International Human Resource Management (IHRM) focuses on regular human resource management activities, such as creating recruitment and training policies and planning human resources in multinational firms with subsidiaries in different countries. Therefore, the main goals for IHRM are solving human-resource-related issues, studying the cultural differences in approach to human resources, and ensuring that the firm’s HRM practices are suitable for operation in a foreign environment. Economic unions imply close cooperation between nations that allows them a free flow of human resources. While economic unions usually benefit the development of all union participants, there are several complications that they have on IHRM.
Firstly, economic unions imply a high level of commodity exchange, which creates workplaces dependent on the export of goods and positive connection with other members of the economic union. Negative changes in one country’s economy can have a negative impact on workers from other countries of the union. The issue will result in the need for changes in HRM practices to address the issue of workers being affected by an increased level of job insecurity, increased stress at work, and wage cuts.
Next, the free flow of human resources across the countries of the economic union creates unequal working conditions. According to Lastauskas and Stakenas (2018), several policies in the European Union encourage flexibility and resilience of the labor market. Therefore, most high-skilled candidates try to find a more comfortable place to work and live. In this case, IHRM should develop new hiring policies to acquire more high-skilled candidates. Furthermore, the competition between companies for high-skill employees can result in firms purposefully avoiding taxes in order to pay more competitive salaries for employees. Lastly, as negative consequences of globalization become more apparent with time, the development of economic unions requires significant consideration, as similarly to globalization, it also negatively affects the working conditions and IHRM.
Reference
Lastauskas, P., & Stakenas, J. (2018). Structural labour market reforms in the EU-15: Single-country vs. coordinated counterfactuals. Structural Change and Economic Dynamics, 44, 88–99. Web.