Contemporary Issues in Human Resource Development

Chapter 12

Contemporary Issues in Human Resource Development

Zabeda Abdul Hamid & AAhad M. Osman-Gani


In the current environment of rapid globalisation of economic activities, where most companies have to operate within a turbulent environment with increasing dependence on changing technologies and efficiently responding to changing customer demands, organisations are more pressured to maintain their competitive edge (Singh Soltani, 2010). Organisations themselves have modified the way they work in a boundary-less environment, where strategic alliances and new forms of networks are formed as ways of gaining competitive advantage (Osman-Gani & Rockstuhl, 2010).

Organisations are increasingly recognising the significant impacts of investments in human capital for continuous development of relevant competencies in maintaining their competitive edge. Superior talent is being recognised as the prime source of sustainable competitive advantage in high performance organisations. Organisations’ main priority is in human resources development (HRD) to ensure high productivity and performance, as well as to warrant their existence in the chaotic world (Evangalou & Karacapildis, 2007; Osman-Gani & Tan, 2004, 2009). Underlying this trend is the rapidly changing business environment and the growing need for effective global managers and professionals with multi-functional fluency, technological literacy, entrepreneurial skills, and the ability to operate in different cultures, structures and markets (Chambers, Foulton, Handfield-Jones, Hankin Michaels, 1998).

Within the new workplace, managers are demanding more from their employees and at the same time are looking at efficient HRD initiatives as means to maintain an effective workforce. Geographic boundaries are becoming less defined, and employees who are globally aware and culturally sensitive to the needs of increasingly techno-savvy and globalised clientele are in hot demand. Organisations are always on the look-out for ‘promotable’ employees who are not only skilled and knowledgeable in their own areas of work, but are also flexible in adapting to the needs of the external environment, especially with the increasing attention being paid to cross-cultural awareness and interests in environmental protection (Osman-Gani, 2010; Osman-Gani & Hashim, 2011).

To succeed in these endeavours, organisations are working hard to implement a variety of programmes that would help in developing employees who are efficient and effective in the changing workplace. These programmes are implemented with the objectives of attracting, retaining and developing high quality talents involving extensive orientation and socialisation programmes, training and succession planning where learning becomes the core of the HRD function.

This chapter discusses the contemporary HRD issues of: (a) Talent management focusing more on development, utilisation, and retention issues; (b) Knowledge management initiatives of acquisition, sharing and retention issues; (c) Sustainable development with emphasis on environmental awareness education and corporate social responsibility; and (d) Globalisation and cross-cultural HRD issues relevant to developing global managers and creating a culturally sensitive workforce for effective performance in an increasingly globalised business environment.

Talent Management & Development

There has been an increase in interest in the development, retention and utilisation of talent within the workplace, particularly due to the fact that human capital is now the core factor of an organisation’s success. The concept of Talent Management (TM) is identified as a collection of typical human resource development and management practices, functions, and activities specialist areas (Byham, 2001; Chowanec Newstrom, 1991; Heinen O'Neill, 2004; Hilton, 2000; Mercer, 2005; Olsen, 2000). However, it has to be realised that talent management is more than just recruiting, retaining and rewarding employees (Barlow, 2006). Managing talent is about trying to create a pool of employees who are highly capable, effective and promotable through the utilisation of talent development and talent retention. Furthermore, TM ensures that the right people with the right skills are in the right place and engage and focus on the right activities to achieve targeted business results (Bersin, 2008).

It is estimated that there are nearly 200,000 graduates of public and private universities as well as polytechnics and community colleges in Malaysia annually (Zabeda, 2009) and there is a need to tap into this pool of promising young talent that can be developed further for performance enhancements in the workforce. The Malaysian government has highlighted the issue of preparing the Malaysian workforce to face the challenges of the dynamic global environment and achieving the objective of 9th Malaysia plan. The 9th Malaysian Plan focused on HRD by increasing the nation’s capacity for knowledge and innovation as well as nurture a ‘first-class mentality’ among the workforce (Zabeda, 2009), whereas the 10th Malaysia Plan can be considered to be focusing on overall growth and development through partnerships as well as developing the workforce (Economic Planning Unit, 2010).

