DOI: https://doi.org/10.62204/2336-498X-2023-4-1

ECONOMICS

IMPACT OF GLOBAL CHANGES AND DIGITALIZATION

ON HUMAN RESOURCE MANAGEMENT SYSTEM

Nataliia Bieliaieva,

Ph.D. in Economics, Associate Professor,

State University of Trade and Economics, Ukraine,

nswork@ukr.net; ORCІD: 0000-0001-8833-1493

Annotation. The paper investigates the impact of global changes and digitalization on human resource management system. Based at the international experience it is researched that international companies have distinctive characteristics in HRM due to the various cultural, economic, and legal disparities among the countries in which they operate. When transitioning to an international level, companies must adhere to the rules of the international business game. It was stated that research by the “Deloitte” company has confirmed the impact of globalization on human resource management in Ukraine. It was formulated main tasks in HR Management, that are basic to the modern big business conduction, and on the base of it characterize the main trends of HRM digitalization. Among the main issues in the HR field, the need for developing future leaders and transferring knowledge to them is identified. It is described how digitization has a significant impact on the main HRM processes and formulated recommendations for the effective use of digital technologies in HRM system.

Keywords: global changes, digitalization, globalization, human resource management system, HRM, HRM system, HR capital, personnel management, employment, labor market, HR field, HRM processes.

Problem statement. The impact of global changes on international business and HR management systems is a crucial concern in today’s world. In the conditions of rapid development of digital technologies, personnel management is also undergoing significant changes. Changes in technology, market globalization and digitalization, political dynamics, and diverse cultural differences require companies to adapt to these new conditions and develop effective strategies for managing their HR capital. Digital technologies allow automating and optimizing many personnel management processes, as well as increasing the efficiency of interaction between employees and management.

Over the past 10 years, significant changes have occurred in the global business landscape. These changes encompass company mergers, acquisitions, and the reevaluation of intercompany relationships, rendering businesses more competitive on the international market. These transformations have also led to the establishment of overseas company branches, where both local and foreign employees work. This has necessitated the development of new HRM approaches that account for the diversity in global economic development, cultural differences, religious beliefs, values, social structures, and expectations.

The research objective. The purpose of this article is to study the impact of global changes and digitalization on human resource management system and developing recommendations for the improving use of digital technologies in this process.

Literature review. Strohmeier S. [18] in his work references general literature on digital organizations to develop a terminology and typology of digital human resource management. The terminology and typology clarify the concept of digital human resource management and related concepts, uncover digital human resource management as an evolutionary advancement of previous conceptualizations of technology-based human resource management, and provide a conceptual basis for future work on digital human resource management.

Mohan T. [12] critically analyzes Digital HR in terms of where it is now (degree of alignment between external demands and internal capabilities), where it should be (future-focused HR technology strategy), and how it can reach there (implementation road map). As an example, Al-Alavi A.I. and others [1] discover the factors related to human resource (HR) digital transformation (DT) in Bahrain during coronavirus disease 2019 (COVID-19) and to analyze the impact of e-human resource management (e-HRM) on organizational performance. Johnson R. and others [8] have also presenting interesting research about investigating how hospitality and tourism organizations can use electronic human resource management (eHRM) and artificial intelligence (AI) to help recruit and select qualified employees, increase individual retention rates and decrease the time needed to replace employees.

It’s interesting to note, that in 2011 E.Parry [13] in his own research was presenting results from a large-scale survey across 12 countries showed that e-HRM may help HR to increase its value by becoming more strategic, but found no evidence of cost savings due to reductions in HR headcount. This suggests that organizations are using e-HRM in order to redeploy HR practitioners from transactional work to more strategic and value-added activities. However, in 2023 Parry E. and Battista V. examine what the evidence is in relation to the impact of emerging technologies on work and the role of the human resource (HR) function in helping employees and organizations to navigate these changes. There are lots of existing researches in HR field, however it’s always arisen new approaches on the base of continuous globalization changes, that is way the problem is still relevant.

Main results of the study. When transitioning to an international level, companies must adhere to the rules of the international business game. This entails managing diverse employees with varying knowledge and skills who collaborate together. Specialized management strategies are required to optimize personnel diversity for the creation of competitive products and services that can compete both locally and globally. For example, research conducted by major American companies indicates that organizations with diverse workforces generally achieve better results [13].

International companies have distinctive characteristics in HRM due to the various cultural, economic, and legal disparities among the countries in which they operate [7]. For instance, people from different countries may respond differently to managerial actions and decisions. Additionally, disparities in salaries, working conditions, and regulations may exist in different countries. Understanding these differences and adjusting management strategies accordingly is crucial. All these aspects pertain to how managers perceive and interact with their personnel in international companies.

