Internal and External Influences on Human Resources

The objectives that management set for their human resources strategy are influenced by a variety of internal and external factors.

Internal influences on HRM objectives

Corporate objectives

E.g. an objective of cost minimisation results in the need for redundancies, delayering or other restructuring

Operational strategies

E.g. introduction of new IT or other systems and processes may require new staff training, fewer staff

Marketing strategies

E.g. new product development and entry into a new market may require changes to organisational structure and recruitment of a new sales team

Financial strategies

E.g. a decision to reduce costs by outsourcing training would result in changes to training programmes

External influences on HRM objectives

Market changes

E.g. a loss of market share to a competitor may require a change in divisional management or job losses to improve competitiveness

Economic changes

E.g. changes in the level of unemployment and the labour market will affect the supply of available people and their pay rates

Technological changes

E.g. the rapid growth of social networking may require changes to the way the business communicates with employees and customers

Social changes

E.g. the growing number of single-person households is increasing demand from employees for flexible working options

Political & legal changes

E.g. legislation on areas such as maximum working time and other employment rights impacts directly on workforce planning and remuneration