Challenges for Hrm

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Executive Summary

This essay considers how changes in the external environment of organisations have altered the world of work. Australia is currently experiencing a period of economic growth. But some new challenges have appeared. Australian organisations are facing skill shortages and an aging workforce. This shortage has been addressed by introduction of new technology in workplaces and influx of immigration workers. Organisations in Australia, similar to those in other developed economies, are also struggling with changing workforce demographics, changing nature of work, incorporating and utilizing the rapid advances in technology, and addressing globalisation-related challenges such as increased competitive pressures, outsourcing and off-shoring, and a global workforce that places higher importance on cross-cultural issues and skills.

Human Resource Management involves the productive use of people in an organisation to collectively achieve the organisation's strategic business objectives. Human resource management also involves employer employee relationship and the satisfaction of the individual employer needs (Stone 2006, p. 4). It is an essential function of an organisation. It has become more prominent in recent years as organisations have to improve their productivity and international competitiveness. In modern times, no organisation can afford to rest on their laurels; to be competitive in the global marketplace, organisations need to rethink their strategies towards human resources.

A human resource manager must consider the nature of external and internal environmental influences before electing a particular course of action. Internal environmental influences involve the factors that are found within the organisation such as the organisational strategies, organisational culture, organisational structure and organisational systems (Stone 2006, p. 24). A variety of external factors influence the identification of human resource issues and the development of HRM policies. Some of the external factors facing organisations are changing nature work force, technology, globalisation and labour force demographics.

Changing Nature of Work

In Australia, there was a change in Government due to the recent federal elections. The past Government of John Howard had introduced Australian workplace agreements (AWA's). AWA is an agreement made between an individual employer and an individual employee in which the terms and conditions of the employment contract between the employer and employee are determined. The new Government led by Kevin Rudd intends to abolish workplace agreements and introduce common law contracts. These changes would significantly affect the way a HR Manager operates in an organisation. HR managers are responsible for drafting out the contracts of all employees and such changes in the laws are bound to have serious implications to the nature of their work.

Organisations to survive in this competitive age have to employ the most educated and most suited workforce to compete. Thus the employees have higher salary expectations, opportunities to participate in organisational decision making, and the need to be treated fairly and with respect. In addition, more employees are concerned about the effects of work demands and work hours on their family and on their personal lives (Burke & Ng 2006, p.86).


Technology impacts on HRM by changing the nature of jobs and skills required to do them. Developments in machineries and computers have resulted in the elimination of workers and in due course increase the productivity of organisations. Those in the manufacturing and production are affected most through the replacement of workers with automatic machines. The same burst of technological advancement has also drastically changed the way other skilled work is done. For example, the digital technology has resulted in the use of AutoCAD in designing and building houses, MS Project in...
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