The concept of globalization significantly influences various aspects of international business. It leads to increased competition for product quality, pricing, and market adaptation, while also promoting higher levels of knowledge and technology. Globalization offers numerous opportunities for development, such as access to different industries and resources, increased foreign investments, and cost savings through economies of scale. Information has become a key resource for achieving success on global markets. Consequently, strategic management and marketing are of paramount importance, and multinational companies must develop personnel management skills.

Globalization affects all facets of international business. It leads to changes in industry, finance, economy, politics, and information. The movement toward multinational operations brings substantial changes to the global economic structure, shifting towards a global distribution of resources. This process is driven by the interaction between productive forces and the nature of production relations [7]. New technologies impact economic relations and contribute to the development of modern approaches in international business, new products, relationships between sellers and buyers, and competitive strategies.

Research by the “Deloitte” company has confirmed the impact of globalization on human resource management in Ukraine. According to the study’s results, most managers wish to improve the field of human resource management and the personnel potential of their companies. Only 3% consider their HR programs international, while 34% believe that they need substantial changes, and 25% consider these changes radical [4].

Main tasks in HR Management, that is basic to the modern big business conduction (Table 1).

Table 1

Main tasks in HR Management

Main tasks	Characteristics
Training and Development •    Identify training needs within the organization and develop training programs accordingly. •    Implement continuous learning initiatives to enhance employee skills and competencies. Workforce Planning •    Analyze current workforce trends and anticipate future staffing needs. •    Develop succession plans to ensure a pipeline of talent for key positions. Employee Relations •              Mediate and resolve conflicts between employees and between employees and management. •              Foster positive employer Compensation and Benefits Administration •    Develop and administer competitive compensation and benefits packages. •    Conduct regular salary reviews and ensure compliance with legal regulations. Health and Safety Compliance •    Implement health and safety programs to ensure a safe working environment. •    Stay updated on relevant occupational health and safety regulations and compliance requirements. Diversity and Inclusion Initiatives •    Develop and implement strategies to promote diversity and inclusion in the workplace. •    Monitor and assess the effectiveness of diversity and inclusion programs. Employee Engagement and Satisfaction •    Implement initiatives to enhance employee engagement and job satisfaction. •    Conduct employee surveys and gather feedback to identify areas for improvement. Conflict Resolution and Employee Counseling •    Provide counseling and support to employees facing personal or professional challenges. •    Develop and implement conflict resolution strategies to maintain a positive work environment. Policy Development and Implementation •    Develop and update HR policies in accordance with legal and organizational requirements. •    Communicate and ensure the implementation of HR policies across the organization. Labor Law Compliance •              Stay informed about changes in labor laws and regulations. •              Ensure organizational compliance with labor laws in all HR practices. Employee Records and Information Management •    Establish and maintain accurate and confidential employee records. •    Implement efficient systems for managing HR information and documentation. Succession Planning •    Identify key positions within the organization and develop plans for succession. •    Provide training and development opportunities for employees in line with succession plans. Employee Recognition Programs •    Develop and implement employee recognition programs to acknowledge achievements and contributions. •    Foster a culture of appreciation and acknowledgment within the organization. Remote Work Policy Implementation •    Establish and communicate policies and guidelines for remote work. •    Provide support and resources to ensure the success of remote work arrangements. Advisory Role to Management •    Provide strategic HR advice to organizational leadership. •    Collaborate with management to align HR strategies with overall business goals. Talent Acquisition and Recruitment	•    Develop and implement strategies for attracting and recruiting qualified candidates. •    Conduct job analyses and define job requirements to facilitate effective hiring processes.
Employee Onboarding and Orientation	•    Design and oversee onboarding programs to integrate new employees into the organization. •    Provide orientation sessions to familiarize new hires with company policies, culture, and expectations
Performance Management	•    Establish performance appraisal systems to assess employee performance and set performance goals. •    Provide feedback and coaching to employees to enhance their performance and professional development.

performance and professional development.

Source: data based on the processing sources [4; 12; 14-15]

If to connect presented information, so the main trends of HRM digitalization are:

• automation and optimization of HRM processes. Digital technologies make it possible to automate such processes as personnel selection, performance evaluation, career management, training and personnel development. This frees up the time of personnel department employees for more creative and strategic work.
• personalized approach to HRM. Digital technologies make it possible to accumulate and analyze large volumes of data about employees. This allows HR personnel to gain better insights into employee needs and motivations, and to develop more personalized HR programs.
• development of new forms of interaction between employees and management. Digital technologies allow creating new forms of interaction between employees and management, such as chatbots, virtual offices, and social networks. This allows to increase the efficiency of communication and cooperation.

