IN A GLOBALISED ECONOMY, AN

ORGANISATION MUST ENSURE THAT IT

RECRUITS AND RETAINS THE MOST SKILLED,
QUALIFIED AND TALENTED STAFF POSSIBLE

25th of August of 2010

Roger Robert Kock

ID: 29002666
MBA Human Resources Management
1. CONTENTS
2. STATEMENT OF PURPOSE..................................................................................................3
3. EXECUTIVE SUMMARY.......................................................................................................4
4. INTRODUCTION..................................................................................................................5
5. ANALYSIS............................................................................................................................6
5.1. WHAT IS GLOBALISATION?..........................................................................................6
5.2. NEW COMPETENCIES DEMANDED BY THE GLOBALISATION CONTEXT......................6
5.3. DIVERSITY AND THE CHANGING NATURE OF THE WORKPLACE.................................7
5.4. RETAINING TALENTS....................................................................................................9
5.5. MOTIVATION AND REWARD SYSTEM........................................................................10
5.6. THE IMPORTANCE OF RECRUITMENT AND SELECTION............................................11
5.7. MAIN TENDENCIES AND CHALLENGES OF THE INTERNATIONAL MANAGEMENT OF
HUMAN RESOURCES.............................................................................................................11
6. CONCLUSION....................................................................................................................13
8. BIBLIOGRAPHY.................................................................................................................15
9. APPENDIX.........................................................................................................................18
9.1. MAIN HR CHALLENGES..............................................................................................18
9.2. HOW TECHNOLOGY IS CHANGING THE WORKPLACE................................................20

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2. TERMS OF REFERENCE
The terms of reference of this report are: to discuss and critically evaluate the view
that, in a globalised economy an organisation must ensure that it recruits and retains the
most skilled, qualified and talented staff possible.
For that, the following factors will be considered:
 The concept of ‘globalisation’.
 The increasing diversity of the workforce.
 The changing nature of the workplace.
 The impact of these on Human Resource Management functions in work
organisations.

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3. EXECUTIVE SUMMARY

Globalization is characterized by a process of global integration that induces the

growth of interdependence among nations and among organisations also.
In this new era, low production costs, technology or access to capital are necessary
factors, but not enough for success. Beyond those, the most recent concepts concerning the
strategies for global business point to competencies, invisible assets and organizational
capacities as key factors that influence a long-term success in a global market.
Considering this new scenario, globalised companies use a number of practices and
policies to attract and retain their talents.

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4. INTRODUCTION

With the advent of globalization, the barriers that previously existed between the
continents were broken. Today, for example, children navigating in the virtual world with
access to information at the extremes of the planet have become a common scene. In the
corporate world comes a very similar process at an ever-accelerating speed, because
acquiring new technologies has become not just a privilege for a few, but a requirement to
be competitive in the market (Held and McGrew 2000: 16).
According to Dowling (1993: 98) globalization has had as significant influence on
organizational behaviour. Businesses have gone from regional to global strategies, where
major companies are seeing themselves installing subsidiaries around the world, and
requiring from those immediate results.
Within this context, organizations are investing more and more in human capital,
after all are the people who make a difference to the business. In other words, the stimulus
to the development of the human became a two-way investment, and the company that
ultimately wins will count on highly skilled employees as well as the professionals will
become more valued.

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5. ANALYSIS

5.1. WHAT IS GLOBALISATION?

Globalization is a widely debated phenomenon, but understanding it is not possible

without a deep reflection, since, according to David Held and Anthony McGrew (2000: 17):
"There is no single, universally accepted definition for globalization”.
Globalization is characterized by a process of global integration that induces the
growth of interdependence among nations.
Agreeing with David Held and Anthony McGrew (2000: 17), for a clear understanding
of globalization, the following concept will be adopted: “It is the set of transformations in
political and economic order that has been happening globally for decades, with the
integration of markets in a “global-village”, operated by large international corporations,
and with countries gradually abandoning tax barriers to protect their production from
competition”.

