10 New Trends in HRM
The HR function has changed more in the last twenty years than in the previous fifty. The shift has three drivers: technology (digitalisation, AI), workforce expectations (engagement, well-being, purpose) and strategy (HR as a source of competitive advantage rather than an administrative cost centre). This chapter surveys the trends a working HR manager is expected to know about today.
| Force | What it changes | Representative trends |
|---|---|---|
| Technology | The how of HR work | e-HRM, HRIS, HR analytics, AI in hiring, digital learning |
| Workforce expectations | The why people work | Engagement, wellbeing, work–life balance, purpose, DEI |
| Strategy | The what HR contributes | Strategic HRM, talent management, employer branding, ESG |
10.1 Strategic Human Resource Management (SHRM)
Strategic Human Resource Management is the deliberate alignment of HR practices with the organisation’s strategy so that people decisions become a source of competitive advantage. The shift from HRM to SHRM, articulated by Schuler & Jackson and others in the 1980s, asks every HR practice to answer one question: how does this help the firm win? (schuler2007?)
10.1.1 Three Approaches to SHRM
| Approach | Core claim |
|---|---|
| Universalistic (“best practice”) | A bundle of high-performance work practices works across firms — selective hiring, extensive training, performance pay, employee voice (Pfeffer) |
| Contingency (“best fit”) | Practices must match the firm’s strategy — cost leadership needs a different HR system than differentiation |
| Configurational (“bundles”) | Practices reinforce one another in coherent bundles; the bundle, not any single practice, drives results |
10.1.2 Linking HR to Strategy
A typical SHRM cycle aligns the four classic HR sub-systems — selection, development, appraisal and rewards (the Michigan matching model) — to the firm’s competitive strategy. A cost-leader’s HR system rewards efficiency; a differentiator’s rewards creativity; a service firm’s rewards customer empathy.
10.2 International Human Resource Management (IHRM)
IHRM extends HR practice across national boundaries. The classical typology distinguishes parent-country nationals (PCNs), host-country nationals (HCNs) and third-country nationals (TCNs). Perlmutter’s four staffing orientations — ethnocentric, polycentric, regiocentric, geocentric — capture how a multinational chooses among them.
| Orientation | Staffing pattern | When it works |
|---|---|---|
| Ethnocentric | Key positions filled by parent-country nationals | New subsidiary; tight control needed |
| Polycentric | Host-country nationals run host-country operations | Local responsiveness required |
| Regiocentric | Talent moves within a region | Regional integration strategy |
| Geocentric | Best person from anywhere fills any role | Truly global firm; talent scarcity |
A separate set of issues — expatriate management, cross-cultural training, repatriation, compensation across currencies, dual-career partners — is the operational core of IHRM. A deeper treatment appears in chapter 14.
10.3 Talent Management
Talent management is the integrated set of processes by which a firm attracts, develops, motivates and retains the people it most needs to succeed. The phrase emerged from McKinsey’s 1997 War for Talent study and has now displaced “succession planning” in most large firms.
10.3.1 The Talent Management Cycle
| # | Step | Activity |
|---|---|---|
| 1 | Plan | Identify pivotal roles and the talent they need |
| 2 | Attract | Employer branding; sourcing; selective hiring |
| 3 | Onboard | Structured induction, fast first-year integration |
| 4 | Develop | Stretch assignments, mentoring, coaching, executive education |
| 5 | Engage and retain | Recognition, growth opportunities, fair pay |
| 6 | Transition | Succession into bigger roles or graceful exit |
10.3.2 The Nine-Box Grid
The most common talent-review tool plots people on two axes — current performance and future potential — to produce nine boxes. The grid forces a conversation that pure performance ratings cannot — the high-performer who is at her ceiling, the high-potential who is currently underperforming, and so on.
10.4 Employee Engagement
Engagement is the emotional and intellectual commitment an employee makes to the work and the firm. It is measurable — Gallup’s Q12, Aon’s six-element framework, Utrecht’s UWES — and consistently linked to productivity, customer satisfaction, safety, retention and profit.
| Dimension | What the employee feels |
|---|---|
| Cognitive | “I understand what I am supposed to do and why it matters” |
| Affective | “I feel proud to work here and connected to my colleagues” |
| Behavioural | “I go beyond the minimum; I am willing to put in discretionary effort” |
The classical drivers of engagement — clarity of role, capability for the role, meaningful work, recognition, fair pay, growth opportunities and a respected manager — are universal across surveys.
