Human resource management trends in the USA ‐ Challenges in the midst of prosperity

Productivity gains powered by technological innovation have fueled expansion of the US economy during the 1990s. US economic prosperity has led to labor shortages, which are pushing organizations to engage in creative recruitment and retention practices and to employ workers from non‐traditional sources, leading to a more diverse workforce. HR professionals are realizing that they need to update their technological skills and develop systems for managing more virtual organizations. Human resource (HR) is also trying to become more of a strategic partner in firms. HR has the potential to create competitive advantage for firms by successfully combining a reputation as being an employer of choice with a high performance work system and an effective set of incentives.