Based on the importance of HRM, describe the following trends affecting human resource management including: a.. v Abbreviation Definition HRM Human Resource Management HRBP Human Resour
Technology trends
In the current digital age, technology significantly influences the evolving landscape of human resource management (HRM), shifting many HR functions from professionals to automated systems Key technological trends include social media, mobile applications, gaming, cloud computing, and data analytics, which are transforming how HRM operates.
Figure 1 Statistics on social media recruitment of companies in 2022
(source: https://www.zippia.com/advice/social-media-recruitment-statistics/)
In 2023, a Zippia study revealed that 94% of recruiters leverage social media for recruitment, with LinkedIn being the most popular platform, utilized by 90% of recruiters Additionally, 55% of recruiters use Facebook, 47% turn to Twitter, and only 11% have begun using Instagram for hiring purposes.
HUMAN RESOURCE MANAGEMENT Trends Affecting HRM 1.2 Mobile applications
Figure 2 Statistics on organizations using mobile-enabled HRM
Mobile-enabled technology applications are increasingly being adopted worldwide, with a significant rise in their usage across various sectors In the realm of human resources, organizations are implementing diverse applications to streamline processes and enhance efficiency This trend reflects a broader shift towards digital transformation, as businesses recognize the importance of leveraging technology to improve operational effectiveness and employee engagement The growing reliance on mobile applications underscores the need for companies to stay updated with the latest technological advancements to remain competitive in the global market.
In today's workplace, employees increasingly rely on mobile devices during business hours, making mobile functionality a key factor for HR leaders seeking to modernize their systems beyond traditional desktops and laptops Tools such as Firstup, Beekeeper, Staffbase, and Poppulo centralize essential information for employees, enhancing accessibility Additionally, mobile-enabled HRM functions, including attendance tracking, internal communication, payroll management, talent acquisition, and performance monitoring, empower HR personnel to streamline operations effectively.
A comprehensive investigation by Statista, involving 1,892 organizations with a combined workforce of 22.2 million employees and contingent workers from 2019 to 2021, reveals that 57% of firms are integrating mobile functionalities into various HRM functions, including payroll, benefits, and performance monitoring, beyond just traditional check-in and check-out apps A notable trend is the increasing focus on enhancing internal communication through mobile applications within these companies.
Figure 3 Statistics on the effect of gamification on employees in HRM
(source: https://www.zippia.com/advice/gamification-statistics/)
In recent years, successful businesses have increasingly adopted gamification in employee training and work experiences to enhance productivity and engagement The gamification industry is expected to expand from $9.1 billion in 2020 to $30.7 billion by 2025, driven by HRM-focused gaming solutions like Knack, Gild, and My Marriott Hotel This innovative game by Marriott International simulates the hotel management experience, allowing candidates to design restaurants, manage inventory, train staff, and serve guests Research by GrowthEngineering in May 2021 indicates that gamified work experiences lead to an average 48% increase in employee engagement, with 70% of participants reporting positive outcomes.
Over 2,000 of the world's largest companies, including major players like Google, Facebook, Microsoft, Cisco, Deloitte, and McDonald's, are implementing gamification in their human resource management (HRM) strategies This innovative approach has led to a remarkable 22% increase in profitability, a 21% boost in productivity, and a 10% rise in customer satisfaction rates for these organizations.
1 Gamification: the application of typical elements of game playing (e.g., point scoring, competition with others, rules of play) to other areas of activity to encourage engagement with a product or service
HUMAN RESOURCE MANAGEMENT Trends Affecting HRM 1.4 Cloud computing
Figure 4 Statistics on the status of cloud computing in HRM
Over the past decade, cloud computing has transformed various business operations, particularly in the HR sector, by offering numerous advantages It enables recruiters and interviewers to access resumes and documents anytime and anywhere, facilitating a smoother hiring process Additionally, cloud computing allows HR managers to automate and restructure data-intensive tasks such as onboarding, timesheet submissions, performance reviews, payroll, and vacation requests This shift to digital storage not only reduces workload but also enhances accessibility, as all information is securely stored on a cloud server Following the pandemic in 2021, many companies have expedited their transition to cloud-based HR platforms, leading to a surge in innovative HR cloud service providers like HR Symphony, HR Cloud, Zoho People, and Bamboo HR.