5.2. NEW COMPETENCIES DEMANDED BY THE GLOBALISATION CONTEXT

According to PUCIK, THICHY and BARNETT (1992: 133), the traditional sources of
competitive advantages can’t provide a sustainable position anymore. Low production costs,
technology or access to capital are now necessary factors, but not enough for success.
Beyond those, the most recent concepts concerning the strategies for global business point
to competencies, invisible assets and organizational capacities as key factors that influence a
long-term success in a global market.
The globalization process doesn't just approximate the HR of the strategic core of
the company, but also change the rules of this department. For instance:
 In the past, the international selection was focused only on the managers'
transcultural adaptability. The current emphasis, however, it is centred on
the managers' learning capability.
 Previously, the international system of rewards emphasized the coordination
and justness of wage policies; today the concern is with the consistency
between rewards and the global business strategies.

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  The traditional international training was centred in transcultural knowledge;
today, the emphasis is in the development of partnerships and multicultural
teams.
But, the main change is that nowadays, the human resources management function
started to be a duty of each manager in the company, which needs to prepare himself for
such important responsibility.
To provide value to the business, the managers of a global company, that now are
also human resources managers, should focus in specific organizational competencies to
assure a competitive advantage in the global environment. Three competencies are
particularly important for a global firm (PUCIK, THICHY & BARNETT, 1992: 134):
 Organizational apprenticeship, in other words, how fast the company can
acquire new abilities, such as marketing and technological knowledge.
 Continuous improvement, the ability of the company to continually improve
its quality parameters, as well as cost and delivery of their products and
services.
 Competitive culture, focus the energy of the people inside the company to
achieve its goals. (PUCIK, THICHY & BARNETT, 1992: 134-135)

5.3. DIVERSITY AND THE CHANGING NATURE OF THE WORKPLACE

The changing nature of the workplace is propelling ethics training to institutional
priority. Today's workforce is composed of people who are more diverse than ever in
nationality, culture, religion, age, education, and socioeconomic status. These people enter
the workforce with different backgrounds, values, goals, and perceptions of acceptable
behaviors. (Lankard: 1991). 
In a multicultural experience, there is the exchange of principles and values of each
culture involved, and this exchange of ideas and experiences leads to innovation and
creativity. However, the downside is that the coexistence of different groups can also lead
to cultural clashes.
The first step to avoid these clashes is an efficient recruitment and selection
programme. According to Ahlrichs (2000: 201), when a company is focused on the selection
process, it wants to continuously improve the intellectual capital and add new values to

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intangible assets of the organization. Then, arises the necessity of change through creativity
and innovation, which is introduced in the organization by new human values.

5.4. RETAINING TALENTS

As previously mentioned, the current environment demands a new way of thinking

towards talent attraction, identification, training and retention. Today for a company to
compete effectively, it needs human creativity at all of its levels (Ericsson, 2006: 622).
“Ensure a stimulating working environment, giving
space to enable the professional to constantly learn
and provide opportunities for growth are therefore
essential care that a company must have to retain
their talent.” (Ghosn, 2005: 28)
Carlos Ghosn
Renault-Nissan CEO

Having talent as an essential element in the pursuit of creating and implementing

different solutions, the organizations’ attention revolves around how to attract and retain
them.
The difficulty in retaining talent is growing increasingly, because professional values
and attitudes are also changing, particularly among those who are young; they seek
autonomy and freedom, as a form of compensation for their work (Ericsson, 2006: 624).
Considering this new scenario, globalised companies use a number of practices and
policies to attract and retain their talents. In table 1 it’s possible to observe the main
approaches used today.

