HUMAN RESOURCE MANAGEMENT

Trends In Human Resource Management

Trends in Human Resource Management

Introduction

The industrial base of the US economy has shifted away from manufacturing to service industries. Whereas 27.3 percent of US workers were employed in manufacturing industries in 1970, in 1998 manufacturing represented only 14.9 percent of the US workforce (US Census Bureau, 1999). Business globalization has allowed US firms to enter markets previously inaccessible, but has also fueled mergers and acquisitions that require extensive HR expertise for success. These changes represent opportunity, as environmental conditions are causing changes in the way HR is conceived in the organization and managed on a day-to-day level.

The economic boom in the USA has meant labor shortages, as unemployment rates dropped from 7.5 percent in 1992 to 4.5 percent in 1998 (US Census Bureau, 1999). Legal and social barriers to employment continue to erode, which has helped to ease labor shortages. For example, the female labor force participation rate doubled between 1970 and 1998 from 31.5 percent to 63.7 percent (US Census Bureau, 1999). However, organizations must seek out diversity, and HR must properly manage it. Diversity management also must consider the aging of the US workforce. In 1980, 42.2 percent of the workforce was aged 20-34 compared with 33.7 percent in 1998. In 1980, 34.9 percent of the workforce was aged 35-54 compared with 47.9 percent in 1998 (US Census Bureau, 1999). New immigrants arrived at a rate of 3.8 per 1,000 US population between 1991 and 1997 (US Census Bureau, 1999), and immigration rates promise to hold steady. Congress even expanded the H1-B “guest worker” visa program to allow US businesses to recruit skilled workers from other countries.

US firms show wide disparities between pay received by workers and executives, as executive compensation continues to rise (Hansen, 1999a). The decline in union membership from 20.1 percent of the workforce in 1983 to 13.9 percent in 1998 (US Census Bureau, 1999) has undoubtedly reduced workers' ability to accrue greater compensation gains during the most recent economic expansion.

Underlying many of the changes in the US economy is an information technology revolution. Many, including US Federal Reserve Board Chairman Alan Greenspan, believe that the current economic boom in the USA has resulted from production efficiencies created by technology, including the personal computer and Internet (Roberti, 2000). Meanwhile, as technology makes communication and thus coordination easier, competitive business pressures appear to be producing more “decoupled” organizations, as manifested in outsourcing, contingent workforces, and the “virtual organization”.

Labor shortages

A shortage of information technology (IT) professionals and the relentless growth of the economy resulted in a tight US job market in 1999-2000. A study released in April 2000 predicted that US employers would need about 1.6 million new IT workers in the next year and that 850,000 of these positions would go unfilled (Information Technology Association of America, 2000).

Recruitment

HR managers are responding to labor shortages by stepping up recruitment efforts. In the 2000 Society of Human Resource Management (SHRM)/BNA Survey on HR Priorities, 64 percent of respondents indicated that recruitment would be ...