Impact of Globalization on Human Resource Management in Australian Business Industry

Running head: HRM
Human Resource Management
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2HRM
Globalization focuses on the imbalance of labor demand and supply in many countries.
However, higher price in the labor market leads to decrease in labor demand by the
organizations. On the other hand, low salary is beneficial to increase the labor demand in the
market (Davidson et al., 2014). Due to globalization the income level of labor becomes
decreased while demand for the skilled employees becomes increased. On the other hand, huge
competition is another factor of globalization that makes a high demand for skilled labor and the
supply is low due to demographic issues. On the other hand, environmental and demographic
changes are the other impacts of globalization that lead the organization to change their
recruitment and selection process. This study deals with the impact of globalization on human
resource management in Australian business industry.
Globalization creates major challenges for the business industry includes labor demand,
supply, demographic changes and environmental changes (Hainmueller, Hiscox & Margalit,
2015). However, demographic changes are a big factor that leads the organization to increase
diversity in the organization. In the previous, the business organization does not allow working
the people who have any kind of disability. On the other hand, gender discrimination is another
part of that often see in business. Globalization focuses on women participation in every business
sectors that is called labor force diversity. As commented by demographic changes highlight
diversity and diversity alters the needs and potential of employees. Hence, changing
demographic profile a wider population highlights the importance of developing new strategies
by the organization based on the need of the country’s citizens. Changing environment is
another new challenge for human resource management in a country. However, Australian firms
are facing new demand and requirements due to the changing environment. Environmental
changes lead the human resource managers to cope up with the speed, which is difficult for the

3HRM
manager to adopt. However, environmental changes include political, social, economic and
technological changes. All these factors influence the HRMP. It is a great challenge for the
Australian business about how they adapt their workforce in a changing environment.
Environmental changes include the rise of knowledge economy, innovation imperatives,
changing technological paradigm and emergence of new skill (Hervas-Oliver, 2013). Apart from
this the global economic crisis is a big pressure for Australian firm to reduce cost along with
managing workforce.
On the other hand, critical imbalance is seen between the demand and supply of the
labor in Australian business industry due to the globalization (Beesley & Davidson, 2013). As
for example, it has been found the Australian hospitality industry has high demand for skilled
labor while the supply is low. Skill shortage is the major issue of HRM in Australian hospitality
sectors. Therefore, Australian tourism industry also faced challenges due to poor policy of the
human resource department during the recruitment and selection. Australian tourism and
hospitality sectors are the big examples that are facing skill shortage crisis in the recent years.
Hence, shrinking workforce created by the aging population is a big barrier for HRP to
incorporate new skill into their organization. It is patently obvious that HRP in Australian
business sectors will be stagnant if they do not put proper strategy to address the recent skill
shortage in the workplace.
Impact of globalization leads the HRM to understand that job role will not remain
unchanged. However, due to the shortage of labor skill, demographic changes and environmental
changes the HRP needs to focus on internal replacement and succession planning. Internal
replacement in workplace and succession planning should be the major focus of HRP in an
organization as it will help the HRM to deal with the current changes (Ward, 2016).