In accordance with the report of Statistia, the global cloud service revenue from the human resource management segment in 2016 is nearly $15 billion The ISG survey of
260 companies worldwide found 46% using HR Cloud The findings were published as
Cloud computing offers on-demand access to a variety of computing resources—including applications, servers, data storage, development tools, and networking capabilities—via the internet These resources are hosted at remote data centers managed by cloud service providers, who charge a monthly subscription fee or bill based on usage According to the 2021 ISG Survey on Industry Trends in HR Technology and Service Delivery, 57% of organizations anticipate utilizing a subscription-based HR cloud solution by 2023.
Figure 5 Statistics on data analytics in HRM (source: https://www.grandviewresearch.com/industry-analysis/hr-analytics-market)
In recent years, the integration of data analytics into Human Resource Management (HRM) has become essential for enhancing organizational and employee productivity This evolution, known as HR Analytics, involves the collection of workforce data and key metrics through advanced analytics software such as Power BI, Tableau, Deel, Rippling, and Paycor By leveraging these tools, organizations can gain valuable insights into HR functions, driving informed, data-driven decisions.
According to the 2022 HR Analytics Market Report by Grand View Research, the global HR analytics market was valued at USD 2.7 billion in 2021 and is projected to grow at a compound annual growth rate of 14.3% from 2022 to 2030 More than 70% of executives view HR analytics as a top priority, with employee engagement (37% market share), recruitment (25% market share), and payroll & compensation (17% market share) being the key HR functions driving this focus.
3 Data analytics: the process of statistical techniques, algorithms, and problem-solving to identify relationships among data for the purpose of solving particular problems
HUMAN RESOURCE MANAGEMENT Trends Affecting HRM
Globalization trends
Figure 6 Statistics on globalization over decades from 1960 to 2020 (source: chart produced with data from https://www.macrotrends.net/countries/WLD/world/gdp-gross-domestic-product)
According to Our World in Data, globalization has significantly boosted the world's GDP, increasing from $1.392 trillion in 2016 to $85.105 trillion in 2020, with an annual growth rate of 3.47% Governments have facilitated this growth by reducing cross-border taxes and tariffs, establishing free trade areas, and promoting trade among nations Major multinational corporations, such as Apple, Amazon, Alphabet, Meta, and Tesla, have expanded their operations globally For example, Apple sources raw materials like gold from Peru and copper from Chile, assembles products in countries like China, Malaysia, and Thailand through partners like Foxconn and Pegatron, and distributes them via Apple Resellers.
According to PwC's 2022 annual report, the market capitalization of the world's 100 largest companies surged from $21.4 trillion to $31.7 trillion between March 2021 and the same year, marking a remarkable 48% increase in just one year This significant growth highlights the numerous opportunities for business success and expansion that globalization offers.
4 Globalization (in terms of business): refers to companies extending their sales, ownership, and/or manufacturing to new markets abroad
Table 1 Areas where HR faces challenges of globalization in 2017
(source: re-arranged from https://pdfs.semanticscholar.org/5225/0cb58b021a14f403ff4b7ace0c78f4ad32dc.pdf)
Areas that HRM faces challenges Agree Neutral Disagree
Globalization presents both opportunities and challenges for human resources management (HRM) According to a 2017 study by the International Research Journal of Business Studies, 72% of respondents identified cultural and normative differences as significant challenges, while 65% pointed to political influences, and 56% acknowledged difficulties in change management Effectively managing the human elements of globalization is a complex and demanding task for HR professionals.
