Multinational workforce challenges
Question:
Discuss about the Organizational Resilience and Human Capital Strategy.
ArcelorMittal is a leading steel manufacturing and mining company. It has over 260,000 employees from over 60 countries and with subsidiaries in 20 countries across Europe, America, Middle East, Far East and Africa (Chawla & Joshi, 2011). For such a big company with multinational employees of different cultures, races and varying background, recruitment of workforce to suit the needs of the company as expected at the top of management can prove to be quite challenging. This particularly becomes interesting given that similar workforce results maybe expected across all company’s satellites regardless of the differences in work attributes and beliefs across the world. The challenge is to come up with a recruitment plan that will ensure that hired workers best suit the requirement at local level while delivering to achieve common goals set at the top of the management.
ArcelorMittal faces challenges of being overstaffed and understaffed at the same time. Biggest challenge facing employment at ArcelorMittal is automation, according to the company’s 2015 integrated report. While the company needs to look for ways to reduce its staff, it also suffers dilemma in that it needs to develop in-house skills and hire external expertise in order to achieve arising strategic goals. The company has excellent in-house skills but it doesn’t have all talents need to achieve certain objectives. The company is overstaffed in general in comparison with the current supply demand for steel in their European and North American markets. However, need to make strategic hires for adequate coverage in all areas is a good idea (Othman, 2009). In-house skills and talent development is the ultimate initiative, in the wake of reduced external recruitment, to make adequate coverage in senior positions as well as for succession plans. To fill up for positions left void upon retirements of senior staffs, identification of individuals with right potential is a key step.
Over the past few years, ArcelorMittal has been faced with challenges regarding welfare of its workers upon its announcement of plans to retrench some of its employees. Due to increasing competition from other steel producers, its sustainability across its peripheries is reported to be a big challenge. Demand forecasting, if well put in place would have predicted that the company will not require several employees (Sinha, Pandey & Varkkey, 2017). This information would help the company to control recruitments. Demand and supply of labor in this company is in somewhat uncertain state after dynamic technical, management and business changes created a wave that swept across the human resource aspects of this company.
Automation and staffing dilemmas
ArcelorMittal is an international company with great reputation worldwide, given its presence across several parts of the world. This is particularly pointed to the fact that it presented great value to quality and productivity even when it enjoyed what was considered as massive dominance in steel production, before it faced competition from companies from giant economies like China. The company’s structure that promotes collaboration for innovation, diversity oriented workforce, high performance work systems and design-led innovations is the key driver towards shaping the organizational image of this company (Ayne, McDonald & Hamm, 2013). Clear codes of business conducts to enhance high standards of behavior in dealing with employees, suppliers and other partners have created an impression of a high profile organization. Development of community based projects, community engagement and the economic contribution to development in different parts of the world that enjoy its presence have contributed positively towards the company’s image (Cock, Lambert& Fitzgerald, 2013). This makes easier for the company to attract wide range of potential employees.
In-house skills development that targets high potential employees based on their performance, is a motivating factor that builds high in terms of company’s image. Well defined processes and procedures for job promotion among employees contributes towards building good brand image in a great way. The framework used to measure individual performance and potential for all employees is a 5 x 5 grid with a scale of 1 to 5 with one being the smallest and 5 the highest. The assessment is simple and objective with every employer’s potential, skills and talent being measured against their specified deliverables (Su & Yang, 2015). Presence of ArcelorMittal University creates a big image for the company as this is not only a symbol of diversity but also a symbol of massive hub of ideas. It was quoted that in 2012, over 22,000 employees underwent a total of 375,500 hours of training by the university. This training helps to strengthen the corporate culture, strategies and values. The training plays a vital role in shaping the overall company’s identity. Consequently, preparation of workforce that requires new and special skills done in this university provides constant supply of potential specialists to the company.
