Based on the importance of HRM, describe the following trends affecting human resource management including: a.. iii FIGURES Figure 1 Statistics on social media recruitment of companies
Technology trends
In today's digital era, technology perhaps best characterizes the trends shaping human resource management Such digital technologies are driving this transfer of HRM functionality from HR professionals to automation The most noticeable are social media, mobile applications, gaming, cloud computing, and data analytics 1.1 Social media
Figure 1 Statistics on social media recruitment of companies in 2022
(source: https://www.zippia.com/advice/social-media-recruitment-statistics/)
Employers of many companies are increasingly using social media for recruitment, remarkably social networking sites such as LinkedIn, Twitter, Facebook, and Instagram According to the research conducted recently in 2023 by Zippia, 94% of recruiters use social media, in which 90% of them use Linked, the number one social media site for recruitment, 55% use Facebook, 47% use Twitter and only 11% start using Instagram
HUMAN RESOURCE MANAGEMENT Trends Affecting HRM 1.2 Mobile applications
Figure 2 Statistics on organizations using mobile-enabled HRM
(source: extracted and compiled from discrete sources: https://www.statista.com/statistics/1086172/mobile- enabled- -technology-applications-usage-worldwide/ https://www.statista.com/statistics/1086 hr , , https://www.statista.com/statistics/1085944/human-resources-applications-implemented-worldwide/)
In modern workplace, employees are now spending more time on their mobile devices during business hours Mobile functionality has emerged as a crucial buying criterion for HR leaders looking to upgrade the current system of working with desktops and laptops For instance, to monitor employee location and to provide digital photos at the facility clock-in location to identify workers HR apps like Firstup, Beekeeper, Staff base, Poppulo, provide employees with important information in one handy and easily accessible place HR personnels can perform mobile-enabled core HRM functions namely attendance & schedule, internal communication, payroll & benefits, talent acquisition, performance monitoring, …
As reported in an extensive investigation conducted by Statista on a total of 1892 respondents organizations representing a total workforce of 22.2 million employees and contingent workers from 2019 to 2021, 57% of firms are now incorporating mobile functionalities in more areas of HRM functions such as payroll & benefits, performance monitoring,… besides the traditional check-in, check-out mobile apps for staff The most significant trend is that many companies are now placing emphasis on internal communication through the use of mobile applications
Figure 3 Statistics on the effect of gamification on employees in HRM
(source: https://www.zippia.com/advice/gamification-statistics/)
In recent years, more and more successful businesses are incorporating gamification 1 into employee training and work experiences to improve productivity and engagement on the job The industry of gamification is projected to grow from $9.1 billion in 2020 to $30.7 billion by 2025 with the rise of gaming designed specifically for HRM such as Knack, Gild, True Office Learning, CuckooTech, Badgeville, … A popular case, My Marriott Hotel is a game that has been developed by Marriott International to recruit newbies It virtually simulates the whole experience to run a hotel business by allowing the candidates to run their own virtual hotel in which they design their own restaurant, purchase inventory, train employees and serve guests Research by GrowthEngineering in May 2021 shows that on average, employees experience a 48% engagement increase with gamified work experience 70% of the
2000 largest companies, including conglomerates like Google, Facebook, Microsoft, Cisco, Deloitte, McDonald’s… in the world are utilizing gamification in HRM Meanwhile, companies with HRM gamification are 22% more profitable, 21% more productive and have 10% higher customer satisfaction rates
1 Gamification: the application of typical elements of game playing (e.g., point scoring, competition with others, rules of play) to other areas of activity to encourage engagement with a product or service