HR managers of any company that expands abroad
Globalization has significantly transformed the recruiting landscape, enabling businesses to access a global talent pool rather than being limited to local labor markets This shift has been facilitated by social media and professional networking sites, allowing organizations to attract top talent and benefit from a diverse workforce Many companies, such as Apple and Samsung, have expanded their operations internationally, not only to reduce labor costs—Apple saves approximately $100 per iPhone by manufacturing in China—but also to explore new markets, with Samsung operating plants in countries like Vietnam, India, Brazil, and Indonesia.
Globalization has significantly intensified international competition, placing sustainability at the forefront of strategic challenges for HR leaders They must effectively coordinate a diverse workforce across the globe, leveraging advanced communication technologies to reduce costs and enhance productivity In response to this competitive landscape, organizations are increasingly adopting Strategic Human Resource Management (SHRM) to align their workforce with core business strategies, thereby optimizing their human capital.
HUMAN RESOURCE MANAGEMENT Trends Affecting HRM
Trends in how people work
According to The World Bank, global employment has transitioned from manufacturing to service jobs, rising from 39.4% in 2000 to 50.6% in 2020 Notably, the service industry employs a significantly higher percentage of the workforce in high-income regions, such as North America and Western Europe, where it reached 74.1% in 2020, highlighting the stark contrast in employment trends between different economic sectors.
Figure 7 Global on-demand workforce by country map in 2021
(source: https://data.worldbank.org/indicator/SL.EMP.SELF.ZS)
The shift towards service jobs, driven by globalization and technology, has led to the rise of on-demand work, which includes independent contractors, moonlighters, temporary workers, self-employed individuals, and freelancers According to Exploring Topics’ 2022 statistics, approximately 1.57 billion on-demand workers represent nearly 47% of the global workforce, with the highest proportions found in the United States (78%), United Kingdom (59%), Brazil (48%), and Pakistan (47%) The fastest-growing industries for on-demand work encompass accounting, customer service, information technology, and surprisingly, human resources.
On-demand working is an employment practice that allows workers to choose when and what to work on, aligning their efforts with company needs The freelance platform market is valued at approximately $3.39 billion, with major players including Upwork, Fiverr, Freelancer.com, PeoplePerHour, Amazon’s Mechanical Turk, and TaskRabbit This model enables companies to operate or expand their business based on on-demand labor; for instance, Uber relies entirely on independent contractor drivers, while Airbnb manages a vast lodging enterprise with significantly fewer traditional employees compared to established hotel chains like Hilton Worldwide.
As employers increasingly depend on extended workforces, human resources (HR) must adapt by developing personnel policies that address benefits and compensation for freelancers, as many countries have established relevant legislation HR managers are now required to act as talent brokers, effectively matching specific workers to tasks within designated timeframes Consequently, there is a growing focus on employees' knowledge, education, training, skills, and expertise This trend is particularly evident in large firms within service sectors such as IT, consulting, law, and healthcare, where human capital management is essential to meet high demands Additionally, roles like bank tellers, retail clerks, bill collectors, mortgage processors, and package deliverers now require a level of technological proficiency, reflecting the evolving nature of even routine jobs.
Uber's HR department faces the challenge of managing recruitment to address a low annual retention rate of just 4% They are responsible for training nearly 20,000 new drivers daily while simultaneously monitoring a global network of approximately 3.5 million drivers.
Workforce demographic & diversity trends
Globalization has led to an increasingly diverse global workforce, with the United States exemplifying this trend According to statistics from the U.S Bureau of Labor in 2022, the U.S workforce is projected to become even more diverse in the coming years, featuring a higher number of older workers, women, ethnic minorities, foreign workers, and non-traditional workers.
HUMAN RESOURCE MANAGEMENT Trends Affecting HRM
Table 2 U S Demographic groups as a percent of the workforce from 2002 to 2022
(source: https://www.bls.gov/cps/demographics.htm)
Diversity enhances business performance by driving innovation and creativity, leading to a sustained competitive advantage and increased returns A 2020 GlassDoor survey revealed that 67% of job seekers consider workplace diversity a crucial factor, while 50% of employers aspire to create diverse and inclusive environments.