Reference Practice Approach

Serve as a stimulus, so that
Internal recruitment professionals think in continually
improve their qualifications.
Ahlrichs (2000)
It happens when the internal
External recruitment professionals' qualification doesn't
satisfy the vacancy’s requirements.
It is constituted as a strategic element.
The company contributes to the
Ericsson (2006) Development
professionals' development and
consequently adds value to itself.
Presupposes gradual and continuous
Carter et al. (2009) Career

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 professional development, result of a
established relation between the
person and the company.
The existent trust in the relation
between leaders and subordinates
Johnson (1998) Trust facilitates the cooperation, making
possible the permanence of the person
in the organisation.
Remunerate an employee based in the
Johnson (1998) Salary person's analysis and his set of abilities,
not his job title.
The organization understands the
competence as the knowledge set,
Reward for
Ashby et al.(2001) abilities and attitudes and the
competencies
employee’s capacity to deliver his work
and add value to the company.
Besides supplying the basic needs, the
Thorne and Pellant
Benefits company also offers benefits that are
(2006)
used to attract and retain people.
Employee’s satisfaction and the
introduction of a conducive climate
Life quality in the work
Branham (2001) bring positive results in quality and
environment
productivity, and provide a more
creative environment.

5.5. MOTIVATION AND REWARD SYSTEM

Motivation is characterised by a certain level of willingness on the part of the

employee to increase his effort, to the extent that in a way that also satisfies some need or
desire. At a basic level it can be seen that motivation is about ‘motives’ and ‘needs’
(Beardwell, 2004: 505).
This perception is in part dependent on the extent to which the job offers
opportunities to increase self-esteem and self-worth. Therefore, levels of motivation are
directly affected by future job possibilities (Goldsmith and Carter, 2010: 83).
Any successful and reward system will need to take into account these elements,
that’s why reward systems are much more than just bonus plans and stock options. While
they often include both of these incentives, they can also include awards and other
recognition, promotions, reassignment, non-monetary bonuses (e.g., vacations), or a simple
thank you (Murphy and Murphy, 2002: 198).

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5.6. MAIN TENDENCIES AND CHALLENGES OF THE INTERNATIONAL MANAGEMENT OF
HUMAN RESOURCES

According to PUCIK, THICHY & BARNETT (1992: 137-138), in order to achieve and
maintain a competitive advantage in a globalised environment, HR activities should be
focused in the development of the three key organizational competencies discussed earlier:
organizational learning, continuous improvement and competitive culture. At the same
time, the HR function needs to move from an administrative orientation to a strategic
orientation.
Also, for the authors MARQUARDT & ENGEL (1993: 17), the global economy,
technological advances, restructuring and changes in the values of the workforce are
creating for HR professionals enormous challenges, which can be observed in Appendix A.
According to these same authors, professionals in human resources must be able not
only to operate on a global scale as to work effectively on the myriad of different local
cultures they encounter. They need to learn what is best in every nation, in regard to human
resource development as well as the best in terms of technologies, ideas and visions of this
specialty as a whole. The successful professional should be able to integrate globally what
they practice locally. (MARQUARDT & ENGEL, 1993: 23).

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6. CONCLUSION

As stated earlier, to provide value to business, management activities in a modern

company should be focused primarily on three organizational skills that are particularly
important to maintain a competitive advantage:
 Organizational learning;
 Continuous improvement;
 Competitive culture.
We can deduce, then, that organizations today need to invest heavily in developing
these skills in their managers and employees seeking to achieve organizational excellence.
As probably the most important part of this investment, the HR department has to be
prepared for the changes that are occurring in the global workforce, that is every day more
diverse and also every day more needed of motivational policies that keep them loyal to a
company and help this to create a competitive advantage.
Concluding, organizations have also to look closely to the recruitment and selection
process, this is a cyclical activity, directly linked to the processes of rewarding, developing,
maintaining and monitoring people. A correct recruitment process is the first step to assure
a satisfactory work environment, which will reflect on an effective performance of the
internal customers, as well as external customers.

