Effects of Environmental Factors in Limiting the Success of the HRP Process - Essay Example

? Effects of environmental factors in limiting the success of the HRP (Human Resource Planning) process Introduction The concept of forecasting the future business and environmental needs and planning for those needs is referred to as human resource planning. It aims at ensuring that the organization gets the appropriate people to do the exact task. Human resource planning involves matching the supply of workers working internally and the external supply of job seekers with the opening the organization expects to have over a given time frame.  Every organization is affected by internal and external elements that affect how the organization functions. In order to deal with these influences, it is essential for managers to develop their internal structures and employees’ behaviors to enable them handle the external forces. The environment in which an organization operates in is responsible for organizational activities and their eventual outcomes. This paper evaluates the effects of external factors on Human Resource Planning (Rothwell and Kazanas, 2003, P.176). Economic uncertainty Economic factors have a direct effect on recruitment, staffing and rewards that employers can give to their workers. The reason is that demand and supply law holds that when supply of labor is high, employers can obtain labour at lower prices, and when demand exceeds supply, and then employers have to pay higher wages and benefits. In instances where a country’s economy is growing at a positive rate, companies register high demand for their goods and services. In order to cope with such demand, organizations recruit more labor force, eventually lowering the rate of unemployment. When there is low level unemployment, the need for professional workers increases. This necessitates for organizations to enhance their employee retention and training strategies. When the economy is growing at a negative rate, demand for products and services reduces, and firms have to grapple with that in two ways. One option is laying off some workers, or lowering the amount of wages and benefits for in a bid to retain existing employees. Unemployment rates increase and employers are overwhelmed with applicants for advertised vacancies (Mathis and Jackson, 2008, P.454). Socio-cultural context Population trends are a key driver of the social sphere. This is demonstrated in the counter-cyclical shifts, in population trends. UK and other parts of the globe are registering increasing population growth. However, eastern and western Europe is registering low birth rates. United Kingdom in particular and Europe in general experience numbers of migrants, resulting in an increase in the size of the prospective labor force. Moreover, migrants also form a considerable portion of consumers for the country’s goods and services. Kandula (2007, p 59) notes that the high number of the aging citizens marks a loss in the pool of knowledge, skills and capabilities. The reason is that elderly people have so much knowledge from the organization, and their retirement and departure from the workforce creates a significant gap in organizations. Kandula further notes that elderly people have a vast number of needs and special services. For illustration, elderly people require welfare benefits and caregivers, which is extra consumption for the country. United Kingdom is also registering high an increasing gap between the affluent and the poor. This results in the rise of socio-economic disparity that creates an increase in asset prices. Cascio and Boudreau (2012, P.51) note that socio-economic developments influence organizations human resources in one way or the other, particularly through the supply and demand for labor and consumption goods. Other social trends are such as rising divorce rates and rising numbers of single parents, drug use and changing roots of social individuality. The effect of these trends results in solo-living among people of all ages. Reduced interest in social conformity, vanity and individual satisfaction also reflect on the changing social cultural contexts. High levels of selfishness and low levels of communalism in the wider society are the foundations of these social trends. These social changes affect the working life in various ways such as varying work schedules, as well as, personalized human resources and strategies (Pynes, 2009, P.39). Increased worker turnover and reduced tendency of forming unions also characterize the social trends. Technological context In the past few decades, the world has experience rapid technological changes that have revolutionized how organizations, manager and workers operate. These innovations include the internet, email, intranets, video-conferencing, HR databases, and electronic payroll systems. In the past decade, even more innovations have been launched and, which have implications on how people construct their identities. In the health and medical sector, technologies have resulted in expansive research, which help in increasing life expectancy levels. This impacts organizations in that people remain in organizations and in the labour market for a long time (Werner and DeSimone, 2012, P.193). Technological advancement has also had an impact on organizational communications. People currently communicate through emails and chats, unlike in the past years where letters and memos were used for organizational communication. These technologies render physical space and distance irrelevant in many business, working and human transactions. They radically affect how people work, and how they are managed within organizations (Kumar, 2011, P.38). Economic context A number of indicative trends