HUMAN RESOURCE MANAGEMENT Trends Affecting HRM 1.4 Cloud computing
Figure 4 Statistics on the status of cloud computing in HRM
(source: https://www.statista.com/statistics/203410/global-forecast- -cloud-computing- -service-revenue/ of hr ) Over a decade, cloud computing has infiltrated many aspects of business as it 2 proves plenty of benefits With cloud computing, a recruiter or an interviewer can access resumes and other documents from anywhere at any time enabling a seamless hiring process Cloud computing also allows HR managers to restructure and automate data heavy HR processes like onboarding of new employees, timesheet submission, feedback, performance reviews, payroll and vacation requests processes In addition, it also reduces workload and improves accessibility as all information is stored digitally on a cloud server and can be retrieved anytime, anywhere On top of that, it provides data security by its nature Post the pandemic in 2021, companies have accelerated their move to cloud-based HR platforms The market blooms with the emergence of game changing HR cloud service solutions providers, typically HR Symphony, HR Cloud, Zoho People, Bamboo HR
In accordance with the report of Statistia, the global cloud service revenue from the human resource management segment in 2016 is nearly $15 billion The ISG survey of
260 companies worldwide found 46% using HR Cloud The findings were published as
2 Cloud computing: on-demand access, via the internet, to computing resources — applications, servers, data storage, development tools, networking capabilities — hosted at a remote data center managed by a cloud services provider, who makes these resources available for a monthly subscription fee or bills them according to usage part of the 2021 ISG Survey on Industry Trends in HR Technology and Service Delivery report Looking to the future, the survey found 57% of organizations expect to be using a subscription-based HR cloud solution by 2023
Figure 5 Statistics on data analytics in HRM (source: https://www.grandviewresearch.com/industry-analysis/hr-analytics-market)
Over the recent years, the use of data analytics in HRM to make data-driven 3 decisions has become critical for monitoring and measuring organizational and employee productivity It has triggered a significant paradigm shift called HR Analytics, which involves collecting data and key metrics on the workforce and organization by using data analytics softwares like Power BI, Tableau, Deel, Rippling, Paycor… to gain valuable insights on HR functions
As stated in the HR Analytics Market Report by Grand View Research in 2022, the global HR analytics market size was valued at USD 2.7 billion in 2021 and is expected to expand at a compound annual growth rate of 14.3% from 2022 to 2030 Over 70% of executives consider HR analytics a main priority in their organization The HR functions account most for that priority are employee engagement (37% market share), recruitment (25% market share) and payroll & compensation (17% market share)
3 Data analytics: the process of statistical techniques, algorithms, and problem-solving to identify relationships among data for the purpose of solving particular problems
HUMAN RESOURCE MANAGEMENT Trends Affecting HRM
Globalization trends
Figure 6 Statistics on globalization over decades from 1960 to 2020 (source: chart produced with data from https://www.macrotrends.net/countries/WLD/world/gdp-gross-domestic-product)
With the statistics provided by Our World in Data, thanks globalization , the to 4 world’s GDP rose from $1,392 trillion in 2016 to $85,105 trillion in 2020, doubling each decade with the annual growth rate of 3,47% Governments dropped cross-border taxes or tariffs, formed economic free trade areas, and took other steps to encourage the free flow of trade among countries Multinational firms like Apple, Amazon, Alphabet, Meta, Tesla… make their business presence in many countries across the globe For instance, Apple has over two hundred suppliers and subsidiaries around the world in their supply chain Apple gets raw materials such as gold extracted from Peru, copper from Chile… then handles assembling products in China, Malaysia, Thailand by Foxconn Pegatron and or finally distributes them through Apple Reseller s.