According to the 10th Malaysia Plan, a new economic model was necessary if Malaysia were to join the league of high-income nations and progress. Therefore, a change in the national economic strategy and public policy was required. The main themes presented in the 10th Malaysian Plan in the form of 10 main ideas are:

1.  Internally driven, externally aware

2.  Leveraging on our diversity internationally

3.  Transforming to high-income through specialisation

4.  Unleashing productivity-led growth and innovation

5.  Nurturing, attracting and retaining top talent

6.  Ensuring equality of opportunities and safeguarding the vulnerable

7.  Concentrated growth, inclusive development

8.  Supporting effective and smart partnerships

9.  Valuing our environmental endowments

10.  Government as a competitive corporation

From the 10th Malaysia plan, it can be seen that Talent Management would be covered under the 5th main idea which is in nurturing, attracting and retaining top talent. In the past, emphasis was given to the attraction of talents, but development and retention issues are becoming increasingly challenging issues for organisational management. Considering this, the chapter focuses on the following major issues:

Talent Development

Talent Development relates to the ways in which organisations recognise that employees are more than just workers and that their talents need to be enhanced in order to create competitive advantage. However, some organisations tend to focus on only a small pool of employees whom they might consider their talents. This practice would unwittingly segregate the majority of employees who may be retained and given some development opportunities but would not be given a thorough focus of personalised development provided to the elite group. According to Stainton (2005), TM should adopt a broad approach by recognising that everyone has the capability and potential to display talent through talent development. The talent development strategy should include the continuous enhancement of skills and knowledge that can be utilised within the organisation (O’Donoghue Maguire, 2005). Strategic HRD policies and strategies can play significant roles in the regard.

Many organisations are increasingly realising the implications of talent development, utilisation and retention, which are considered to be the most significant denominators behind the success or failure of any organisation irrespective of their level of growth and development (Alam, 2007; Osman-Gani, 2008). In the past, emphasis has been given on talent management (TM) mostly focusing on attraction/recruitment factors, while talent development (TD) and talent retention (TR) issues did not receive much attention. These are now becoming challenging factors for organisational leaders, and are receiving increasing attention from scholars, practitioners and researchers. Furthermore, the impending retirement of the baby boomer generation foresees severe shortages of talents globally. In fact, many organisations are already facing this critical issue of talent shortage. The Economist magazine mentioned that half of the top people at America’s 500 leading companies will leave the organisations in the next five years (Petro & Petty, 2007). As such, an increased focus should be given on TD, while stepping up efforts in retaining the existing talent pool. An empirical study found (a) significant effects of knowledge management on talent development, and (b) significant relationships existing among talent development and talent retention (Osman-Gani, 2008).

Organisational environments generally consist of approximately six main departments namely; distribution, finance, human resources, marketing, production and research and development (Wilson, 2005). The difficulty is that there are no quick and easy solutions for human resource development professionals. The key role of the human resource development specialist is not only to re-design the workflow and structure of the organisation to cope with changes, but also to advice on identifying the development needs of people and placing then in jobs where they can be trained and developed as needed. Furthermore, the issue of developing local talents compared to bringing foreign talents is also becoming a sensitive issue that is receiving concerns among some organisations.

With the initiatives taken in the 10th Malaysia plan, the Malaysian government has established Talent Corporation in January of 2011. Talent Corporation Malaysia Berhad ('TalentCorp') was established under the Prime Minister's Department to work closely and build partnerships with leading companies and government agencies to initiate and facilitate initiatives that will help the country meet its talent needs (TalentCorp, 2011). The key mission of Talent Corporation is to help attract foreign talent to Malaysia as well as assist Malaysian professionals residing abroad to return to Malaysia to contribute to the nation. With the Malaysian government implementing policies that would attract foreign talents into the country, it would be prudent to review the plans for developing local talents as well.

