What 4 External Factors Affect Human Resource Management?

There are many factors that would affect human resource management.

However the main four are considered to be:

• Political climate
• Economic climate
• Company strategies
• Technological developments

Political Climate

The political climate can have a great affect on any business and subsequent business departments such as human resource management. If the government decides on spending cuts or increasing taxes on businesses then this will dramatically affect the running of the business. Department budgets may have to be trimmed or the department may even have to be completely scrapped.

Economic Climate

The economic climate can be closely associated with the political climate. However, it also includes how the banks are coping and if they are willing to lend to businesses. Again if the banks are cautious and so do not lend and in fact try and get their money back quicker, it can spell disaster for a business. This in turn, will mean big changes for how human resources in a company would be run.

Company Strategies

Companies will also have plans and strategies on how best to move forward. These will of course largely be determined by the two previous factors mentioned. Whatever the company choose to do, will definitely affect how the human resource management will perform.

Technological developments

Technological developments will greatly affect how human resource management departments conduct their business. Instead of having to bring staff in for physical meetings, they can now do video-calling, send emails or even SMS text messages.

Political, Economic, Technological, Social all these affect HRM.

Political:- when the state of national politics dictate how HR or employment is going to take place or the political climate is either good/bad then this determines whether H is either going to recruit or not.
Economic: Adverse economic conditions in most cases lead to a freeze in recruitment or even downsizing since if a company is not doing well the it might need to cut down on HR so that it might be let with the size that meets the immediate needs in terms of available turnover.

Technological factors: This external factors effect can be clearly seen when computers hit the corporate world, lots of downsizing took place because computers could do most of the jobs. A job done by 2-4 people could be cut to one done by just a single person e.g. An accounting package could be used to cater for 3 jobs or so since manual entries and paper work was reduced.

Social: This can be about the culture of a people e.g. There are areas where women are not allowed to work by their culture, thus even if a firm wanted to recruit a woman for a particular job e.g. PRO, etc it might find it difficult and may have to reconsider that position.

Discuss five external environmental factors that affect Human Resource Management

1)globalisation
2)workforce demographic
3)nature of work
4)outsourcing jobs
5)technological advances

Explain how organisation functions within a specific,unique environment and how external factors influence human resource management in an organisation.

Hi,
a PEST or PESTLE analysis is a tool to provide a framework to look at the external factors on an organisation.
How is this relevant? Well f the external review showed WHY you had difficulty recruiting (skills shortage, salary rates, etc) then your HRM strategy could and should be adapted to cope with the difficulties created by the environment - equally if you has vacancies and there was a large pool of people applying then you may well change your recruitment strategy to cope with the increase in applicants.
External influences also impact training, L&D and many other HRM strategies.
Check out:

The CIPD
How to write A PESTLE analysis for HR

Global

The environmental factors are very important in determining the behavior and the response of the HRM. Some of the key points are as follow:
Political: Political uncertainty directly impact like if there is a procession going on and roads are blocked then how employees can go to office
Economic: If there is high inflation employees will demand more and if there is rapid economic growth then more employment opportunities will be available and in good economical conditions skilled labor is also easily available.
Social: If women are not working in any state then major chunk will consist of male and social interaction will be different.
Technology: new technology requires new expertise and in a high tech company skilled HR is required and vice versa.