50º Congreso Internacional AEDIPE. El futuro del trabajo. Pamplona, 6 y 7 de octubre de 2016. Conversaciones y debate: factores de cambio. Mesa 3. Globalización y nuevas economías Patrick G. Gunnigle. profesor de Administración de Empresas y director de la Unidad de Investigación de Relaciones Laborales. University of Limerick

1. Multinational Companies and HRM in &
‘after’ Recession: A Retrospective from a
Highly Globalised Economy’
Professor Paddy Gunnigle,
Kemmy Business School,
University of Limerick,
Ireland

2. Multinationals matter …especially in Ireland
 82k MNCs - 810k subsidiaries - 77ml employees
 69 of the top 100 economic entities are MNCs (Guardian, 2016)
 Huge Economic (& Political) influence …
IRELAND
 one the world’s most FDI-intensive economies (2nd
most
economically globalised)
 long standing ‘industrialisation by invitation’ policy
 key role in economic development (esp. US FDI)
 stock of American FDI (€52bn) in Ireland is greater than
BRIC countries combined 6bn)

3. HR’s Dilemma: a theoretical recap (crash
course?!)
HR’s Dilemma - Bedevilled by ‘vicious circles’:
Lacking in organisational power
→ limited to reactive role → reinforces negative image of HR → limits
quality of entrants to HR profession
WHY?
Contribution difficult to demonstrate
 Lack of clear criteria to judge performance/success
 → compounding low status & limiting talent pipeline
2 ESCAPE ROUTES
1. 1. Deviant Innovation
2. 2. Conformist Innovation
(Legge, 1978, 2005, Roche & Teague 2012)

4. Onset of GFC: Implications for FDI & MNCs
 Irish boom - most expensive country in the Eurozone →
many changes already afoot in MNC sector
 Recession not all negative ….for some MNCs it can be a
good time to grow:
Economic recession + high unemployment =
buoyant labour market & lower labour costs
 FDI remained strong through GFC….but impact of GFC
immense in Ireland nevertheless

5. Summary impact of GFC in Ireland
• GDP (2007-2009): - 11%
• volume of retail sales (2007-2010): -17%
• company insolvencies: +80% (2008-2010)
• debt/GDP ratio (2008-2011): 44.4% →→ 111%
• unemployment (2007-2011): 4.6% →→ 14.7%
• net emigration (2007-2010): - 67300 →→ + 34,500
• €85bn loan (bailout)from IMF/EU/ECB
• Effective nationalisation of financial system & state
capitalisation (€70bn)

6. & Equity Markets

7. IMPACT ON HRM: 1. Pay & Benefits
) Pay in the aftermath of the GFC
Pay freezes (70%) …widespread
Pay cuts (20%)* …SMEs/service sector/non-union firms
Pay increases (10%) unionised MNCs & larger indigenous firms
“We decided not to have pay cuts or pay freezes even though we could probably get away
with it. We are looking at a 2.5% increase next year. We could give no pay increase but
that’s a short term tactic – we can pay and we need to be fair”
Employers also reviewing rewards & benefits schemes:
bonus payments
pensions
performance management & profit-sharing schemes
*(NB Concurrent public sector pay cuts in region of 15% to 25%)*

8. IMPACT ON HRM: 2. Industrial Relations
Collapse of social partnership (after 2 decades)
Decline in union power/influence
Changed IR climate & increased worker malleability?
 management opportunism:
“ It’s an opportunity to cut deep & clear out poor performers..”
 union demand/interest but difficult to meet expectations –
what can unions do?

9. IMPACT ON HRM: role of the HR function
Irish evidence on HR role during recession points to something
of a conundrum……
 … HR function has played a key role in delivering org. responses to
GFC(re-structuring, downsizing, pay cuts/freezes, etc., etc.)
 … but greater ‘hard metric’ evaluation of HR leading to
rationalisation & reconfiguration of HR delivery

10. CONCLUSIONS
1. No broad evidence of diminution in HR’s role or status
2. Overarching focus on cost reduction
GFC has underscored HR’s alignment with management &
managerialism
i.e. ‘CONFORMIST INNOVATION’ (Legge, 1978; 2005)
(See quotes re impact on HR Role)

11. HR TRENDS BEYOND THE GFC
3 BROAD TRENDS
1. EVOLUTION & BROADENING of HR role
2. Greater focus on FORMAL EDUCATION
3. Greater HR alignment with management &
managerialism …aided by GFC (‘conformist innovation’)

12. MANIFESTATIONS
1.1. Bottom line is key
2. Feminisation but not at the top?
3. Use of IT rather than direct employees to deliver HR
services (‘HR fragmentation’)
4. New & old skillsets required
- Negotiation/Engagement/Conflict Management
& IT/Operations Management/Finance

13. QUESTIONS & COMMENTS?
Multinational Companies and HRM in & ‘after’
Recession: A Retrospective from a Highly
Globalised Economy

14. On increased workload & rationalisation
of HR delivery
As part of this cost agenda people in HQ have said ‘hang on a
second we are not just squeezing production & engineering…we
need to look at enabling functions like HR, finance, IT. We need to
start squeezing you.
They are moving to a centre of excellence model which is driving
redundancies in HR. I had 8 people working for me when I started
– now there’s me and one other.. there were [HR] redundancies,
about 20%. If you have a HR issue, it’s gone to Shared
Services ...it [HR] has been stripped down to the bare bones.
It has thrown up a huge challenge & behind all this is cost - to
drop the numbers, push more work back to the line, drive
specialisation”
HR Director, Pharma

15. On rationalisation of HR delivery
We have recently moved from a decentralised
regional/local (HR) structure to a more centralised ‘call
centre’ model. For example, in [US city] I have one HR
manager responsible for 1000 people and another 100 on
the west coast plus a call centre – that’s 1 HR person plus
a call centre for 1100 people & that call centre also caters
for (larger numbers of) other US employees
HR Manager Med Devices (US based)

16. On greater focus on transactional &
‘Hard’ HRM?
…there is less focus on … the sunshine side of HR – your
L&D, OD, being flathulach with comp & bens but a massive
demand on the other side: for skills on negotiations,
redundancies…& the administrative and logistical support
needed to process large pools of people exiting the
organisation
HR Director (Pharma)

17. On Strategic HRM
……(HR) is an increasingly strategic role as it involves
working with other key managers (e.g. supply chain,
engineering) in evaluating sites, deciding on
investment/divestment, outsourcing, evaluating labour costs.
For a company such as us, cash rich, the time have never
been better for acquisition. HR plays a key role in
acquisitions.
HR VP – US based

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