PwC’s annual report of top 100 largest global companies in 2022 states that the market capitalization of the world's 100 most valuable companies increased from 21.4 trillion dollars to 31.7 trillion dollars between that year and March 2021, a 48% increase in just one year This proves that globalization provides many opportunities for business success and scaling growth
4 Globalization (in terms of business): refers to companies extending their sales, ownership, and/or manufacturing to new markets abroad
Table 1 Areas where HR faces challenges of globalization in 2017
(source: re-arranged from https://pdfs.semanticscholar.org/5225/0cb58b021a14f403ff4b7ace0c78f4ad32dc.pdf)
Areas that HRM faces challenges Agree Neutral Disagree
However, globalization does not only provide opportunities but also imposes challenges on the prominent field of human resources The International Research Journal of Business Studies found in 2017 that HRM faces challenges in the areas: culture and norms (72% agree), political influence (65%), change management (56% agree) … Managing the “people” aspects of globalization is a big and complex task for
HR managers of any company that expands abroad
Notably, globalization has brought many transformative changes to the field of recruiting Businesses that were once tied to local labor pools now have access to global options and there are numerous job seekers in the queue Social media and professional networking sites have allowed organizations to secure the very best workers and reap the benefits of a diverse workforce Many firms transfer operations abroad, not just to seek cheaper labor but to tap into new markets For instance, Apple saves around $100 per unit on the iPhone and $30-$40 on other products by manufacturing products in China Similarly, Samsung has manufacturing plants across the world including Vietnam, India, Brazil, Indonesia
At the same time, globalization vastly increased international competition The competitive advantage lies at the problem of sustainability as HR leaders have to coordinate their employees from all nations of the world into a single business linked by the vast network of communication technologies meanwhile lowering the costs and making employees more productive In the face of this intense competition, companies turn to Strategic Human Resource Management (SHRM) with the approach of aligning and linking all workforce with core strategies to optimize their human capital
HUMAN RESOURCE MANAGEMENT Trends Affecting HRM
Trends in how people work
Based on the data provided by The World Bank, work has shifted from manufacturing jobs to service jobs worldwide, from 39,4% in 2000 to 50,6% in 2020 in terms of proportion of employment An interesting fact is that employment of service industry in higher income sectors like North America and Western Europe accounts much more (74,1% in 2020 for instance) for the total workforce and vice versa
Figure 7 Global on-demand workforce by country map in 2021
(source: https://data.worldbank.org/indicator/SL.EMP.SELF.ZS)
Workforce shifting towards service jobs in combine with globalization and technology has laid the foundation for the emergence of a new trends of employment, namely on-demand working On-demand workers are classified into different types: 5 independent contractors, moonlighters, temporary workers, business owners (self- employed), and freelancers ExploringTopics’s statistics in 2022 show that there are approximately 1.57 billion on-demand workers across the globe, and it accounts nearly 47% of the global workforce Top countries with the most proportion of on-demand workers are United States (78%), United Kingdom (59%), Brazil (48%), Pakistan (47%),… Fastest growing industries for on-demand working includes accounting, customer service, information technology, and surprisingly HR Worldwide, the total
5 On-demand working: the employment practice in which workers work when they can on what they want to work on, when the company needs them freelance platform market is estimated to be worth $3.39 billion Largest freelancing platforms are Upwork (formerly Elance-oDesk), Fiverr, Freelancer.com, PeoplePerHour, Amazon’s Mechanical Turk, TaskRabbit, … This allows some companies to entirely base or extend their business model on on-demand working For example, all of Uber’s drivers are independent contractors Another one is that Airbnb can run in essence a vast lodging company with only a fraction of the traditional employees one like Hilton Worldwide would need thanks to freelancers
The fact that employers increasingly rely on such extended workforces” has implications for HR Companies that reply on on-demand employment model with will need to create personnel policies on benefits & compensation as legislation of freelancing have been established in many countries In addition, HR managers of those companies have to become more expert as talent brokers in matching specific workers with specific tasks that need to be done and in the right amount of time Therefore, more and more employers are putting a growing emphasis on their workers’ knowledge, education, training, skills, and expertise – in other words Large firms, especially in the field of service jobs like IT, consultant, lawyer or doctor, are now practicing human capital management to cope with its high levels demand of human capital Similarly, bank tellers, retail clerks, bill collectors, mortgage processors, and package deliverers today need a level of technological sophistication just to do such mundane jobs Takes
HR department of Uber for example, they have to manage recruitment in order to compensate the very low annual retention rate of 4% meanwhile managing the training of nearly 20000 new drivers everyday and monitoring around 3.5 million drivers across the globe.
Workforce demographic & diversity trends
Globalization results in an inevitable consequence that is the global workforce is becoming more diverse than ever United States of America is perhaps the best example of a diversified workforce in accordance with the statistics provided by U S Bureau of Labor in 2022 It can be inferred from the table that over the next few years, the workforce of U S will continue to become more diverse with more old workers, more women, ethnic minorities, more foreign workers, and more non-traditional workers
HUMAN RESOURCE MANAGEMENT Trends Affecting HRM
Table 2 U S Demographic groups as a percent of the workforce from 2002 to 2022
(source: https://www.bls.gov/cps/demographics.htm)
Diversity favors business outcomes in terms of innovation and creativity Consequently, this provides organizations with a sustained competitive advantage and higher returns According to GlassDoor’s survey on workplace diversity in 2020, 67% of job seekers believe workplace diversity to be an important factor and 50% of employers want their workplace to be diverse and inclusive
However, the practice of diversity, equity and inclusion (DEI) in business is not an easy task In the field of recruitment, employers have to recruit ethnically diverse members for compliance with the legislative requirements For training and development, HR managers have to establish a congenial environment that promotes a culture of inclusion & diversity or to say HR leaders also have to create a culturally neutral enough performance management system Finally, companies need to avail training opportunities, promotion, and fair pay without discrimination Due to these obstacles, many companies are now employing Human Resource Business Partner (HRBP) to influence their HR teams on the matter of DEI.