Implementing diversity, equity, and inclusion (DEI) in business is a challenging endeavor Employers must focus on recruiting ethnically diverse candidates to meet legislative requirements, while HR managers need to foster an inclusive culture through training and development Additionally, creating a culturally neutral performance management system is essential Companies are also required to ensure equitable access to training opportunities, promotions, and fair compensation To navigate these complexities, many organizations are now hiring Human Resource Business Partners (HRBP) to guide their HR teams in enhancing DEI initiatives.
This article focuses on Nestlé as the chosen food and beverage company, providing a brief introduction before analyzing key HR challenges It ultimately identifies specific HR activities that can be transformed into competitive advantages, enabling Nestlé to effectively compete with other companies in the industry.
Brief Introduction
Nestlé S.A., the world's largest food and beverage company, was founded in 1866 by Henri Nestlé and formed through a merger in 1905 Headquartered in Vevey, Switzerland, Nestlé boasts over 2000 brands, offering a diverse range of products including baby food, bottled water, breakfast cereals, coffee, tea, confectionery, dairy, ice cream, frozen foods, pet foods, and snacks According to its 2022 Annual Report, Nestlé achieved total sales of CHF 94.4 billion, reflecting an 8.4% increase, with organic growth of 8.3%, representing 1.63% of the global food and beverage market.
HUMAN RESOURCE MANAGEMENT Company HRM Analysis 1.2 Organizational overview
Diagram 1 Nestlé's organogram (source:https://www.researchgate.net/publication/342262154_A_Case_Study_for_Human_Resource_Analysis_ of_Nestlé_Pakistan_Assessment_of_Performance_Management_Appraisals_Methods)
Nestlé, a global leader in the food and beverage industry, employs approximately 275,000 people across more than 186 countries With over 200 subsidiaries and 456 factories worldwide, the company has established a specialized organizational structure to effectively manage its extensive operations.
Nestlé's organizational hierarchy is straightforward and efficient, characterized by a Board of Directors overseeing a managing director (CEO), who maintains a principal-agent relationship with departmental heads This clear line of authority fosters a well-organized and harmonious work environment The simplicity of the structure minimizes managerial levels, enhancing role efficiency and duty execution Additionally, Nestlé's flexible organogram contributes to improved employee performance and overall productivity.
Problematical HR functions
Attracting and retaining talent in the Food and Beverage (F&B) industry presents significant challenges for Human Resource Management (HRM), particularly through performance appraisals The intense competition for skilled workers, coupled with the demanding physical and mental nature of the jobs and the generally low wages, exacerbates these issues Nestlé faces similar hurdles in Pakistan, highlighting the industry's ongoing struggle to maintain a competent workforce.
Diagram 2 Nestlé's recruitment process (source:https://www.researchgate.net/publication/342262154_A_Case_Study_for_Human_Resource_Analysis_ of_Nestlé_Pakistan_Assessment_of_Performance_Management_Appraisals_Methods)
The Recruitment and Selection process is crucial to a company's success, managed by the Centre of Expertise within the HR department It relies on effective communication from Business Partners, who outline the requirements and job descriptions for potential candidates across various departments Recruitment can be initiated due to budget discussions, employee resignations, or urgent needs, all of which require approval from the Managing Director (MD) For budgeted requests, the Divisional Head must complete a "Recruitment and Budgeted Form," detailing essential information such as the initiation date, the required start date for the new employee, the candidate profile, and the job description.
Nestlé's human resource department actively promotes job vacancies on the company website to maximize outreach and attract potential candidates globally They meticulously review applications, selecting approximately eight to ten top resumes for consideration These shortlisted candidates are then presented to divisional heads, who recommend individuals for interviews, ultimately leading to the selection of the most suitable candidates for the positions.
When selecting candidates, Nestlé evaluates a combination of knowledge, personality, and motivation A strong academic record is essential, reflecting intelligence, commitment, and hard work Additionally, candidates must possess a sharp analytical mind and the drive to thrive in a competitive environment While academic results are important, they are not the sole criterion for selection; relevant experiences such as previous jobs, assignments, language skills, and significant extracurricular achievements also play a crucial role in the evaluation process.
