There are 3 main social and economics reasons that force a transition in HRM of most multinational company, which are:
- Emerging geographical market : Many countries have demands on various products or services, in a huge amount, which will led these multinational company wanting to expand to these countries to capitalize on this opportunity and seize profit and market share.
- Globalization : Globalization trend is growing very rapidly among many countries which will led to them opening up to more diverse culture, economies, and populations on many countries. This will also cause them to assimilate some of the culture, technologies, and product outside of their countries. This will directly lead to the first point, which is emerging geographical market.
- Increased competition : Of course it's not only one company that will face these challenges and opportunities, most multinational company will also encounter these too. Thus it will create a competition among many multinational company on how to expand their business abroad and capitalizing on these opportunity to secure the most market share and gain more profit among other multinational company.
Because of those reasons, HRM is forced to evolve to adapt into the situation, which most company tend to use Global mobility to solve these problem. HRM now requires to manage workforce globally now, not just in the origin country, where they have to ensure that the parent company and it's branch can work together and have enough workforce to actually function. With the declining popularity of expatriate leadership, HRM is also needed to recruit and train more local workforce with right talent and understanding of the local culture and market, but also ensuring that they have the same quality with other branch or parent company.