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7. RECOMMENDATIONS

As explained in this report, a correct recruitment process allied to efficient reward

systems can create a differential able to attract talents to the organization.
Being the recruitment and selection processes almost standardized among the
organisations, all the attentions turn to the reward/motivational systems.
It’ necessary to observe that organizations adopt systems of reward according to
their culture, targeting the following results:
 Increase their ability to attract, retain and motivate employees.
 Encourage personal contributions and, consequently, increase their
profitability.
 Not generate great impact on their costs.
So, to better understand the ways to accomplish a successful talent attraction and
retention program, it’s recommended the study of the following areas:
 Reward systems.
 Staff competences development.
 Managers monitoring.
 Technology updates.

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8. BIBLIOGRAPHY

ACUFF, F. International and domestic resources functions. Innovations in international

compensation. New York: ORGANISATION RESOURCES CONSELORS (sept.). 3- 5, 1984.

DOWLING, P.J. International and domestic personnel / human resource management:

similarities and differences. IN: ENDERWICK, Peter. Transnational Corporations and Human
Resources. Vol. 16 of United Nations Library of Transnational Corporations; Publishing
general John H. Dunning, Routledge: London 1993. 429 p.

MARQUARDT, M.J. & ENGEL, D.W. Global Human Resource Development. PRENTICE-HALL
1993. 320 p.

PORTER, M. AND. The competitive advantage of nations. London, Mcmillan 1990.

PUCIK, W.; THICHY, N.M.; BARNETT, C.K. Globalization and human resource management.:
creating and leading the competitive organization. New York: John Wiley & Sounds 1992.

Lankard, Bettina A. Resolving Ethical Dilemmas in the Workplace: A New Focus for Career
Development. 1991 <http://www.ericdigests.org/pre-9220/focus.htm>

The global transformations reader: an introduction to the globalization debate /edited by

David Held and Anthony McGrew. Malden, Mass. : Polity Press, 2000.

HUMAN RESOURCE MANAGEMENT A CONTEMPORARY APPROACH Fourth Edition Edited by

Ian Beardwell, Len Holden and Tim Claydon

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Best practices in talent management :how the world's leading corporations manage,
develop, and retain top talent /Marshall Goldsmith and Louis Carter, editors.. San Francisco,
Calif. : Pfeiffer ; Chichester : John Wiley [distributor], 2010.. xxx, 305 p. : ill. ; 25 cm..

Johnson, Mike.: Building and retaining global talent towards 2002.. Economist Intelligence
Unit, 1998..

The Cambridge handbook of expertise and expert performance /edited by K. Anders

Ericsson ... [et al.].. Cambridge : Cambridge University Press, 2006.. xv, 901 p. : ill. ; 27 cm.

Carter, Gary W.: Career paths :charting courses to success for organizations and their
employees /Gary W. Carter, Kevin W. Cook, and David W. Dorsey.. Chichester : Wiley-
Blackwell, 2009.. xiv, 159 p. : ill. ; 22 cm.

Murphy, Emmet C., Murphy, Mark A. (2002) Leading on the Edge of Chaos. New York:
Prentice Hall

Ahlrichs, Nancy S., 1952-: Competing for talent :key recruitment and retention strategies for
becoming an employer of choice /Nancy S. Ahlrichs.. Palo Alto, CA : Davies-Black Pub, 2000.

Ashby, Franklin C.: Embracing excellence :become an employer of choice to attract and keep
the best talent /Franklin C. Ashby, Arthur R. Pell.. Upper Saddle River, N.J. ; [England] :
Prentice Hall, c2001.. xvi, 368 p. ; 24 cm.

Thorne, Kaye.: The essential guide to managing talent :how top companies recruit, train and
retain the best employees /Kaye Thorne and Andy Pellant.. London : Kogan Page, 2006.. ix,
191 p. ; 24 cm.

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Branham, Leigh.: Keeping the people who keep you in business :24 ways to hang on to your
most valuable talent /Leigh Branham.. New York ; [Great Britain] : AMACOM, c2001.. xiii,
338 p. ; 24 cm.

Survey of Global HR Challenges: Yesterday, today and tomorrow. World Federation of

Personnel Management Associations (WFPMA), 2005.