Nestlé Pakistan seeks candidates who can effectively identify and analyze problems, explore various options, and draw reasoned conclusions Beyond professional expertise, they value individuals with a genuine passion for their field, an open mindset, and a commitment to acquiring new skills Ideal applicants are dynamic communicators who actively listen, understand diverse perspectives, and articulate their ideas clearly, both verbally and in writing They look for negotiators who can navigate complex situations and collaborate with a variety of partners Leadership qualities, the ability to inspire others, and a balance of self-confidence and realism are essential traits Additionally, candidates should possess a positive work attitude, demonstrate resilience under pressure, and maintain objectivity in self-assessment and evaluation of others.
The arrival of a vacancy does not guarantee that qualified candidates are available or interested in that position, as applicants may seek different roles Without effective workforce planning, Nestlé risks facing worker shortages, which can have long-term consequences To avoid this, a strong collaboration between human resource management and the finance department is essential for analyzing the organization's needs in terms of workforce size, skills, and experience Additionally, Nestlé should review past experiences to understand how workforce numbers fluctuate with changes in business strategy.
Furthermore, the bigger problem lies at the appraisal method which Nestlé uses to retain their talent or evaluation of employees there is Performance Development Rating
The PDP Rating at Nestlé assesses success through two key dimensions: 'what' and 'how.' The 'what' focuses on the achievement of individual goals, while the 'how' evaluates employee behaviors, soft skills, and teamwork abilities This comprehensive rating informs rewards such as bonuses and promotions, reinforcing the company's high-performance culture Although the Performance Development Review (PDR) is the sole appraisal method utilized at Nestlé, employee feedback indicates potential inefficiencies The PDR is conducted by departmental heads who evaluate the 'what' and 'how' aspects across various groups, which may limit opportunities for personalized employee assessments.
Nestlé can enhance the credibility and objectivity of employee performance evaluations by implementing methods such as graphic rating scales and 360-degree feedback Additionally, maintaining a data storage system to track performance changes over time will allow Nestlé to analyze trends and identify patterns Utilizing demand and supply diagrams for workforce management can highlight periods of excess or shortage, helping to pinpoint when vacancies may attract strong candidates Furthermore, it is essential to consider the impact of fringe benefits, motivation, and training on employee satisfaction and dissatisfaction at Nestlé.
HUMAN RESOURCE MANAGEMENT Company HRM Analysis
Potential competitively advantageous HR activities
Nestlé has the potential to transform its HR activities in training and development, as well as staffing, into a competitive advantage in the global food and beverage industry, as evidenced by successful case studies in Nestlé Malaysia.
Nestlé's recruitment process utilizes various channels, including their website and offline applications, with a focus on hiring local talent who possess valuable local knowledge In Malaysia, the company prioritizes employing local individuals across all manufacturing sites Their staffing strategies also encompass internship programs, management trainee opportunities for fresh graduates, and a commitment to gender balance The 2-year management trainee program is designed to cultivate future leaders within the organization, offering promising career paths for new graduates Nestlé places a strong emphasis on talent retention by providing numerous benefits and fostering a positive working environment for its employees.
Nestlé prioritizes a gender-balanced workplace, having introduced Key Performance Indicators (KPIs) in 2016 to enhance gender balance through succession planning and the development of female talent The company is committed to ensuring at least one woman occupies key positions and actively supports government initiatives aimed at increasing women's participation in decision-making roles within the corporate sector.
By 2018, Nestlé aims to achieve gender balance within its workforce To enhance employee engagement and retention, the company offers a range of training programs, including Unconscious Bias Training, a mentoring program, Coaching Skill Pills Workshops, and the Nestlé Leadership Framework, along with the Leadership & Personal Effectiveness Program and more.