Among the main issues in the HR field, the need for developing future leaders and transferring knowledge to them is identified. Another crucial issue is employee motivation. The importance of managing the execution of strategic tasks and changing leadership “rules of the game” is also emphasized [4]. These issues indicate the necessity of implementing global practices and innovations in personnel management in Ukraine, as our enterprises must adapt to global trends in this field.

The multifaceted exploration of contemporary challenges and opportunities in HRM has revealed the imperative for organizations to redefine their strategies in the face of rapid technological advancements, globalization, and evolving workforce expectations. The key tasks identified in talent acquisition, employee experience, agile HR practices, data-driven decision-making, cultural diversity, leadership development, employee wellbeing, cybersecurity, and strategic alignment underscore the breadth and complexity of responsibilities within the realm of HRM, so:

1. Enhancing labor productivity.
2. Increasing the qualification and requalification of employees.
3. Creating a positive workplace atmosphere.
4. Fostering a creative environment and supporting employees’ creative ideas.
5. Leveraging individual talents, with a particular focus on this aspect.
6. Adapting personnel to innovations and changes.
7. Aligning employees’ personal goals with the company’s objectives.
8. Maintaining unity and cohesiveness within the team.

Evaluating the effectiveness of HRM involves measuring the costs and benefits associated with HRM programs to compare their outcomes with enterprise performance indicators. It also requires assessing the effectiveness at the individual employee, management structure, and company management system levels. Such assessment typically demands a systematic approach and benchmarking against competitors and company objectives [5].

Some countries employ assessment centers for evaluating management personnel; however, such centers may have shortcomings and do not guarantee error-free outcomes.

HR management in international enterprises requires consideration of cultural differences, fair treatment of employees, and the utilization of expectancy theory. Work positions should align with the cultural peculiarities of the region where the company is located.

Managers worldwide use rewards to motivate their personnel, which can be monetary compensation or non-monetary recognition methods. However, cultural differences can affect which reward systems are most suitable in various countries [8]. For instance, in Japan, Korea, and Taiwan, individualism is not popular, so individual reward systems may not always work effectively. Measures such as salary increases, bonuses, or stock options might be more effective in Western environments.

On a global scale, knowledge and skills among employees are on the rise, particularly in countries like India and China. This is accompanied by increased labor mobility. Unfortunately, increased human mobility leads to higher epidemic risks, increasing healthrelated costs for workers and affecting government and company budgets. Moreover, there is a shortage of skilled workers in developed countries. To adapt to changing market conditions, organizations use flexible approaches in social-labor relations and employment. Investing in personnel and developing employee skills are key factors in competitiveness.

These factors impact HRM in Ukraine across companies of different sizes and industries [17]. They are interrelated, and changes in one aspect affect others. Demographic challenges and global economic changes significantly influence personnel management, particularly in the competition for skilled workers. Technological advancements and climate change alter the organization of work positions and demand new approaches.

So, digitization has a significant impact on the main HRM processes, in particular:

• personnel selection. Digital technologies allow the use of such selection methods as online testing, video interviews, and social network analysis. This makes it possible to increase the efficiency of selection and find the most suitable candidates.
• assessment of labor efficiency. Digital technologies allow the use of such evaluation methods as electronic monitoring of working hours, evaluation of work results using quantitative indicators. This makes it possible to more objectively evaluate the efficiency of the employees.
• career management. Digital technologies allow the use of such tools as talent management systems and career advisors. This allows employees to better understand their opportunities and develop their careers.
• staff training and development. Digital technologies allow the use of such forms of education as online courses, virtual training centers. This allows employees to learn at a time and place convenient for them.

Based on that, it can be formulated recommendations for the effective use of digital technologies in HRM system:

• develop a strategy for digitalization of personnel management. This strategy should define the goals and objectives of digitization, as well as the resources that will be needed for its implementation.
• introduce digital technologies gradually. It is important to conduct thorough testing of digital technologies before their large-scale implementation.
• to ensure the training of employees in the use of digital technologies. Employees must have the necessary knowledge and skills to effectively use digital technologies.

Conclusions and recommendations. The influence of global changes on international business significantly affects HR systems both in Ukraine and worldwide. Issues related to developing future leaders, motivating employees, executing strategic tasks, and adapting to changes in leadership require the implementation of global practices and innovations in personnel management. Effectively managing personnel in a global environment necessitates flexibility and readiness to adapt to technological and demographic transformations, considering global trends and business challenges.

Crucially, the digitalization recognizes not merely as a disruptor but as an enabler of innovative practices. The convergence of technology, globalization, and evolving workforce expectations presents organizations with unprecedented opportunities to cultivate resilient, adaptive, and thriving work environments. It calls for a paradigm shift in how organizations perceive and approach personnel management, emphasizing the strategic alignment of HR practices with broader organizational goals. Digitization has a significant impact on personnel management. It allows you to automate and optimize personnel management processes, increase the efficiency of interaction between employees and management, and develop more personalized personnel management programs. For the effective use of digital technologies in personnel management, it is necessary to develop a strategy for digitalization of personnel management, introduce digital technologies gradually and ensure the training of employees for their use.

