Human resource development lies at the heart of organizational development in terms of social, technological and economic factors. Human resource development has recently gained importance and worked as the key function of an organization. The main aim of human resource development is to expand workforce skills within the organization to gain from it. It ensures the continuous growth of human capital employed in the organization through training and development programs. Human capital works as an inventory for the organizations and by tapping in the knowledge from workforce, organizations tend to survive in this competitive world. According to Nadler, Human Resource Development is described as a systematic process of learning and improving skills and talent of the employees of an organization (Nadler, 1984). It is a series of organized and defined processes through which learning objectives are achieved by an organization (Nadler, 1984).

Recently, human resource development has played a crucial role in gaining competitive advantage. It has moved beyond the process of just improving the skills and development of employees within an organization (Saks & Haccoun, 2013). Learning has been identified to be the only source through which organizations tend to cope up with changing technological and administrative environment. Knowledge management has taken on the new shape of Human Resource Development in which the organizations are seen as to embracing the idea of learning at both individual and organizational level (Balyan, 2007). Organizations are not only working towards distribution of goods and services but, recently after global financial crisis and business slow-downs, it is also seen as a complete learning institute where human capital is developed that makes organizations to better cope up with changing environment (Saks & Haccoun, 2013).

 

IMPORTANCE OF HUMAN RESOURCE DEVELOPMENT FOR AN ORGANIZATION

Human resource development is about empowering people through fostering their capabilities and capacities that can help in improving their own way of life as well as their families, communities, societies and enterprise (Nadler, 1984). When analyzing the importance of human resource development for an organization, it can be seen that in any economic activity human element plays an important role in commanding, directing, organizing, controlling and maximizing the factors of production. All the other factors of production i.e. land, capital and enterprise, can be retained and discarded regardless of size and time, but labor needs special education, knowledge and development. It takes forever to hire the targeted skilled workforce, retain it by different policies and continuously upgrade and improve their skill set and knowledge through training and development programs (Mohammed, et al., 2013). The aim of HRD is to equip the organization with competent and qualified employees that can foster the growth of organization and aid it in achieving the targeted goals and objectives efficiently (Saks & Haccoun, 2013). Human resource development needs heavy investment from organizations in order to achieve productivity and growth over time (Gilley, et al., 2002). Human resource development is recognized to be critically important for organizational functioning.

The question that needs pondering is why organizations are reluctant in investing into human capital? The answer lies within itself. The human capital is just like an asset that can be acquired by other companies with minimal effort i.e. though increased wage rates and perks (De Silva, 1997). Therefore, organizations find it useless to invest into human capital due to increased job hopping, poaching by other organizations, mobility option and dynamism in tight labor market (De Silva, 1997). The skills, talent, knowledge, experience and capabilities of human capital are taken along them when they shift from one organization to another. Moreover, many organizations still view worker training and education as a state level responsibility and seek no duty towards improving the skill set of their employees (De Silva, 1997). However, industrialized economies tend to identify the importance of enhancing and improving the skills of their human capital and recognize it as their duty to train employees for employability. There are many examples of advanced countries who do not only leave it on the government to provide the technical education, training and development incentives for the labor market, but jointly contributed towards creation of high quality of education and training for the employees (De Silva, 1997).

HUMAN RESOURCE DEVELOPMENT IN AUSTRALIA

Human resource development has broad scope due to which many scholars have been deciding between their preferences towards performance versus learning process. HRD has been identified as a critical element for achieving organizational performance but after Global Financial Crisis there has been consistently increased pressure on effective resource allocation to human resource development and need for more tight focus on individual performance (McGraw, 2014). In past two decades, Australia has faced major changes in federal government policies as well as reform initiatives through labor market deregulations. In the early years, during 20^th century, Human Resource Development in Australia took place within the context of centralized, bureaucratic and complicated labor market in presence of strong labor unions (Ford, 1982). Through this type of bureaucratic regime, the labor market was reshaped to include inflexible working patterns, strong managerial control and economic protectionism (McGraw, 2014). With the break of 21^st century, Australian organizations departed from centralized labor market towards more regulated labor market (McGraw, 2014). This was due to global financial crisis that helped in emergence of increased human development need. The successive governments dismantled labor market deregulations and protection barriers instantly. Furthermore, the shift of analyzing competition cruised towards micro-economic reforms instead of macro-economic policies. Vocational training and education were introduced in 21^st century which forced the employers to invest more in development of human capital (McGraw, 2014). With the introduction of competency based skills and creation of competitive training market, it was expected that Australian organizations will jump at managing human capital with more rigor, but according to Australian Bureau Statistics (ABS) the organizational activities were still fragmented (Australian Bureau of Statistics, 2005).