In this section, the selected F&B company is Nestlé The study first briefly introduces, then analyzes problematic HR functions and finally identifies HR activities that can convert into competitive advantage to compete with the other companies.
Brief Introduction
Figure 8 Nestlé's owned brands (source: produced from https://www.Nestlé.com/brands/brandssearchlist ) Nestlé, officially named Nestlé S.A., is the world’s largest food and beverage company, established in 1866 by Henri Nestlé The company was formed in 1905 by the merger of the Anglo-Swiss Milk Company and Farine Lactée Henri Nestlé It has its headquarters in Vevey, Switzerland Nestlé owns more than 2000 brands Their products include baby food, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks According to Nestlé’s 2022 Annual Report, total reported sales increased by 8.4% to CHF 94.4 billion, with organic growth reaching 8.3%, accounting for 1.63% of the global food & beverage market
HUMAN RESOURCE MANAGEMENT Company HRM Analysis 1.2 Organizational overview
Diagram 1 Nestlé's organogram (source:https://www.researchgate.net/publication/342262154_A_Case_Study_for_Human_Resource_Analysis_ of_Nestlé_Pakistan_Assessment_of_Performance_Management_Appraisals_Methods)
Nestlé operates worldwide with around 275,000 employees in over 186 countries Nestlé owns more than 200 subsidiaries and 456 factories over the world In order to manage their massive business spanning across the globe, Nestlé develops a unique and specialized organogram
The organizational hierarchy of Nestlé is very concise and uncomplicated regardless of the company’s size and number of employees The structure consists of a Board of Directors who Nestlé are the principals of a managing director (CEO) who in turn has a principal agent relationship with different departmental heads This structure provides a well-defined line of authority which gives an idea of the highly organized and harmonious working environment of Nestlé Moreover, a key feature of such a simple organizational structure is lesser managerial levels which increase the efficiency of roles and duties dissolution Another feature of Nestlé’s organogram is that it offers flexibility which results in a more desirable performance from the employees.
Problematical HR functions
One of the biggest challenges for HRM in the F&B industry is attracting and retaining through the performance appraisal This is due to the high competition for talent, the physical and mental demands of the job, and the relatively low wages offered in the industry Nestlé suffers from the same issues in Pakistan
Diagram 2 Nestlé's recruitment process (source:https://www.researchgate.net/publication/342262154_A_Case_Study_for_Human_Resource_Analysis_ of_Nestlé_Pakistan_Assessment_of_Performance_Management_Appraisals_Methods)
The Recruitment and Selection task is performed by the Centre of Expertise division of the HR department The entire company’s future and performance relies upon this process because it is the people in an organization that determine the direction and success of the business The Business Partners are expected to communicate the requirements for potential employees for different departments and set the job descriptions to allow each selection Recruitment opportunities may arise either after discussing or budgeting a position, on the resignation of some employee or on an urgent need basis In all three situations, the department head has to obtain approval from the Managing Director (MD) If the request is budgeted, then the Divisional Head fills up a "Recruitment and Budgeted Form" This form contains the complete information, i.e.,the following particulars: date of initiation, date the employee is needed, profile, and job description
HUMAN RESOURCE MANAGEMENT Company HRM Analysis
After receiving the document, the human resource department put up an opening on the company website The vacancy for any post is shared on Nestlé’s website as they believe that reaping the benefits of globalization, the information should reach all the potential candidates at the same time Approximately eight to ten best resumes are selected and presented to the divisional heads On their recommendation the candidates are called for interviews and the most suitable are finally selected
When selecting candidates, a combination of characteristics encompassing the three key areas of knowledge, personality and motivation are assessed An applicant is expected to have a good academic record that demonstrates their intelligence, commitment, and hard work to become a Nestlé employee A sharp analytical mind, and the drive necessary to succeed in a competitive environment is also extremely important While they do look for good academic results at university or equivalent qualifications, the class of the degree candidates have obtained is not the only criterion for selection Other experiences during their studies, previous jobs, assignments, language theses and any other significant extracurricular activities and achievements, are also given significant weightage
