM departments will have to develop a global mindset among employees rather than limiting to local ways of doing business.

According a research done by Rosenblatt (2011) on multinational companies, there is an incensement of low cost labors from emerging countries and the number of migrants grows exponentially from developing countries to developed countries. According to Prahalad (1994) a research done among Indian, Chinese and United states universities, India produces engineers twice as United states and China do. Which can be analyzed that the total number of university-educated workers in developing countries (low cost labours) is greater than in developed countries. 

It would be benefit for developed countries as it minimizes talent gap for cheap-able cost. But for developing countries, HRM will have to practice strategies to retain employees and attract worldwide talent employees via playing roles and responsibilities in organization which openness to cultural diversity.

References 

Hamel, G. and Prahalad, C.K. (1994), Competing for the Future. Boston Mass: Harvard Business School Press.  

Mikecz, R. (2016, October 23rd). Globalization: Threat or Opportunity?. Available at: http://glomacs.ae/articles/globalization-threat-opportunity. Accesses on 06th May 2018 at 06.33pm. 

Prahalad, C.K. (1983). Developing Strategic Capability: An Agenda for Top Management, Human Resource Management, 22: 237-54.   

Rosenblatt.V (2011). The impact of institutional processes, social networks, and culture on diffusion of global work values in multinational organizations', Cross Cultural Management: An International Journal, Vol. 18 Issue: 1, pp.105-121. 

Ulrich. D (1996) .Human Resource Champions-The next agenda for adding value and delivering results. Boston, Mass: Harvard Business School Press.