As thousands of disenchanted Americans swing the vote to make Donald Trump 45th President of the United States stock prices plunge around the world and outside the USA only President Putin is left smiling.
But what does this result mean for HR – especially in multinational companies? The plight of 11 million undocumented Mexicans in the USA will hardly touch multinationals – as these are mainly employed in the informal economy and by smaller employers. What will have a much bigger impact will be the prospect for repatriation of jobs back to the USA.
Trump will want to reel in the use of foreign outsourcing of manufacturing and customer service operations by American-owned corporations. A decision that will hit many economies in Asia, particularly China and India. What will be important, however, is how this will be achieved. One way that could benefit American businesses would be to reduce the very high rates of US corporation tax for those companies that reduce their dependence on outsourced operations abroad.
Another key policy change will be the removal of the international trade embargo against Russia. Trump has massive personal real estate interests in Russia and has signaled his intention to cultivate better relations with Putin. He is also skeptical about NATO and will not want to aggravate his ‘charm” offensive by doing anything that will displease his new ally. The lifting of the trade embargo would help the EU economy and be at least temporarily good for job creation in Europe too. It would indirectly also be a further signal for the EU not to erect any more barriers in the employment law field.
However, It is getting to look increasingly like the future world painted by George Orwell back in the 1940s in his book “1984” with three huge power blocks changing allegiances so that two are always at war with the third block. Trump’s rhetoric has been frequently anti-Chinese and as the USA and Russia team up China may find itself increasingly isolated. Turning its attentions increasingly to the EU as its trading partner. This will have profound effects on the EU, with new competition from Chinese brands and an upsurge in mergers and takeovers. Chinese companies will have high expectations from their human resources, be less likely to be concerned with rigid legislative compliance and far more open to capital substitution for labour. The stats of HRM is thus likely to decline or be forced to transform to a broader base of “resource management”.