What are the external and internal factors influencing factors of HRM?

Human resource planning is a set of activities and processes directed toward the selection and retention of qualified employees. 

There are several factors affecting human resource planning. Before we delve in, let’s understand first what human resource planning involves.

What Is Human Resource Planning?

It’s the function of the human resources, or HR department, to forecast and fulfill the hiring needs of an organization. Once employees are recruited, HR then supports them through their tenure on board, through assessments and increments, promotions and training to ensure the employee feels fulfilled and grows. 

Factors affecting HRP (human resource planning) can be internal to the organization or external to the industry and economy at large.

Internal Factors Affecting HRP

Human resources works with the management across functions to understand their needs. It’s a critical role for the smooth functioning of all departments. Here are some internal factors affecting human resource planning:

• Recruitment Needs

  The key internal factors affecting human resource planning are the recruitment needs of various departments. One of the factors affecting HRP is the need to fill vacant positions. Recruitment is a process that identifies and invites applicants to apply for vacant positions.

• Budget 

  Effective HRP requires resources, money and time and many other resources for functioning. Besides this, all pay packages for hires must also fit into the available resources. Increments are also affected by budgetary constraints.

• Training Needs 

  HR’s role doesn’t end with recruitment. One of the significant internal factors affecting human resource planning is whether the staff needs upskilling or reskilling. 

It’s not enough to hire someone who has adequate skills to do their job well. Managers also ensure employees receive adequate on-the-job training.

• Work Environment

  A pleasant work environment is another factor for HR managers to consider. Employees want to be part of a team that’s committed to a common goal and where they enjoy the respect of co-workers and management. If an employee isn’t happy, they may leave to work elsewhere.

• Retrenchment 

  From time to time, organizations will need to let people go. These may be underperformers, or perhaps they’re employees who’d been hired for a specific project or location that’s shutting down. It falls to HR to see them through this difficult time.

These are the main internal factors affecting human resource planning. But the job of an HR manager doesn’t end there. Let’s consider the other factors at play.

External Factors Affecting HRP

Aside from the intra-organizational needs, there are external factors affecting human resource planning. Here are a few to consider:

• Competitive Conditions

  HR managers seek to maintain low costs, one of the most common factors affecting human resource planning. When there are many recruiters vying for the same talent, it can drive up costs.

• Regulatory Shifts 

  Whether it’s ensuring safety or labor laws, regulatory shifts impact HR practice. Organizations have to provide safe working conditions and appropriate training for their employees, minimizing the risk of accidents. These factors affecting human resource planning can improve working conditions.

• Advancing Technology 

  The HR manager must know recent developments in technology and trends which impact the planning process. In many organizations, new information technologies are being introduced that have a significant impact on functioning. The HR department needs to be two steps ahead. Working with the relevant departments to recruit talent to grow with the organization and offer skills that’ll be in demand for future projects is critical. 

While these are the external factors affecting human resource planning within an industry, the larger economic climate also has an impact. Here are the economic and climatic factors affecting HRP:

• Unforeseen Circumstances 

  One of the external factors affecting human resource planning is situations that arise out of the control of the organization. These can cause massive changes to how we function. The Covid-19 pandemic is a prime example. Almost overnight, businesses had to adapt to closures, social distancing norms and disruptions in the supply chain. Natural disasters and climate change may cause further changes in the future. While these factors affecting human resource planning are impossible to predict, organizations need to be prepared.

• Economic Conditions 

  The economic climate will affect an organization’s human resource planning as it impacts the bottom line. Changes in the labor market will affect the organization’s ability to attract and keep qualified employees.

• Demographic Changes

  Changes in the population may affect an organization’s ability to attract and retain qualified employees. This is one of the long-term external factors affecting human resource planning. An increase or decrease in population may cause an increase or decrease in the supply of qualified candidates. It may also strain the educational system, which will further impact hiring.

These are a few of the factors affecting human resource planning. Harappa’s Lead With Empathy pathway will help you work with teams better. Our dynamic faculty will help you foster trust among teams and enhance your leadership style. Empathy is a core skill in today’s workplace and world. Learn to lead with empathy for greater success. 

What are internal and external factors affecting HRM?

What are the main external factors influencing HRM?

What are the main internal factors influencing HRM?