With increasing labour flexibility in global context, international HRM has become extremely significant for an organisation. Unlike domestic HRM, when organisations were focused only on the domestic regulatory framework, today international HRM has to ensure compliance to various regulatory frameworks. This is necessary in order to avoid any legal hassles in the country where organisation has its office.
Organisations today are focusing on gaining maximum advantage from the labour market flexibility. However, he process of using labour market flexibility for organization’s advantage in turn has impacted various international HRM practices. Some of the impacts are:
Issue of low paid work: wage rationalization has become one major HRM challenge for the organisation. For example, n organisation having its operation in countries such as Canada, and China has to differ its wages, because minimum wage offered in China is much lower as compared to what is offered in countries such as US or Canada. Such situation creates a conflicting scenario for the organisation. On one hand, organisation takes an advantage in terms wage differentiation and saves operational cost; on the other hand this conflicting scenario impacts the HRM practice. HR department of the organisation has to draft separate policies for country based operations, which at times is a cumbersome process. Also this sort of labour flexibility at times lands an organisation in trouble. For example, Apple is often accused of paying lowest possible wages to the workers who are employed in its supplier’s factories (Bae& Rowley, 2002: 402-428). Thus Apple does successfully takes an advantage of low cost labour in China, but in this process has created various unsatisfied parties, who are not satisfied with the way Apple handles its international HRM practices.