The Impact of Globalization on Human Resource Planning in Australia

This report provides a comprehensive analysis of the challenges to Human Resource Planning (HRP) in the face of globalization, with a specific focus on the Australian business context. The report begins with an executive summary and table of contents, followed by an introduction that establishes the significance of globalization in the current market scenario. It explores the causes of globalization, its impact on the labor market, and its effects on Australia, including the abolition of protectionism, changes in the manufacturing base, and the growth of the service sector. A key focus is on scenario planning, which considers external factors such as global financial instability, nuclear proliferation, cyber revolutions, food and energy security, climate change, and global poverty. The report examines how these factors affect labor demand and supply. It also highlights the need for HRP to adapt to changing job roles and the substitution of labor for technology. The report includes references to support its analysis, offering valuable insights into how businesses can navigate the complexities of a globalized world. Overall, the report emphasizes the importance of proactive HRP and strategic planning to address the challenges of globalization and ensure business sustainability.

Running head: HUMAN RESOURCE MANAGEMENT
Human Resource Management
Name of the Student
Name of the University
Author’s note

1HUMAN RESOURCE MANAGEMENT
Executive Summary
In this report, a brief discussion on the Human Resource Planning on the challenges to
Labor demand and supply that poses a threat by Globalization will be critically discussed. In this
report, discussion on environment and demographical changes that is effecting jobs and changes
that going to affect the organization will also be discussed. Focus on scenario planning that will
account major changes in Australian business will be discussed in this report.

2HUMAN RESOURCE MANAGEMENT
Table of Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................2
Cause of Globalization....................................................................................................................3
Globalization and Labor Market......................................................................................................4
Impact of Globalization on Australia..............................................................................................4
Abolish of Protectionism.............................................................................................................5
Change in Manufacturing Base....................................................................................................5
Growth in Service Sector.............................................................................................................6
Scenario Planning............................................................................................................................6
Global Financial Instability..........................................................................................................6
Nuclear Proliferation....................................................................................................................7
Cyber Revolution.........................................................................................................................7
Food Security...............................................................................................................................7
Energy Security............................................................................................................................7
Climate Change............................................................................................................................8
Global Poverty.............................................................................................................................8
Reference.........................................................................................................................................9

3HUMAN RESOURCE MANAGEMENT
Introduction
Globalization is dominating the world and is somewhat inevitable in the current market
scenario, global economy constitutes of both national and international economic institution.
Globalization is channeled to labor market in various ways. Among them, one of the ways is
affecting tremendously the labor demand and supply. Due to increased competition on the output
market, there might be slight increase in the elasticity of labor demand via scale effect or
substitution effect where a firm expands its productivity and want to set additional input.
Scenario planning determines and distinguishes between long-term trend and uncertain elements.
Once they are figured and put together to create different scenarios that showcase what is known
and what isn’t and how it going to effect the environment. In this report, we will discuss the
setbacks that are affecting labor demand and supply in Australian market and Human Resource
Planning focus on the scenario planning which will take account of external changes in
Australian market.
Cause of Globalization
Globalization result in promoting competition but also can be relate with non-competitive
nature in the international market. Thus, a threat arises for the government facing difficulty with
behavior over another country that can affect its economy.
 Economic growth of a country craves for more imports and expands the capacity to
produce more for export. Thus generating enough saving to invest both domestically and
internationally to meet demand of investment associated with economic growth.
 Innovation in technology such as Information technology and communication technology
generates high financial and economical degree between different countries.

4HUMAN RESOURCE MANAGEMENT
 Fall in transportation cost is the major factor in recent boom in globalization.
 Liberation of economic activity trade and investment both nationally and internationally.
Globalization and Labor Market
Condition of domestic labor market plays an important role such as job roles such as
nurse, retail worker, and teacher pay roles are affected by domestic condition. Globalization has
deep-rooted effect in market as it encourages substitution of labor for technology and capital in
industrialized countries as it helps the highly skilled workers and not the unskilled. Outsourcing
works to low wage countries. Relocating firms from high pay to low pay countries will help cut
cost. Globalization effect on trade and labor market is mixed but has broader effects on business
and not only just on trade price on labor market. Trade have grown in the recent decade more
than economic growth giving rise to more number of multinational companies in recent times
which is bringing foreign investment and international flow of capital.
Impact of Globalization on Australia
The impact of globalization in the Global market and in Australia can be pointed in three
sources of tension.
First, it reduces trade barriers and increases opportunities for high skilled labors because of
investment but it also reduces opportunities for low or semi skilled labor in the market. Second,
globalization creates a conflict with domestic preference of service and goods for example
safety and health standard imposed by certain country on certain good will no longer stay
validate as good under World Trade Organization are treated as equal no matter its nation of
origin. Third, countries with most social insurance and protection with an open economy finds it

5HUMAN RESOURCE MANAGEMENT
hard to manage social insurance and safety nets due to globalization. Globalization can be
debate over many economic and social issues. Australia particularly has always maintained
openness in its industrialized economy but tried not to be tied up in “fortress Australia”
mentality. Australia cannot isolate itself from the rest of the world in the time of globalization if
they want economic development in the country. Globalization often raises concern of racism in
the global scenario due to some counties extreme monopoly of isolationism and nationalism
(Butler et al., 2016).
Abolish of Protectionism
Australia always have the monopoly of buying less and selling more to other countries
and also have severe restriction on foreign investment but due to rise of unemployment and
inflation it lost it competitive advantage. Thus government forces business to compete in the
global market since then Australia have open doors to foreign investments as a result significant
increase in the quality of lifestyle have shown in Australian. Globalization have given chance to
foreign firm to set business in Australia which dragged out the inefficiency in the economy and
made the market competitive and innovative thus improving the lives and lifestyle of many
(Sparrow, Brewster & Chung, 2016).
Change in Manufacturing Base
Manufacturing which need high labor intensity shifted to Low wage country due to
globalization, company finds it irrelevant to hold manufacturing unit in Australia as the same
work can be done easily and at cheaper rate in Low wage country due to advancement in the
transportation sector thus it can be cheaply produced and supplied in the market. High wage
labors in Australia have resulted into shrunk of GDP of Australia by high percentage. Australia’s
high tech manufacturing has risen as well as have seen the rise in jobs. For example, Australia

