4 External Factors that Affect Human Resource Management

When it comes to human resource management there are several factors that affect day-to-day operations. Adapting in this field is important because at a moments notice new legislation can be passed with an immediate effective date or corporate polices are changed where human resources feels the brunt. A well-developed strategy for your human resources department takes into consider external factors that might affect your department.

4 External Factors that Affect Human Resource Management

Government Regulations – With the introduction of new workplace compliance standards your human resources department is constantly under pressure to stay within the law. These types of regulations influence every process of the HR department, including hiring, training, compensation, termination, and much more. Without adhering to such regulations a company can be fined extensively which if it was bad enough could cause the company to shut down.

Economic Conditions – One of the biggest external influences is the shape of the current economy. Not only does it affect the talent pool, but it might affect your ability to hire anyone at all. One of the biggest ways to prepare against economic conditions is to not only know what’s happening in the world around you, but also create a plan for when there is an economic downturn. All companies can make due in a bad economy if they have a rainy day fund or plan to combat the harsh environment.

Technological Advancements – This is considered an external influence because when new technologies are introduced the HR department can start looking at how to downsize and look for ways to save money. A job that used to take 2-4 people could be cut to one done by a single person. Technology is revolutionizing the way we do business and not just from a consumer standpoint, but from an internal cost-savings way.

Workforce Demographics – As an older generation retires and a new generation enters the workforce the human resources department must look for ways to attract this new set of candidates. They must hire in a different way and offer different types of compensation packages that work for this younger generation. At the same time, they must offer a work environment contusive to how this generation works.

Those involved in human resource management does more than hiring and firing, they make sure that every type of external influence is listened to and proper procedures are followed to avoid lawsuits and sanctions. If you’re in HR make sure that you’re paying close attention to external influences because there is a good chance they’re affecting your job and the company you work for. So next time you talk to someone involved in the human resource management process think twice about the amount of factors that affect their job and how important it is for them to be on top of their game.

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Eric Friedman

Eric Friedman

Eric Friedman is the founder and CEO of eSkill Corporation, a leading provider of Web-based skills testing for pre-employment and training. Since 2003, eSkill.com has tested millions of job candidates for organizations worldwide such as Zappos, ADP, Coca-Cola, Randstad, and GE. With academic degrees in Psychology and Business and experience with both mature and expansion-stage company growth, Eric has focused on how to hire and motivate team members to be the best they can be for their companies.

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  1. I really appreciate you. The article is very useful to my study. Thank You. Good Luck

  2. Hi, thanks for this article.

    Another external factor to consider is the impact that trade unions or labour unions have on human resource planning.

  3. The concept of employee management is more than just making sure that people are doing their jobs; it’s a variety of procedures and strategies that can help you measure, monitor, and interact with the workforce that plays a huge role in your company. Here’s an interesting take on everything engagement: http://www.peoplehum.com/#bl

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