References:

1. Al-Alawi, A.I., Messaadia, M., Mehrotra, A., Sanosi, S.K., Elias, H. and Althawadi, A.H. (2023), “Digital transformation adoption in human resources management during COVID-19”, Arab Gulf Journal of Scientific Research, Vol. 41 No. 4, pp. 446-461. https://doi.org/10.1108/AGJSR-05-2022-0069
2. Autor, DH, Levy, F. and Murnane, RJ “The skill content of recent technological change: An empirical exploration”, Q J Econ, (2003), Vol. 118 No. 4, pp. 1279-1333, doi: 10.1162/003355303322552801.
3. Banu, S. R. (2019). Hr digital transformation. Journal of The Gujarat Research

Society, 21(13), 946–951

4. Berkery, E., Morley, MJ, Tiernan, S. et al. “On the uptake of flexible working arrangements and the association with human resource and organizational performance outcomes”, Eur Manag Rev, (2017), Vol. 14 No. 2, pp. 165-183, doi: 10.1111/emre.12103.
5. Fitzgerald, I., Hardy, J. and Martinez, LM “The Internet, employment and Polish migrant workers: communication, activism and competition in the new organisational spaces”, New Tech Work Employ, (2012), Vol. 27 No. 2, pp. 93-105, doi: 10.1111/j.1468005X.2012.00279.x.
6. Gigauri, I. (2020). Effects of covid-19 on human resource management from the perspective of digitalization and work-life-balance. International Journal of Innovative Technologies in Economy, 4(31). doi: 10.31435/rsglobal_ijite/30092020/7148
7. Jesuthasan, R. HR’s new role: rethinking and enabling digital engagement, Strategic HR Review, (2017), Vol. 16 No. 2, pp. 60-65, doi: 10.1108/SHR-01-20170009.
8. Johnson, R., Stone, D., & Lukaszewski, K. (2020). The benefits of e-HRM and

AI for talent acquisition. Journal Of Tourism Futures, 7(1), 40–52. doi: 10.1108/jtf-02-

2020-0013

9. Liboni, L.B., Cezarino, L.O., Jabbour, C.J.C., Oliveira, B.G., & Stefanelli, N.O. (2019). Smart industry and the pathways to HRM 4.0: implications for SCM.

Supply Chain Management: An International Journal, 24(1), 124-146. doi: http://doi. org/10.1108/SCM-03-2018-0150

10. Makridakis, S. The forthcoming Artificial Intelligence (AI) revolution: Its impact on society and firms, Futures, (2017), Vol. 90 pp. 46-60, doi: 10.1016/j. futures.2017.03.006.
11. Marler, JH and Parry, E. Human resource management, strategic involvement and e-HRM technology, Int J Hum Resour Man, (2016), Vol. 27 No. 19, pp. 2233-2253, doi: 10.1080/09585192.2015.1091980
12. Mohan, Thite (2022) Digital human resource development: where are we? Where should we go and how do we go there?, Human Resource Development International, 25:1, 87-103, DOI: 10.1080/13678868.2020.1842982
13. Parry, E. (2011). An examination of e-HRM as a means to increase the value of the HR function. The International Journal of Human Resource Management, 22(5), 1146–1162. doi: 10.1080/09585192.2011.556791
14. Parry, E. and Battista, V. (2023), “The impact of emerging technologies on work: a review of the evidence and implications for the human resource function”, Emerald

Open Research, Vol. 1 No. 4. https://doi.org/10.1108/EOR-04-2023-0001

15. Stahl, G. K., Brewster, C. J., Collings, D. G., & Hajro, A. (2020). Enhancing the role of human resource management in corporate sustainability and social responsibility: A multi-stakeholder, multidimensional approach to HRM. Human Resource Management Review, 30(3), 100708.
16. State Statistics Service of Ukraine: Official site. Electronic resource. Access mode: http://www.ukrstat.gov.ua/
17. Stone, DL, Deadrick, DL, Lukaszewski, KM et al. “The influence of technology on the future of human resource management”, Hum Resour Manage Rev, (2015), Vol. 25 No. 2, pp. 216-231, doi: 10.1016/j.hrmr.2015.01.002
18. Strohmeier, S. (2020). Digital human resource management: A conceptual clarification. German Journal of Human Resource Management, 34(3), 345-365. https:// doi.org/10.1177/2397002220921131
19. Schwertner, K. (2017). Digital transformation of business. Trakia. Journal of Sciences, 15(1), 388–393.