6HUMAN RESOURCE MANAGEMENT
has the largest unit of Boeing manufacturing unit outside USA that is developing through R&D
and sales (Eaton, 2017).
Growth in Service Sector
Service sector of Australia have seen tremendous growth in the recent year. In the recent
decade, Australian wholesale trade, financial institution, retails trade, education, healthcare and
tourism communication etc. Due to Globalization and consistent growth of the country’s GDP
Australia has been the benefactor. In a recent study according to Forbes 6 out of the 10 largest
company of Australia are finance service and bank. This also resulted in strengthen of Property
of the country, strong infrastructure, confidence of the consumers etc. Australia’s geography
plays a major role to build a thriving relationship with Asian Market (Boella & Goss-Turner
2013).
Scenario Planning
Scenario planning identifies organizations long-term goal and plans. It involves different
aspects such as system thinking. As Australia enters the 21st century, global shift is challenging
Australian business and determining Australia’s step in to the International market with
partnership with global clients to maintain peace and prosperity so that it will enhance
sustainability in the future. To discuss the current global changes facing Australia we have to
look at some big problems (Kavanagh & Johnson, 2017).
Global Financial Instability
Size, Complexity and Interconnection of financial market of privet sector challenges the
ability to monitor and properly regulate by National government. To solve the problem financial

7HUMAN RESOURCE MANAGEMENT
stability board and Basel Committee are leading by examples keeping Australia out of recession.
International agenda addressed by National government is necessary to avoid future crisis.
Nuclear Proliferation
Nuclear weapons avoidance agreement between US and other countries do not solve the
entire problem. The destruction capabilities of nuclear weapon are incomparable. That is why
Australia is trying to remain active in the arms race (Ruttan & Thirtle 2014).
Cyber Revolution
New technology have enhanced the productivity and the prosperity of any organization
with that it has also threaten the security of an infrastructure of both country and corporation thus
requires constant vigilance both at home and office through cyber cell is required. Australia will
remain vigilant by addressing economic and political factors, including global terrorism and
poverty (Hanna & Oliva, 2015).
Food Security
Growing population giving rise to need of food security in Australia loss of agricultural
land will be a major drawback, being the largest exporter of agricultural product, Australia’s
landscape and tropical environment helps it to produce more and more amount. In the current
market of globalization, Australia will be a major and leading name in the global market and will
help other countries by solving their food scarcity.
Energy Security
Food, Energy and Climate all the three are interrelated growing demand of energy
resource in the country from major concern. Renewable energy resource is severely scare so use
of natural resource is very important and prominent (Ehrenberg & Smith, 2016).

8HUMAN RESOURCE MANAGEMENT
Climate Change
Climate change is the major concern of developed countries and thus required attention
both national and global action. Climate change has resulted into major economic and social
trouble thus addressing the issue of climate change is important for Australia.
Global Poverty
Today in this world, more than a third of the population lives on less than Two dollar.
Trade policy and aid are the core elements to reduce poverty globally it will result in good for
global economy, regional stability and Australia (Cahuc, Carcillo & Zylberberg, 2014).
These are the reason that are big problem globally and requires deep attention of the
country to tackle. HR should be planning scenario to solve the problem. Australia have a diverse
economy and being shaped into a vibrate economy due to globalization, thus influencing all the
business. Business cannot survive without implementing global perspective in the competitive
market but how globalization is going to affect a business varies from sector to sector. Terrorism,
Legal reason and culture could the other phenomenons that influence a business in the global
world. Transportation and communication made consumers aware and selective. So far
globalization have efficiently and competitively made economy for Australia which is driving
the country to provide better service in both mining and service industry. Innovation and
accumulation knowledge through learning is the key to success in business.

9HUMAN RESOURCE MANAGEMENT
Reference
Boella, M., & Goss-Turner, S. (2013). Human resource management in the hospitality industry:
A guide to best practice. Routledge.
Cahuc, P., Carcillo, S., & Zylberberg, A. (2014). Labor economics. MIT press.
Eaton, J. (2017). Globalization and human resource management in the airline industry.
Routledge.
Ehrenberg, R. G., & Smith, R. S. (2016). Modern labor economics: Theory and public policy.
Routledge.
Hanna, R., & Oliva, P. (2015). The effect of pollution on labor supply: Evidence from a natural
experiment in Mexico City. Journal of Public Economics, 122, 68-79.
Kavanagh, M. J., & Johnson, R. D. (Eds.). (2017). Human resource information systems: Basics,
applications, and future directions. Sage Publications.
Ruttan, V., & Thirtle, C. (2014). The role of demand and supply in the generation and diffusion
of technical change (Vol. 21). Routledge.
Sparrow, P., Brewster, C., & Chung, C. (2016). Globalizing human resource management.
Routledge.

10HUMAN RESOURCE MANAGEMENT
The challenges to labour demand and supply posed by globalisation, and environmental and
demographic changes, means that organisations can no longer assume that jobs will remain
unchanged for long periods and that Human Resource Planning only needs to focus on internal
replacement charts and succession planning. To remain relevant, HRP must focus on scenario
planning which takes account of the major external changes facing Australian businesses.’
Discuss.