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Knowledge and Human Capital

Knowledge management is far more than the use of technology and it’s about finding ways to attract, deploy and retain intellectual capital. Knowledge management is about the HR role trying to internalise core competencies that the organisation has and the collective memory of what organisations know are their strengths – and what are they doing to prevent losing these. The era of “re” words is still with us – restructuring, re-engineering, re-organising, and redeployment unfortunately, too many retrenchments. HR must play a proactive role when “re- word” processes occur, so that the organisation doesn’t lose the key skills and intellectual capital it needs to retain.

We need more skills and knowledge that are in demand globally. There are many South Africans working overseas, and a lot do not necessarily emigrate. High value human capital is clearly mobile. South Africa has emerged as part of the global economy in the last decade. There are several ‘push’ and ‘pull’ factors in the global labour market – reasons local talent work overseas are not only crime, or perceived limitations of employment equity policies. A key factor is the increased portability of priority skills in global demand. There is a price for this talent and people will follow the demand and the price.

International Human Resource Management (IHRM)

Another challenge follows the positive growth and expansion of many South African companies post 1994. More of our companies are becoming multinationals – they are expanding into other economies and becoming global. HRM is becoming important in helping to deploy talent in globalising firms. HRM practices and policies for deploying expatriate staff are becoming a very important strategic issue. There is a lot of research on international HRM – for example: how to select, culturally integrate, remunerate and organisationally integrate expatriate employees into the host country, and then reintegrate them back into the home country and organisation. Work opportunities and international assignments are more readily available in East Asian markets. HR must develop criteria for recruitment and selection of professional and managerial expatriate employees. For example, considering to a greater extent than before the family situation, the partner’s career, schooling stage of children etc. There is a range of new HR issues around international HRM that some of our organisations like Old Mutual, SAB Miller, ABSA and Chevron are working with.

This is a fascinating area. Remuneration for example, considering the different taxation, legal issues, policy issues e.g in China, to what extent do you employ expatriate vs. locals in a multi-national – in key positions. If there’s a mix, what is the basis for this? You have to give attention to developing local expertise. Johnson and Johnson is one of the most progressive companies in these areas – putting a lot of time and effort to developing local talent in host countries like China and South Africa.

International remuneration practice is strategically more important for companies who are multinational. Take for example a pension scheme – if one works in a multinational firm abroad for a number of years, are you given your pension in dollars? Our taxation rates are much higher. This has sometimes prohibited people from coming back. There are a host of new conditions of employment to consider in international HRM work.

Human Resource Development

Additional HRD trends include more companies wanting customised programmes in dealing with specific challenges that the organisation faces. One recent programme in Impala Platinum for example: senior HR participants would focus on generating specific organisational value propositions from their own case experience, mastering scorecard metrics and identifying HR outputs and deliverables.

Value creation and Human Capital

Despite all of this, HR is sometimes considered less important than other organisational functions. Why is this?
• HR people have to ask themselves the fundamental question about their contribution. They don’t think enough about this. HR is not just about implementing systems but about contributing, it has to be about strategic capability and how we create value through mobilising people for high performance and service excellence.
• Understanding your business, something not always evident in the priorities and language of HR practitioners.
• They must be business people with HR expertise. HR must develop a unique value proposition for their organisations and then line executives will take notice.