10.5 Employee Wellbeing and Work–Life Balance
Wellbeing programmes have moved from peripheral welfare (Republic Day gifts, picnics) to strategic people investments (mental health, financial wellness, ergonomic stipends). Five dimensions of wellbeing now shape modern programmes.
| Dimension | Typical programme |
|---|---|
| Physical | Annual health checks, gym access, ergonomic furniture |
| Mental / emotional | EAP (Employee Assistance Programmes), counselling, mindfulness apps |
| Social | Team events, ERGs (employee resource groups) |
| Financial | Financial-literacy workshops, retirement-planning support |
| Career / purpose | Development conversations, alignment of work with values |
Work–life balance — and its modern descendants work–life integration and flexible work arrangements — is now table stakes for white-collar talent.
10.6 Quality of Work Life (QWL)
The QWL movement, traced to Eric Trist and the Tavistock studies, frames the workplace itself as a unit of design. Richard Walton’s eight conditions of QWL — adequate compensation, safe and healthy conditions, opportunity to develop human capacities, opportunity for growth and security, social integration, constitutionalism, work and total life space, social relevance of work life — remain the standard checklist.
10.7 Diversity, Equity and Inclusion (DEI)
The DEI agenda has moved from compliance (“we do not discriminate”) to inclusion (“we actively make every voice count”).
| Concept | Meaning |
|---|---|
| Diversity | The mix of people — gender, age, ethnicity, ability, education, thinking style |
| Equity | Fair access to opportunity, with adjustments for systemic disadvantage |
| Inclusion | The lived experience that one’s voice and contribution matter |
A diverse hire that does not feel included quits within months; an inclusive culture that lacks diversity stagnates. Both halves are necessary.
10.8 Digital HR — e-HRM, HRIS and HR Analytics
Digital HR has three layers — each generation builds on the one below.
| Layer | What it does | Examples |
|---|---|---|
| HRIS — Human Resource Information System | Digitises and automates HR transactions | Payroll, attendance, leave, employee records |
| e-HRM | Self-service portals and process automation | Online appraisal, e-recruitment, e-learning |
| HR Analytics / People Analytics | Uses data to predict and explain workforce outcomes | Attrition prediction, hiring quality, engagement drivers |
Mature analytics teams move along a four-stage curve — descriptive (what happened?) → diagnostic (why?) → predictive (what will happen?) → prescriptive (what should we do?).
10.9 Artificial Intelligence in HRM
AI is becoming a regular part of HR work, with both promise and risk.
| HR sub-process | AI application | Risk to manage |
|---|---|---|
| Recruitment | Resume screening, video-interview analysis, chatbots | Algorithmic bias, opacity |
| Selection | Game-based assessment, predictive scoring | Validity across demographic groups |
| Learning | Adaptive learning paths, content recommendation | Over-reliance on past patterns |
| Performance | Sentiment analysis, productivity dashboards | Surveillance creep |
| Engagement | Pulse-survey analysis, attrition risk modelling | False positives, employee distrust |
The principle most HR leaders now insist on is “AI-augmented, not AI-decided” — the algorithm proposes; a human decides.
10.10 Green HRM
Green HRM is the integration of environmental management into the HR function — using HR practices to drive a firm’s sustainability agenda (renwick2013?).
| HR sub-process | Green application |
|---|---|
| Recruitment | Hiring for environmental awareness; green employer branding |
| Training | Environmental induction; sustainability skills |
| Performance | Environmental KPIs in appraisals |
| Compensation | Bonuses linked to environmental outcomes |
| Engagement | Volunteer days, green ERGs, employee-led sustainability projects |
Green HRM sits inside the broader ESG (Environmental, Social, Governance) movement, which is now a board-level concern in most large firms.
10.11 Hybrid and Remote Work
The post-2020 shift to remote and hybrid work has reshaped almost every HR sub-process.
| Issue | What HR does about it |
|---|---|
| Remote selection and onboarding | Video assessment; digital induction; mailed equipment kits |
| Performance management without daily contact | Outcome-based goals; weekly check-ins; clear deliverables |
| Equity between remote and in-office staff | “Proximity bias” in promotions and recognition |
| Wellbeing in isolation | Virtual community; structured meeting design; right-to-disconnect policies |
| Cyber security and data | Device policies; VPN; classified-data handling rules |
| Tax and compliance across locations | Where the employee works affects tax, social security, employer registrations |
10.12 The Gig and Contingent Workforce
Platforms (Uber, Swiggy, Upwork) and project-based hiring have produced a workforce that does not fit the classical employee model. HR’s people strategy now has to cover full-time employees, part-timers, contractors, freelancers, gig workers, and outsourced teams as one talent ecosystem. Legal questions — who is an employee? Who pays for what? — are now as important as motivational ones.