They look for candidates who can identify a problem, analyze it, look at different options, and come to reasoned conclusions To succeed at Nestlé Pakistan, however, candidates need more than professional knowledge Candidates need a flair for the field of activity of their choice, an open mind, and a willingness to dig in and learn new skills and ideas They are looking for applicants who are dynamic and communicative People who can listen, understand, and integrate the opinion of others, people who can express their ideas clearly, both verbally and on paper They want people who like to negotiate, even with very different partners, and to solve problems in complex situations They like candidates who show leadership, inspire others, and are self- confident, yet realistic People who have a positive attitude to work and are willing to work hard, even under pressure They seek people who can be objective in their assessment of themselves and of others
However, some in-depth analysis made it prominent that the arrival of a vacancy does not necessarily translate into the required people with the right skill set and qualifications wanting to fill in that vacancy right at that time Furthermore, the vacancy may be of a post that does not match the wishes of an applicant who wants to perhaps, apply for another post In the absence of workforce planning, Nestlé might have to go through a shortage of workers at any point in time which could lead to long term- implications Workforce planning requires a strong bond between the human resource management of an organization and its finance department Both of these collectively analyze the needs of the organization and how they can be best met with regards to the type, size, experience, skills, and knowledge Nestlé should look at their past experiences and point out instances that allow them to see how the number of people in their workforce varies with the change in business plan.
Furthermore, the bigger problem lies at the appraisal method which Nestlé uses to retain their talent or evaluation of employees there is Performance Development Rating
To evaluate success, the PDP Rating is used which looks at two major aspects: ‘what’ and ‘how’ The ‘what’ measures success in achieving the individual established goals and the ‘how’ looks at employee behavior, soft skills, team working abilities, etc This PDP Rating then becomes the basis for rewards such as bonuses and promotions which are directly reflective of the high- performance culture at Nestlé PDR is the only appraisal method used at Nestlé however based on the interviews with different employees, this can sometimes be inefficient as the individual PDR is made by the departmental head after evaluating the ‘what’ and ‘how’ aspects of different groups which leaves a little room for individual employee evaluation
Nestlé can implement certain other methods of performance appraisals including graphic rating scale and 360-degree feedback method to increase the credibility and objectivity of the employee’s performance evaluations In addition, Nestlé should have a storage of data that records such changes over time The way that this will benefit them is that after doing an analysis of this data, they will be able to see patterns of change occurring due to such practice Similarly, demand and supply diagrams of workers will make excess and shortage gaps very evident that can help Nestlé identify the times when a potential vacancy will have strong contenders contending for it At the same time, the affects that fringe benefits, motivation, training have on employees should also be considered to see the satisfaction and unsatisfaction of workers at Nestlé
HUMAN RESOURCE MANAGEMENT Company HRM Analysis
Potential competitively advantageous HR activities
Nestlé could turn its HR activities of training & development and staffing into a competitive advantage and level up in the global field of food and beverage, as demonstrated successfully by the case studies in Nestlé Malaysia
Nestlé recruitment process is done in many available channels such as through its website and offline application One of their strategies in staffing is recruiting and developing local talent with local knowledge In Malaysia, they employ local people to work in all manufacturing sites Another staffing strategy implemented by Nestlé is internship program, management trainee for fresh graduates, recruiting professionals and gender balanced Nestlé provides promising career path to fresh graduates through a 2-year management trainee program to prepare them to become future leaders in the organization Nestlé takes talent retention very seriously as they appreciate the local talent by giving many benefits and providing great working environment for their employees
A gender balanced workplace is also a priority for Nestlé In 2016, they have introduced a KPIs (Key Performance Index) related to gender balance by focusing on succession planning practices and developing long-term female talent in the succession pipeline They are ensuring to have at least one woman in the key positions in the company They also support the government’s effort in increasing woman participation in decision-making roles and involving more women in the corporate sector workforce