During mid 2007 global financial crisis crunched the stock market and as a result many financial institutions went bankrupted due to credit squeeze (McGraw & Peretz, 2011). The results were increased stagflation, stagnant economy and low growth in many developed economies. Human resource development, in this particular phase, faced a lot of challenges in Australia due to widespread economic uncertainties (McGraw, 2014). Australia, as compared to other economies, remained lesser affected by the aftermath of Global Financial Crisis. The GDP of Australia grew by significant level of 10% and its unemployment was kept as low as 5% during 2012. Trade worked as a lifeline for Australia to survive in such economic turmoil where its exports to South Korea, India and Japan (combined) remained at 30% (Australian Bureau of Statistics, 2012). The Australian bank system and financial market remained stable during economic crunch and due to high regulations the financial institutions in Australia remained unexposed towards the financial risk. Generally human resource development budget was set out to be cut first by the organizations during the financial crisis. In Australian economy AHRI reported that 71% of the organizations (out of 1164 multinational companies) didn’t face a cut in its HRD budget, instead there was an increase in the budget since the onset of global financial crunch (McGraw & Peretz, 2011). However, during 2011-2012, 51% of the Australian multinational companies saw a decrease in their HRD budget (Australian Bureau of Statistics, 2012).

Human resource development practices are most found in the large companies in Australia and lesser in small and medium enterprises. The literature has provided three main reasons in support of the lower investment in HRD by SMEs (McGraw, 2014). Firstly SMEs do not tend to derive more benefit through investing in HRD due to lack of economies of scale. Secondly, SMEs do not comprise of skilled and professional employees so there is much lesser need to train and develop their competencies. Lastly, SMEs focus more on short term training projects due to external uncertainties they face (McGraw, 2014). Banking and retail sector of Australian economy saw increasing trend in human resource development while civil engineering, energy and mining industries didn’t see much growth in human resource development in past few years.

According to the research by McGraw, Australian organizations were found out to be putting more emphasize on performance based human resource development procedures instead of learning process (McGraw, 2014). According to research done by Holland, organizations in Australia were consistent in using performance management methods in Human Resource Development (Holland, et al., 2007). Multinational corporations in Australia were found out to be investing low in measurement of training effectiveness and investing higher in career development. Despite of the favorable economic conditions, HRD investment in Australia remained low and less sophisticated although due to higher government initiatives and incentives, organizations in Australia are managing to invest and focus more on performance management, skills development, HRD interventions and career development. Australian organizations have chosen the path where individualism is the key focus of human resource development investment which means there is low focus on long term HRD strategies (Holland, et al., 2007). Moreover, individual performance is the only key measure of Human resource development that is being used by the organizations in Australia (McGraw, 2014).

Toyota Motor Corporation Australia (TMCA) has been focusing on human resource development with the goal of developing Toyota employees and business partners through implementation of training programs and standards (Toyota Motor Corporation Australia Ltd., 2009). Regardless of culture and location, all the Toyota members have been equipped with one common language so that communication can be done at global level. This was done by giving all the Toyota employees education and training of one common language. Global content has been deployed at local operations in TMCA since 2002 (Toyota Motor Corporation Australia Ltd., 2009). There are several development and training programs such as Job development, role training, Toyota Business Practices and Toyota Way Foundation. Furthermore, during 2009 TMCA developed a separate training institute in Australia for strengthening the foundation of development. Similarly Mitsubishi Australia also seemingly invest in training the human capital thorugh in house development programs (Toyota Motor Corporation Australia Ltd., 2009).

In a nutshell, HRD has faced turbulences due to Global Financial Crisis as the focus moved from long term to short term policy formulations where individualism and performance based measures received more attention by organizations in Australia. As Australia depends heavily on Asian economies, so it will face significant economic risks should the Asian economies face slower growth. HRD practitioners in Australia need to find alternative sectors in economy that needs to be developed so that its over dependence on mining sector is minimized.

