What are factors outside an organizations boundaries that affect a firms human resources make up called?

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.

Originally posted on Workology blog September, 2017.

Eric Friedman is the Founder and CEO of eSkill Corporation, a leading provider of Web-based skill testing for pre-employment and training. The company's founding vision was to create software that can customize a skills test to fit the knowledge requirements for any job position. Holder of an MBA from MITís Sloan School of Management and an undergraduate degree in Psychology from Brown University, Eric has helped launch five startups since 1992.

With 20 years in the game, he is now sharing his vast experience on eSkill's blog, while mentoring his team and constantly expanding his company.

Connect with him on LinkedIn.

• 9 
• 101943 views

The SHRM Blog does not accept solicitation for guest posts.