HR or IR - its the context that makes it so

 At HR Conferences they continues to be  huge discussions on Industrial Relations (IR) versus Human Resource (HR).  

As my friend Promod Mhatme once explained to me the difference.

He argued that when Demand of the workforce exceeds the Supply, it becomes an HR Challenge. However, when the reverse is true, wherein Supply exceeds Demand, it becomes an IR Challenge.

As he explains, Individuals would continue to negotiate individually with their employer, where demand exceeds supply. This would be true both for a highly qualified professional as also for an artisan. Each would demand a market price, at a premium, as this is pure economics.

In environments, where Supply exceeds Demand, employees have no ability to negotiate terms and conditions, and in order to strengthen their negotiation power would resort to collective bargaining. Paradoxical, as it may seem, the formation of collective bargaining, at a unit level, is but a result of weakened negotiations. If despite this, they find no traction to re-set their ability to negotiate, membership to federations arise to further provide more strength. Some federations have no choice and to further expand to global federations as they find their muscle power weak in their own countries.

We have seen this play itself out. A decade ago, Pilots were an HR Challenge on account of paucity and high demand. Pilots salaries were high. Today, as Supply as increased, the pilots have had no choice but to press for their demands through collective efforts.

With concerns on outsourcing across the world, and attempts to bring back more jobs onshore, the demand for IT/ITES off shore is a very real concern.

Professionals on both sides of this debate, should view the issue of HR or IR not in isolation, but rather through this prism of context of demand and supply. In this, the challenge can turn to opportunities for remedial and resolutions.