HUMAN RESOURCE DEVELOPMENT IN UNITED STATES AND JAPAN

United States has moved far away in implementing human resource development programs at organizational levels. The services companies in United States and Japan has developed a quality culture that is essential in achieving higher productivity levels (Werner & DeSimnoe, 2011). Bureau of Labor Statistics in America has identified that Human Resource Development is the profession that is gaining growth at fastest pace in America in the past few years (Werner & DeSimnoe, 2011). Management systems are essentially developed by organizations in United States of America that ensures effective performance management, good human resource development programs and customer oriented performance management systems. Many European countries and United States have faced long global recession episodes during Global Financial Crisis era (Werner & DeSimnoe, 2011). This resulted in budget crisis due to which only developed Asian economies, like China, experienced strong economic growth and human resource development programs. In 2008, $135 billion were spent by organizations in United States for employee training and development which then decreased to $126 billion in 2009 (Werner & DeSimnoe, 2011). Human resource development was identified by employees as the most important factor in organizational development followed by recruitment, productivity, succession planning, job satisfaction and compensation. Recently, organizations in United State of America has spent over $200 billion annually for the development and training activities. American society for Training and Development (ASTD) is the world’s largest body that is devoting its services towards development and training of human skills (Werner & DeSimnoe, 2011).

Chevron in America is the best example that practices human resource development through provision of programs that helps in innovation and growth. It also provides collaborative and interactive on field training to the employees. It helps them in exhibiting strong communication skills, demonstrating leadership skills, engaging into diverse assignments and grasping new concepts (Werner & DeSimnoe, 2011).

Similarly Japan has been moving from its traditional human resource practices towards western human resource practices. Recently, many companies in Japan have been seen as to create global database of its employees that are even hired abroad for development and succession planning (Takeuchi, 1998). This type of planning helps the Japanese firms to identify what type of talent is present in the local Japanese people and where are they employed. Initially Japanese firms were seen more reluctant towards investing in local Japanese employees as well as non-Japanese employees but now after the Global Financial Crisis, more and more firms are understanding the significance of Human Resource Development and identify it as an effective investment (Takeuchi, 1998). Recently, the trend has been seen in which many Japanese firms encourage non-Japanese workers to get employed in Japan and train them to get a better understanding of the local culture as well as helps them in developing effective relationship with the parent companies situated in Japan (Takeuchi, 1998). Global scale training programs has started a new trend in training and development paradigm that helps in attracting global leaders around the world to participate in leadership, development and training programs.

Employment and Human Resource Development Organization of Japan and Japanese government are continuing to spearhead the human resource development plans through official development assistance. HRD has been practiced by both firms and not-for-profit organizations in Japan (Takeuchi, 1998). Since the break of 21^st century Japanese government has taken many initiatives in promoting HRD as the highest national priority and also implemented various programs for the development and training of the current employees as well as the potential job seekers. According to Japanese Ministry of Labor, 80% of the Japanese companies use training and incentive programs like on-the-job-training to develop skills of their employees during 2010 (Takeuchi, 1998). Japanese car manufacturers use wide ranging job rotation and focusses on long term development of employee skill set. The firms in Japan assumes that the employees will stay with the organization in long run and accepts the training and development of workforce as their responsibility (Takeuchi, 1998).

 

CONCLUSION

Japanese and United States of America are implementing human resource development plans to yield increasing benefits associated with it. However, Japanese human resource development system is not wide in scope i.e. range of job categories that needs development. HRD in Japan depends upon production system and product diversity. Japanese organizations have successfully identified their responsibility towards educating and training the workers and employees by equipping them with production methods and techniques (Takeuchi, 1998).

As compared to Japan and United States of America, Australian organizations have not still recognized HRD as the source of competitive advantage as found out by Peretz and McGraw in 2011. The study showed that Australian organizations do not show a consistent pattern of human resource development programs (McGraw & Peretz, 2011). Through human resource management organizations in Australia are investing in their people and continue to progress through staffing their organizations with the right people with right skills and at right time. Human resource development should be viewed as a central part of the employees overall human resource strategy. Australia can gain through foreign investment for raising the stock of human capital just like Singapore did. Hence, training and development needs proper policy for retaining workforce otherwise organizations can face loss of money and its efficient workforce.

 

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