Talent Retention

Attracting talented employees is an important process that organisations have to consider. However, retaining talented employees in the workplace is even more crucial in a turbulent economic environment. According to Peterson (2005) it is incredibly frustrating to go through a long hiring process, employee training and providing other necessities, and then have the employee quit after two months. Retaining key organisational talent requires joined-up thinking, a clear business-driver link, and a good deal of thought and energy (Glen, 2006). Furthermore, retaining talented employees is beneficial to organisations as it allows employees to learn from each other, it allows talented staff to contribute to the organisation and it develops a talent pool in which a versatile organisation can utilise their skills and abilities.

There has been recent attention to the demands of the knowledge economy, the importance of human capital and the need to manage employees’ careers as well as to the rising costs of employee turnover. According to the Malaysian Employers Federation’s Executive Director, there are 785,000 Malaysians working overseas. Unofficially, the figure is well over 1 million, or even 1.5 million (Malaysia Today, 2011). Half of those residing overseas are in Singapore while the rest can be found mostly in Organisation for Economic Co-Operation and Development (OECD) countries such as the United States, Australia, Canada, New Zealand and the United Kingdom with more than half of them having tertiary education (NEAC, 2010) which is a considerable brain-drain. At the same time, the number of skilled expatriates working and residing in Malaysia has also reduced in the last few years (NEAC, 2010). Although there are about 2.5million unskilled foreign workers (both legal and illegal) in Malaysia, it is the skilled workforce that can help develop the talent among the local staff. This is a serious cause for concern as there is a need to retain talented locals from leaving to work in other countries and at the same time, try to attract and retain the talented expatriates Malaysia.

To attract and retain employees in the organisation, management should recruit them regardless of the professional’s race and gender. Rather, job characteristics and competencies should become the most important factor for talent retention (Osman-Gani, 2006). Some organisations make the mistake of offering a lucrative compensation package as the only way of retaining talents. Talented employees were found to look beyond the monetary terms towards the intrinsic values they obtain from their jobs and careers. Osman-Gani (2006) found in an empirical study that opportunity for skill development and career prospects are the key factors that talents look for in their long-term plans of staying with an organisation. The study shows the importance of some internal and external organisational factors influencing the talents’ retention decisions. According to Estiénne (1997), organisations that promote a life-long learning culture create a conducive environment for staff to develop their skills and this could be a pulling factor for talented staff to remain within an organisation. Furthermore, it is also the opportunity for an international exposure that influences many Malaysians to seek employment overseas (Jauhur, Yusoff, & Khoo, 2009). Many organisations are also formally approaching career development discussions with meetings being organised between employees and managers as a way to further develop the talents of employees (Zabeda, 2008). This could create a sense of employee involvement in their own career progression and could be a factor in the retention of staff.

Talent Utilisation

Talents bring the unique skills and abilities to organisations, and top management should take necessary measures to utilise these skills and competencies. Talents require opportunities to be displayed; and proper opportunities need to be provided for everyone to learn, grow and strive to fulfil their potential. Many companies are now realising the advantages of having a diverse workforce. An organisation with employees from various backgrounds and cultural diversity would be able to understand the various niches of the market. An example is when China’s electronic giant Haier was seeking Singaporean marketing experts as they could understand the China markets as well as be attuned to the Western markets due to Singapore’s open economic policies and fluency in the English language (Chan, 2007).

Talent Management Interventions

Some of the ways that are currently being employed to develop talents in the workplace is through orientation or socialisation programmes (Zabeda, 2008). Through this programme, new staff (both local and foreign) are given the opportunity to learn more about the organisation through formal or informal activities such as company initiation activities or informal gatherings with other staff. The orientation or socialisation programmes help develop an understanding of business strategy, goals, issues, opportunities, challenges, values and culture within the organisation which is also part of the talent development framework (Haskins Shaffer, 2010). This assists the staff to gain a clearer picture of the workplace as well as expectations on the staff that can give the avenue in developing their talent.