Recent loss of jobs by several employees across the company’s subsidiaries is a major challenge for company’s profile. Employment security uncertainties reduces performance of employees and challenges recruitment processes during hiring. Retrenchments in recent times tends to be unavoidable because of automation that comes with technology (Wilson, 2016). Better ways of achieving production goals have been reported to increase day in day out. However, new ways should be devised that take care of employees’ welfare.
In-house skills development for adequate coverage
ArcelorMittal is a global organization with well-defined competencies in which each employer is measured against. The company’s diversity is reflective on workforce in terms of different nationalities, cultures, gender, races and ethnic groups (Aini, 2014). These competencies are for example stake holder management, critical decision making and strategic thinking. Although ArcelorMittal is one company with specific objectives at the apex of the management, the company is very conscious about diversity with regard of management of local elements. This comes from the understanding that some certain characteristics affecting the company that are native to one part of the world may conflict with some other characteristics in a different environment (Reddy & Gizachew, 2014).
Retiring people are taking expertise and job experience with them (Bakhazi, 2015). Sometimes workers are made to retire early in efforts to control labor costs. This creates imbalances which lowers productivity gain. However, emergence of new technologies phases out old technologies gradually and old ideas and skills may not be necessary anymore. Amount of workforce required reduces with introduction of technology and massive use of machines and robots, thereby increasing operational efficiencies. Young and dynamic people are considered more productive while experience and critical decision making are associated with age. Next generation leaders are required in the wake for need to use new strategies and emerging technologies (Ganapathy & Venkatesh, 2016).
Just as steel making has evolved over time to utilize technology, so is the concept of recruiting program at ArcelorMittal. This is in accordance to the company’s plan to ensure that current manufacturing demands and employees’ competence match (Butrin, Gel’manova & Yarushin, 2015). Partnership with different learning institutions is one approach that the company uses to capture and win brightest minds that help them transform the future of steel production. Furthermore development of ArcelorMittal University provides the company with a great way of tapping high potential individuals. The next generation workers and leaders will face more complex challenges that require innovation, high strength and agility. Several organizations including ArcelorMittal are still struggling to recruit next generation leaders (Zilberg, 2012). According to Ali Gilani who is the company’s global head of resourcing, this is because the recruitment of next generation leaders is being done by current generation leaders who are still not clear of what the next generation leaders should look like. Current interviewers lack to know what they are looking for and tends to choose people with similar attributes as their own profiles.
Image of ArcelorMittal and its impact on recruitment
Brand awareness was reported to be very low some time back in the company. It was noted by students in local university that some of passersby or ignorant residents around the area adjacent to the factories were found to know very little about the steel company and some even had problems pronouncing the name of the company. In Indiana, United States where the mother plant is based, some people could think something like that the plant produces some cosmetics by use of computerized systems! A report indicated that only some little efforts by the company were put in place to create awareness about its brand (Monfort & Villagra, 2016). This was another big challenge. The company have since launched serious campaigns to lift the brand. To raise company’s profile to attract future competent employees among students, the company has sponsored various activities such as Big Ten Conference- a football league for campus students. Through such interactions, social media advertising comes into play through use of related activities that prompts students to like the sponsors of the league in their Facebook pages and other social media platforms and rewarded with gifts in return (Melanthiou, Pavlou & Constantinou, 2015). The company has also extended campus partnership in attempt to increase awareness of carrier opportunities in the steel industry.
Conclusion
The report points out that although ArcelorMittal is much well off as much as workforce is concerned when compared with other organizations, there some challenges facing its workforce. Overstaffing is a major challenge that the company has to deal with. While recruitment of new skills to manage new needs is mandatory, the company faces situations that forces making certain hard decisions like to lay off some workers. Development and recruitment of workforce with regard to the next generation leaders requires better understanding of how the future would look like and what to expect. Some of the challenges the company is facing today are as a result of poor demand forecasting. The management needs to consider the recommendations given in this report and customize them where necessary so as to contain workforce challenges facing the company.
