Pros & Cons of Globalization on Human Resource Management

For many businesses, globalization is the United States free market system applied to the entire world. Information technology and faster distribution methods have made world commerce easier than ever. This freer flow of trade had many benefits and drawbacks, especially for the human resources function of businesses. HR departments are charged with hiring, training and ensuring staff development. These tasks become more complex as companies move departments overseas or redefine the business as operating in the global economy.

Many countries have lower minimum wages, different labor standards and unfamiliar (or nonexistent) work safety regulations. These factors make manufacturing and running a business in these countries cheaper than running businesses in the United States or other, more industrialized countries. Many people think the practice of outsourcing for cheaper labor is exploitative and widens the gap between the world’s rich and the world’s poor. HR staff can combat social injustice by pushing for increased accountability within their companies. A business doesn’t have to operate with lower labor standards simply because it operates in a country that allows social injustice.

Human resources managers in globalized companies must navigate the variety of social norms inherent in combining the efforts of employees from several different countries. The process is similar to the HR practice of multiculturalism, but focused on the specific cultures involved in the current globalization effort. Financial cooperation often leads to political cooperation between countries that have traditional contempt for each other. The key is social openness that drives positive workplace interaction and creates an environment of cultural understanding.

Globalization gives HR personnel the chance to experience and absorb how other companies from other cultures carry out HR functions and other business processes. HR managers who take time to learn how another culture conducts business can compare that to their own business's process to choose more productive or more efficient techniques. Having access to a variety of businesses approaches gives HR professionals an opportunity to choose the from best ideas and methods in the world.

The loss of United States jobs to overseas markets is one of the most widely publicized downfalls of globalization. Many corporations transfer portions of the business to other countries because of market expansion or because it’s less expensive to operate in the other nation. This is a positive for the country that the corporation moves into, but it leads to decreased job security for many Americans. HR professionals must increase morale for employees worried about their position, especially after a wave of layoffs related to foreign expansion.