10.13 Outsourcing and HR Shared Services
Routine, transactional HR work — payroll, benefits administration, first-line query handling — is increasingly delivered through HR Shared Services Centres or outsourced to specialist providers. This frees HR business partners for strategic work and applies industrial-engineering logic to back-office HR.
| Typically outsourced | Typically retained in-house |
|---|---|
| Payroll, statutory compliance | Strategy, talent reviews |
| Benefits administration | Senior hiring |
| Background checks, drug testing | Culture, ER, change management |
| Learning content, LMS hosting | Leadership development design |
| Employee help-desks | Sensitive investigations and grievances |
10.14 Employer Branding
Employer branding is the firm’s reputation as an employer, communicated to potential and current employees through every touchpoint — careers website, Glassdoor reviews, social media, on-campus presence, exit interviews. The Employee Value Proposition (EVP) — what we offer in return for your work — is the message at the centre of the brand. EVPs typically cover compensation, benefits, careers, work environment and the company itself.
10.15 Employee Experience (EX)
Borrowed from customer experience in marketing, the employee experience idea treats every interaction an employee has with the firm — from first job advert to the exit interview — as part of one designed journey. The aim is to engineer a coherent, positive experience at each moment that matters (offer, first day, first project, first promotion, parental leave, return-to-work, exit). Jacob Morgan’s three-environment model — physical, technological, cultural — is widely cited.
10.16 Lean and Agile HRM
Methods born in operations and software development are now applied inside HR.
| Approach | What it brings to HR |
|---|---|
| Lean HR | Removes waste from HR processes — fewer forms, fewer hand-offs, shorter cycle times |
| Agile HR | Iterative design of HR products — pulse surveys instead of annual; sprints for HR projects; cross-functional pods |
| Design Thinking | Empathy with employee personas; rapid prototyping of HR solutions |
10.17 Knowledge Management and Learning Organisation
Peter Senge’s learning organisation (chapter 1) and Nonaka & Takeuchi’s knowledge-creating company converge in modern HR practice as knowledge management — the deliberate capture, storage, transfer and creation of knowledge across the firm. HR’s role is in the people dimension of KM: incentives to share, communities of practice, after-action reviews, internal mobility that moves know-how with the person.
10.18 Practice Questions
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| Orientation | Description | ||
|---|---|---|---|
| (i) | Ethnocentric | (a) | Best person from anywhere fills any role |
| (ii) | Polycentric | (b) | Talent moves within a region |
| (iii) | Regiocentric | (c) | Host-country nationals run host operations |
| (iv) | Geocentric | (d) | Parent-country nationals fill key positions |
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- Three drivers of new HRM: technology, workforce expectations, strategy.
- SHRM approaches: best practice (universalistic), best fit (contingency), bundles (configurational).
- Perlmutter’s four IHRM orientations: ethnocentric, polycentric, regiocentric, geocentric.
- Talent management cycle: plan → attract → onboard → develop → engage / retain → transition. Tool: nine-box grid (performance × potential).
- Engagement dimensions: cognitive, affective, behavioural. Drivers: clarity, capability, meaning, recognition, fair pay, growth, manager.
- Wellbeing dimensions: physical, mental, social, financial, career / purpose.
- DEI triad: Diversity (mix) — Equity (fair access) — Inclusion (lived experience).
- Digital HR layers: HRIS → e-HRM → HR Analytics. Analytics curve: descriptive → diagnostic → predictive → prescriptive.
- AI in HR: useful in recruitment, selection, learning, performance, engagement; principle — AI-augmented, not AI-decided.
- Green HRM applies sustainability to recruitment, training, performance, compensation, engagement.
- Hybrid-work issues: selection, performance, equity, wellbeing, security, tax / compliance.
- Other trends: gig workforce, HR shared services / outsourcing, employer branding (EVP), employee experience (EX), lean / agile HR, knowledge management.