The following recommendations should be considered in order to solve the workforce challenges in ArcelorMittal:
- Develop an effective workforce management system. This system should be tailored specifically to monitor workforce requirement for a given period of time. It should also be able to compile employee’s outputs and rank them according to jobs accomplished.
- Increase the diversity of workforce in all branches to enable employees share ideas and interact well enough to eliminate barriers that impede good relations among workers.
- Transfer of highly skilled workers through job promotion to other subsidiaries where the company suffers deficiency of such high skills. This will help the company achieve workforce uniformity across its factories.
- Develop new plan that will contain surplus employees and make them to remain productive and of use to the company. This should be done by harmonizing automation, recruitment of new skills and development of in-house talents processes to eliminate the problem of retrenchments.
- Develop a recruiting team with comprehensive understanding of future needs. This will help them to understand what skills will be phased out by technology. Consequently plans to balance between recruitment of new skills and required workforce will be easier to define.
References
Aini, P. (2014). Workforce diversity at workplace: A report on Tata Consultancy Service. Indian Journal of Health & Wellbeing, 5(7), 107.
Ayne, J., McDonald, S., & Hamm, L. (2013). Production Teams and Producing Racial Diversity in Workplace Relationships Production Teams and Producing Racial Diversity in Workplace Relationships. Sociological Forum, 28(2), 326. doi:10.1111/socf.12021
Bakhazi, K. (2015). Former Employee Entitled to Early, Unreduced Pension Under Expired Collective Agreement. Plans & Trusts, 33(3), 21-22.
Butrin, A., Gel’manova, Z., & Yarushin, D. (2015). Risk-Assessment Practices of Companies in Ferrous Metallurgy. Metallurgist, 59(1/2), 99-103. doi: 10.1007/s11015-015-0067-8
Chawla, D., & Joshi, H. (2011). Impact of Knowledge Management on Learning Organization in Indian Organizations-A Comparison. Knowledge & Process Management, 18(4), 266-277. doi:10.1002/kpm.384
COCK, J., LAMBERT, R., & FITZGERALD, S. (2013). Steel, Nature and Society. Globalizations, 10(6), 855-869. doi:10.1080/14747731.2013.814441
Ganapathy, Venkatesh. 2016. “Empowerment through Engagement – Dealing With HR Challenges Faced By Insurance Sector.” Journal of the Insurance Institute of India 4, no. 1: 50-57. Business Source Complete, EBSCOhost (accessed September 27, 2017).
Melanthiou, Y., Pavlou, F., & Constantinou, E. (2015). The Use of Social Network Sites as an E-Recruitment Tool. Journal of Transnational Management, 20(1), 31-49. doi:10.1080/15475778.2015.998141
Monfort, a., & villagra, n. (2016). Corporate social responsibility and corporate foundations in building responsible brands. El Profesional De La Información, 25(5), 767-777. doi:10.3145/epi.2016.sep.07
Othman, A. A. (2009). Strategic HRM Practices: Perspectives of Malaysian and Japanese Owned Companies in Malaysia. Global Business & Management Research, 1(1), 1-22.
Reddy, s. K., & Gizachew, e. (2014). Managing diversity and multiculturalism for organizational transformation. Clear International Journal Of Research In Commerce & Management, 5(9), 66.
Sinha, A., Pandey, J., & Varkkey, B. (2017). Professionalizing Religious Family-owned Organizations: An Examination of Human Resource Challenges. South Asian Journal of Management, 24(2), 7-24.
Su, C., & Yang, T. (2015). Hoshin Kanri planning process in human resource management: recruitment in a high-tech firm. Total Quality Management & Business Excellence, 26(1/2), 140-156. doi:10.1080/14783363.2012.756743
Wilson, R. L. (2016). Organizational resilience as a human capital strategy for companies in bankruptcy. Work, 54(2), 309-323. doi:10.3233/WOR-162302
Zilberg, T. (2012). Board-level participation and sr implementation in organization’s management. Managerial Challenges of the Contemporary Society, (4), 205-212.
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