Employee Turnover in Globalizing Environment

In the process of analyzing the reasons for the employee turnover, globalization plays a key role. As we know globalizations affects organizational cultures and rules of the countries. By this employee get to notice employee retention techniques used in international level and they tend to leave their previous organization to gain those benefits.

In the process of identification, the reasons for employee turnover in globalizing environment, we have identified several reasons that caused employee turn over in the modern world.

·         Career Development changes occur in international market

·         Work Life balance practices in globalized environment

·         Compensation and Benefits in global scale.

·         Work Culture improvements with globalization

Above mentioned are some of the reasons identified by the research conducted by work institute in 2019 (Institute, 2020).

 

Career Development changes occur in Globalized market

In the process of improving the organizations for international scale, there are number of changes that can be identified. Globalization tends to a have a major shift in work and individual reactions to it. But in this case, globalization has spurred related language, including internationalization, international competition, global economy, and free trade zones (e.g., The European Union, the North American Free Trade Agreement), which are all relevant terms. They cooperatively sign that most of the nations of the world are in transition in number of areas like politically, economically, and socially. These factors have placed transitions in education, jobs, employment and unemployment, careers, and interventions in career development high on the policy agendas of many nations.

In the globalized market we can identify number of activities for career development as below

·         Well Designed Organizational Ladder

·         International Trainings

·         Performance evaluated promotions

·         Upgrading the JDs according to technological advancements

·         Adding new designations related to technology

Above mentioned are key changes that may according in employee career development side with the globalization. This factor is one of the key ETO reasons and should be addressed with proper techniques of strategic HRM (Research, 2022).

Work Life balance practices in globalized environment

In a world with globalization and technological advancements, boundaries between work and home is diminishing at a rapid rate. By this employee can successfully reconcile the conflicting demands of paid work and their personal lives. Along with the Covid 19 pandemic, there was a significant rise of work from home solutions which can be beneficial for employees as well as the employer. Organizations can get higher amount of work done from the employees since transport time also been removed and in a financial point of view transport allowances can be replaced by lower rate internet packages. When considering the electricity and other utility bills paid in the office building, getting employees work done from is a well forecasted strategic decision.

As we know in the process of balancing the work life, working time is a key factor that can help facilitate work life balance. By globalization, international working times may be applied to international business in the country, therefore it may be a problem to retain local companies’ employees with the extended working hours. In international organizations we can identify a flexible working time culture, it will help local organizations to retain their employees by balancing their work life in a proper manner.

In addition, the extent of the availability of various forms of paid leave (paid annual leave, paid sick leave, paid maternity/paternity/family leave, paid parental leave) is an important factor affecting work-life balance as well.

As an example, most of the IT companies in Sri Lanka who works with globalized international clients use these techniques to retain their employee. Therefore, we can identify the work life balance practices that be identified with the globalization (Relations, 2022).

Work Culture improvements with globalization

In the process of identifying the ETO in globalizing environment, we should consider the factor that company cultures may be overlapping due to globalization. As an example, most middle east countries work only four days a week with Friday off, but most Asian countries they work all five days of the week including half of the Saturday. When the globalization hits off these local workers tend to work with international corporations by adhering to their work culture. These improvements will lead ETO in local organizations while increasing employee retentions with a good work culture.

Another main area that work culture will be improved is that employees gets a chance to work with different religions and cultures. As globalization becomes more prevalent, companies deal with increased cultural diversity within the workforce. This increased cultural diversity also has produced many benefits as companies gain new insights into different cultures from a management and a marketing standpoint (McFarlin, 2019).

Compensation and Benefits in global scale

In the modern world most of the international companies give an opaque salary scale. According to this most of the companies in international market tend to use this methodology to be in competitive recruiting. Offering a fair and equitable global compensation policy is a necessary part of building a happy, diverse, and productive workforce. By adding diversity and equity at the heart of the company’s compensation strategy will ensure all your employees feel valued. As an example,

In Canada, employee insurance is paid by employers monthly, therefore more money left in the employee's pocket. In Australia, after an employee reaches a certain salary band, employers must make deductions from salaries to cover for the employee's higher education fees (if they attended university). This results in less cash in an employee’s bank account. Therefore, even if two employees doing the same job in two different countries have equal salaries, their net pay will differ as they’re subject to various employment laws. An introduction of a total rewards policy helps companies realize these differences to ensure all their employees are paid fairly.

Along with the globalization each employee is aware of their own compensation than the employee was before globalization. Using social media, forums, websites like Glassdoor, Employees know they’re through value even before they graduate. Therefore, if the organization need to hire that employee, they need to offer a proper compensation and benefit package that can compete with rivals (Naidu, 2022).

 

Benefits of Globalization

In the discussion of globalization, we should identify the benefits of globalization towards employee. This is the most important aspect that influence the employee turnover. Below mentioned are some of the key benefits that we identified by globalization.

·         Access to New Cultures

·         The Spread of Technology and Innovation

·         Lower Costs for Products

·         Higher Standards of Living Across the Globe

·         Access to New Markets

·         Access to New Talent

Above mentioned are the key benefits that we have identified that organizations and employees gain from globalization.

 

Challenges of Globalization

In the process of discussing globalizing, we have identified number of benefits. As there are number of benefits, there number of disadvantages that can be identified in globalized cooperate. Below are some of the challenges that employees and organizations face when adapting.

·         International Recruiting

·         Managing Employee Immigration

·         Incurring Tariffs and Export Fees

·         Payroll and Compliance Challenges

·         Loss of Cultural Identity

·         Foreign Worker Exploitation

·         Immigration Challenges and Local Job Loss

·         Global Expansion Difficulties

Above mentioned are some of the key challenges that we have identified that organizations and employees will face along with the globalization (Global, 2020).

 

Globalization of the world mainly affect the cooperate environment. Therefore, employers should be able to make necessary changes to adapt the globalization, otherwise it will reduce the organizational performance in a higher manner. Therefore, organization should take the necessary changes and forecasts to adapt the globalization.

In the process of analyzing organization performance using ETO in a globalizing environment, we can conclude that if the company needs to reduce their ETO and increase the organizational performance they should adapt to the globalizing world.

 

References

Global, V., 2020. Velocity Global. [Online]
Available at: https://velocityglobal.com/blog/globalization-benefits-and-challenges/
[Accessed 13 November 2022].

Institute, W., 2020. 2020 Retention Report, New York: Work Institute.

McFarlin, K., 2019. The Effects of Globalization in the Workplace, s.l.: CHRON.

Naidu, P., 2022. Remote. [Online]
Available at: https://remote.com/blog/how-to-manage-global-compensation
[Accessed 1 December 2022].

Relations, I. L., 2022. International Labour Relations. [Online]
Available at: https://www.ilo.org/global/topics/working-time/wl-balance/lang--en/index.htm
[Accessed 20 November 2022].

Research, C., 2022. Career Research. [Online]
Available at: http://career.iresearchnet.com/career-development/globalization-and-careers/
[Accessed 1 December 2022].