The Unconscious Bias Training aims to enhance awareness of diversity and improve communication across genders, influencing hiring, promotion, and succession management decisions From 2015 to 2016, 329 employees participated in this training, helping them identify biases and find ways to eliminate them Meanwhile, Nestlé's Leadership & Personal Effectiveness Program (LPEP) seeks to strengthen the bond between teams and leaders, boosting employee engagement A total of 296 middle and senior managers completed the program, and a post-program survey revealed that 100% of line managers noticed an increase in participants' capabilities Additionally, the relationship between staff and leaders has significantly improved, resulting in higher employee engagement.
In 2016, the management trainee program saw the graduation of 21 trainees, who were subsequently offered roles within the company That same year, 28 new trainees joined the program, which is designed to provide a full-time position as a future leader at Nestlé upon successful completion of the two-year training period.
Table 3 Nestlé Malaysia’s workforce (source: https://www.academia.edu/35557222/Human_Resources_Management_of_Nestlé_Malaysia )
According to Nestlé's corporate report, the employee turnover rate from 2014 to 2016 remained below 3%, indicating a healthy workforce environment Notably, this rate decreased by 0.89%, reaching a low of 1.33%, which highlights the success of the company's retention programs.
Table 4 Nestlé Malaysia’s workforce demographics(source: https://www.academia.edu/35557222/Human_Resources_Management_of_Nestlé_Malaysia)
HUMAN RESOURCE MANAGEMENT Company HRM Analysis Based on the employee data above, 35% of its employees are women, and the percentage of female managers grew from 38.2% in 2015 to 39.3% from 2015 to 2016
In 2016, women comprised 37% of Nestlé's senior leadership team, reflecting the company's commitment to achieving a gender-balanced workplace With a significant reduction in employee turnover rates—from 2.22% in 2014-2015 to 1.33% in 2015-2016—Nestlé is on track to meet its key performance indicators (KPIs) and aims for gender balance by 2018 Furthermore, the company emphasizes training and development to support this initiative.
Table 5 Training description received by Nestlé Malaysia’s employees
(source: https://www.academia.edu/35557222/Human_Resources_Management_of_Nestlé_Malaysia )
In 2016, Nestlé Malaysia, a leading player in the food and beverage industry, employed over 5,550 individuals and invested RM 11 million in training and development programs The company conducted 30 training sessions, engaging 1,269 participants and accumulating a total of 12,388 training hours To enhance their training and development initiatives, HR leaders could integrate the Knowledge Management System (KMS) and Human Resource Information System (HRIS).
A Knowledge Management System (KMS) is essential for organizations as it serves as a centralized knowledge vault, facilitating easy access to valuable information for both new hires and existing employees This system enhances knowledge sharing and management, ultimately improving organizational efficiency and collaboration.
2 Human Resource Information System (HRIS): a system that provides a centralized repository of employee master data that the human resource management group needs for completing core human resource processes
The study identifies four key trends shaping Human Resource Management (HRM): technology, globalization, on-demand working, and workforce demographics & diversity These trends have prompted HR practitioners to adopt new HRM principles to effectively respond to their impacts In terms of technology, practices such as social media recruiting, mobile-enabled HR, gamification, cloud-based HRM, and talent analytics are being utilized Globalization is addressed through Strategic Human Resource Management (SHRM), while on-demand working highlights the importance of human capital Lastly, the introduction of Human Resource Business Partners (HRBP) reflects the growing emphasis on workforce demographics and diversity.
This section of the study provides an overview of Nestlé as a prominent food and beverage company, followed by an analysis of two case studies The first case focuses on Nestlé Pakistan, highlighting issues with an inefficient performance appraisal method that adversely affects recruitment and employee retention The second case examines Nestlé Malaysia, where the integration of Knowledge Management Systems (KMS) with Human Resource Information Systems (HRIS) is identified as a potential competitive advantage, particularly in staffing and training and development.
In conclusion, Human Resource Management (HRM) is poised for rapid evolution, influenced by global trends and crises in contemporary society This study aims to further explore the dynamic changes in HRM, highlighting its significant impact on organizations worldwide.
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