Reuter has various challenges in which they must consider when managing IHRM functions. Reuter aims to standardise its HRM organisation as part of their change process. Implementing these changes can cause challenges that Reuter must face. These challenges can include:
• The budget Reuter must attain to support the change of standardisation and the time constraints.
• Centralised Policy
• Must understand which of their HRM service centre should be globalized or localised.
• How off-shoring impacts staffing.
According to Reuter’s case study during regionalisation of HRM and the organisation, Reuter should consider the cost efficiencies when globalisation is desired. It is important that the organisation has the costs to support the change as it would be tedious if the change cannot be conducted halfway (Reference). Reuter’s IHRM would therefore be prone to risk if it does not have a budget as business transformation is requires fundamental changes in parts of the organisation to ensure competitive advantage exist. Furthermore, it is a timely process and can take over years to ideal hence with no budget will cause a challenge for Reuter.
Reuter currently has 17,000 employees with 5% being expatriates. With 200 sites available, it is likely that Reuter may need to recruit more employees to centralize the operations for each sites, this can mean teaching current employees new skills, knowledge transfers and sharing. Reuter plans to off-shore transactional centres to lower cost locations – India, Bangkok and Beijing. Doing so, the IHRM of Reuter needs to consider the culture differences that may exist between employees when off-shoring happens. Often countries develop their own values, norms, belief and acceptable behaviour. For example: At Beijing, power distance is extremely high in accordance to Hofstede’s Culture Framework, if employees cannot deal with high