Standley, Allan. Organisational Lives. 2010

<http://www.baylor.edu/content/services/document.php/39547.pdf>

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9. APPENDIX A
9.1. MAIN HR CHALLENGES
To mark the 10th anniversary of its bi-annual World Congress, the World Federation
of Personnel Management Associations (WFPMA) commissioned in 2009 a survey,
undertaken on its behalf by PricewaterhouseCoopers (PwC), on the current HR challenges
faced by HR professionals. HR professionals from 200 companies in more than 35 countries
were interviewed.
The survey was designed to collect information on challenges facing Human
Resources in 2009. To elicit informative contrasts, respondents were also asked about the
challenges faced three years before and about what the future might hold three years down
the road.
In the appendix section of this report we would like to demonstrate the main
conclusions reached by the survey.

Table 2: respondents were asked: “Please choose 3 areas that represent significant challenges for you today”.
(Source: Survey of Global HR Challenges: Yesterday, today and tomorrow)

Change management represents a particular challenge for personnel management

staff, as this expertise has generally not been a consistent area of focus for training and
development of HR professionals. This may also be the reason why it is cited as the
foremost issue as HR continues to attempt to help businesses move forward. An intensified

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focus on training may be needed to develop added competencies to deal with change
management (Survey of Global HR Challenges: Yesterday, today and tomorrow).
Leadership development also proves to be a big challenge. HR professionals continue
to wrestle with understanding the best ways to keep people in the pipeline and develop
leaders for future succession planning. Increasingly recognized as becoming strategic
business partners within their organizations, HR professionals are expected to provide the
essential frameworks, processes, tools, and points of view needed for the selection and
development of future leaders. Across the globe leadership development has been
identified as a critical strategic initiative in ensuring that the right employees are retained,
that the culture of the organization supports performance from within to gain market
position, and that managers are equipped to take on leadership roles of the future so that
the organization is viable in the long term.
According to the survey, measuring HR effectiveness is an interesting new top three
focus for HR as it highlights the profession’s need to measure results –not only in terms of
transaction management but also in terms of driving the business. HR professionals have
been questioned in the past regarding their business acumen. Utilizing metrics to determine
effectiveness is the beginning of a shift from perceiving HR’s role as purely an administrative
function to viewing the HR team as a true strategic partner within the organization. In fact,
the next section reports that survey participants believe a critical future issue for HR will be
organizational effectiveness – again supporting HR’s critical role as a strategic partner to
management.
Other important issues emerging from the survey include organizational
effectiveness, compensation, recruitment and availability of local labor, succession planning
and availability of local labor and learning and development.

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 Table 3: respondents were asked: “What are the HR challenges you were facing 3 years ago, what they are
today and what you believe they will be in 3 years”? (Source: Survey of Global HR Challenges: Yesterday, today
and tomorrow)

Change management and leadership development were, are and will be important
issues for HR professionals. Compensation has moved down the list of perceived challenges
while organizational effectiveness is expected to play a larger role in the years to come.
Where HR departments have traditionally focused on measuring their own effectiveness,
there is an evolving recognition that they can provide organizational value by measuring the
effectiveness of the entire business organization. The shift is significant as it represents
movement from simply counting the numbers hired to determining the ROI of collective and
individual hires on a long-term basis. Going beyond measuring turnover, this new approach
considers “bad” turnover and “good” turnover along with the overall cost of replacement
hires (Survey of Global HR Challenges: Yesterday, today and tomorrow).

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Chart 1: Percentage of population from a non-white ethnic group by region, England and Wales (Source: 2001
Census).

Chart 1 shows the degree of concentration of ethnic minority population. In London

28.8% of the population is from an ethnic minority. This demonstrates how cosmopolitan
and ethnically diverse the world’s metropolis can be.

Chart 2: Proportion of working age population employed, unemployed and economically inactive by ethnicity
and sex. (Source: 2001 Census).

Chart 2 demonstrates the employment rates among the most numerous ethnic
groups living in the United Kingdom.

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