By 2018, they aim to be a gender-balanced company Nestlé also provides various employee training activities and programs to improve employee engagement and heighten employee retention Training includes Unconscious Bias Training, mentoring program, Coaching Skill Pills Workshop, Nestlé Leadership Framework, Leadership & Personal Effectiveness Program and many more
The Unconscious Bias Training is designed to increase awareness on diversity importance, promote communication between genders and how these elements can affect the hiring, promoting and succession management decision-making activities A total of 329 employees joined the training from 2015 to 2016 and it helped them recognize grey areas and ways to eliminate biases For Leadership & Personal Effectiveness Program (LPEP), Nestlé objective is to create stronger bond between teams and leaders as to increase engagement of employees A total of 296 middle and senior managers attended the program and an after- program survey, 100% of line managers have observed an increase in participants’ capability Moreover, the relationship between staff and leaders has greatly improved, as well as employees’ engagement
For the management trainee program, 21 trainees graduated and were offered a role in year 2016 In the same year, 28 new trainees joined the program which offers a full- time position as future leader in Nestlé upon completion of 2-year program
Table 3 Nestlé Malaysia’s workforce (source: https://www.academia.edu/35557222/Human_Resources_Management_of_Nestlé_Malaysia )
Based on the workforce data in Nestlé corporate report as stated above, the employee turnover rate for year 2014 to 2016 is less than 3% which is considered healthy The rate even decreased by 0.89% to a low rate of 1.33% which shows the effectiveness of retention programs
Table 4 Nestlé Malaysia’s workforce demographics(source: https://www.academia.edu/35557222/Human_Resources_Management_of_Nestlé_Malaysia)
HUMAN RESOURCE MANAGEMENT Company HRM Analysis Based on the employee data above, 35% of its employees are women, and the percentage of female managers grew from 38.2% in 2015 to 39.3% from 2015 to 2016
In year 2016, 37% of the senior leadership team were occupied by women This result shows that Nestlé is achieving Employee turnover rate 2014-2015 2.22% Employee turnover rate 2015-2016 1.33% their KPIs in creating a gender-balanced company and showing a promising path in reaching their aim of a gender-balanced company by 2018 3.2 Training & development
Table 5 Training description received by Nestlé Malaysia’s employees
(source: https://www.academia.edu/35557222/Human_Resources_Management_of_Nestlé_Malaysia )
In 2016, Nestlé Malaysia is a giant company in the F&B industry that employed more than 5550 people With many training and development programs designed by Nestlé, the company aims to ensure employees earn their opportunity to learn, grow and develop their career path in Nestlé As much as 11 million has been spent in 2016 to deliver internal and external training There were 30 training sessions held with the participation of 1,269 training participants with a total of 12,388 training hours HR leaders could further improve their training and developing activities by linking both the system of KMS 1 and HRIS 2
1 Knowledge Management System (KMS): a system that helps in managing knowledge in an organization, which serves as a knowledge vault for new hires and existing employees where they can easily access to , in
2 Human Resource Information System (HRIS): a system that provides a centralized repository of employee master data that the human resource management group needs for completing core human resource processes
In the first section, the study has thoroughly described the four major trends in HRM, including technology, globalization, on-demand working and workforce demographics & diversity, along with its impact on HRM Interestingly, HR practitioners of companies under the influence of such trends are now approaching different HRM principles to cope with the impact For technology, it’s the practice of social media recruiting, mobile-enabled HR, HRM gamification, cloud-based HRM and talent analytics For globalization, it’s the approach of SHRM For on-demand working, it’s the emphasis on human capital For workforce demographics & diversity, it’s the introduction of HRBP
In the second section, the study selects has briefly introduce the food & beverage company of Nestlé Then, two case studies of Nestlé are presented and analyzed One is to identify problematic HR functions in Nestlé Pakistan, which is the problem of inefficient performance appraisal method that leads to many issues in recruitment and retaining The other is to identify the potential competitive advantage of HR activities in Nestlé Malaysia, which are staffing and training & development through the merging of KMS and HRIS system
In conclusion, HRM is guaranteed to evolve faster than ever With today’s modern societies, HRM has been greatly impacting by trends and crises across the globe The study hopes to be expand in the future ed
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