Analyse the impact of the key external environmental influences on HRM, using examples to illustrate.
The external environmental factors described in the following essay have a direct or indirect influence on HRM. To be effective, HR managers must monitor the environment on an ongoing basis; assess the impact of any changes; and be proactive in implementing policies and programs to deal with such challenges.
Economic Environment
The economic environment has a major impact on business in general and the management of human resources in particular. Economic conditions affect supply and demand for products and services, which, in turn, have a dramatic impact on the labour force by affecting the number and types of employees required, as well as an employer's ability to pay wages and provide benefits.
When the economy is healthy, companies often hire more workers as demand for products and services increases. Consequently, unemployment rates fall, there is more competition for qualified employees, and training and retention strategies increase in importance. Conversely, during a downturn, some firms reduce pay and benefits in order to retain workers. Other employers are forced to downsize, by offering attractive early retirement and early leave programs or by laying off and terminating employees. Unemployment rates rise, and employers are often overwhelmed with applicants when vacancies are advertised.
In most organizations today, productivity improvement is essential for long-term success. Through productivity gains, managers can reduce costs, conserve scarce resources, and increase profits. This leads to a win-win situation, since higher profits often result in better compensation and improved working conditions, thereby enhancing the employees' quality of work life and their motivation to further improve productivity.
Australia's relatively low productivity growth rate and high labour costs are of grave concern, since competition with foreign companies has become increasingly important. Australia's economic success increasingly depends on the ability of Australian employers to meet international quality and productivity standards and become more...
More Human Resource Management
essays:
What factors are likely to inhibit the strategic integration of an organisation's human resource policies with its business strategy?
... range of human resource policies contributes to business success (Tyson, 1995). The policies adopted by an organisation are strongly influenced by the economic and institutional environment (Foulkes and Livernash, 1989). An organisation should design human resource policies that suit its strategy ...
A Managerial Perspective of the Objectives of HRM Practices in Singapore: An Exploratory Study
... this economic crisis to succeed into the 21st century, they need to have highly skilled human capital to provide them with a competitive edge. The management of human resources (HR) is ...
Human Resources and Responsibilities
... University of Phoenix, Resource, GEN431Noe A. R., Hollenbeck, J. R., Gerhart, B., & Wright, P.M. (2007). Fundamentals of Human Resources. Managing Human Resources: Human resources and company performance ...
HR Roles and Responsibilities
... compensation, and pleasant work atmosphere (Noe, Hollenbeck, Gerhart, & Wright, 2004). The human aspect of human resource management is what makes managing a challenge. Globalization trends are one part of the diverse challenges faced ...
Changes in the business environment and labour market affect Human Resource Planning (HRP).
... changes of the environment, the task of managing people today's world is particularly challenges. Thus, more and more organizations emphasize on the HRP to forecast the demand for and supply of human resources. That ...
Flexible Work in Australia
... Achievements and challenges for work/life balance strategies in Australian organisations. International Journal of Human Resource Management, 16(1), 90-103Department of Workplace Relations and Small ...
With reference to relevant literature, discuss the notion that a career in the international hospitality and tourism industry is not a good idea.
... use of the term human resources to replace personnel management. The Human Resources prime objective thus is employee welfare and reduce staff turnover. [Mullins, (1998)]According to Sandra Ng, director of human resources, JW ...
Trends and Challenges in Human Resource Management
... issue that could undermine the nations global competitiveness. Other challenges facing human resource management are further technological developments, economic environments and legal environments. Fundamentals of human resource management define performance management ...