are discernible in the economic sphere. For illustration, the market experiences uncertainties during depression. It has been established that, high presence of international corporations in a given economy result in increased unemployment rates. Multinationals result in global competition that may be unhealthy for national corporations. When the demand for national companies goes down, they may downsize their operations, leading to unemployment. These economic forces impinge on the demand for labour, types of labour required by firms and public organizations and labour supply. Firms have to adjust their HR policies and practice in accordance with these trends (Kumar, 2011, P.38). In the UK labour market, there is increased demand for higher-skilled labour and reduced demand for lower skilled workers. Nationally, employees may change jobs in their bid to look for greener pastures, which lead to high work turnover and high operating cost for employers. There are notable changes in the economy with the manufacturing and extractive sectors losing ground to private and public service sectors. This has an implication for education and training policy and for the employment prospects for existing and potential workers such as graduates out of college (Lawler and Mohrman, 2003, P.36). The European Union enacted an Act to make the region a one-off market, ushering in the free movement of labour. Apparently, skilled employees may work in any country that is signatory to the EU. In turn, organizations have to change their human resource strategies and procedures to incorporate this move. Environmental context In the recent past, heightened interests on the need for sustainable development have taken a front seat amongst corporate leaders and developers. Anyone wishing to start a vocation activity has to ensure that the activity is economically, environmentally and socially sustainable. Environmental sustainability implies that the investment activity should not harm or destroy the environment. Social sustainability means that the investment should not harm people, but rather treat them with honesty and respect. As such, organizations must select the modes of their operations and investments that are economically feasible and economically and environmentally friendly (Aswathappa, 2005, P.76). Organizations should enact human resource guidelines that are in line with the three facets of sustainability. Organizations must act in a sustainable manner to all their stakeholders including workers, customers, suppliers and other business partners. The green policies include teleconferencing to reduce travel, reduced paper use, implementing wellness programmes, fostering employees’ proper nutrition, fitness and healthy styles of living. In addition, concern for the environment in increasingly viewed as corporate responsibility. Thus, environmental sustainability has a direct influence on the human resources policies (Aswathappa, 2005, P.76). Political context There is political support for free market economies by European and international policy-makers. Organizations are legal bodies that have to observe regulations set by the government and parliament. The government enacts laws such as employment laws, labour laws, minimum wages laws and other statutes that directly affect organizations. As legal persons, organizations must completely comply with all laws set by the political class. Hence, the human resource policies have to abide by the set laws, 2005, P.107). Ethical context Since organizations are legal persons, they are responsible for abiding by the law and being held responsible for their actions. Organizations are expected to be socially responsible to all stakeholders including the society around which they operate. Ethical practices include ethical recruitment and selection where job descriptions are properly drafted with clear specifications. Pieper (1990, p 47) hold that organizations that have ethical practices register high levels of effectiveness and success. The reason is that, ethical human resource practices result in workers’ loyalty, dedication and confidence. HRP strategies in response to external factors Succession planning Environmental scanning involves assessing factors that affect the external labour market as well as an organization’s ability to find and secure talent from outside the organization. Economic conditions both national and international affect planning in that if the unemployment rate is low then organizations need to be more aggressive in recruiting talent as selection may be scarce. New or revised laws may raise the minimum wage and inflate the cost of labour thereby creating budgetary pressure to reduce labour expenses. Social concerns such as trends towards securing higher education can reduce the size of available external workforce in the short term, but in the long term the result is retention of applicants with more specialized skills (Goss, 1998, P.62). Technological changes affect products and people, for example, a new technology can be implemented in the organization and significantly reduce labour demands through automation of previously labour intensive processes. HR managers can attract experienced new hires by building an employer brand that is conducive to attracting top talent. This involves building a work environment and organizational culture that supports a positive working relationship and exceeds employee expectation. They can also develop strategies that focus on diversity or immigration, participating in career fairs and expos to market the organization. Other strategies include developing specialized recruitment programs specific to critical occupational groups. Firms can build an external talent pool by engaging students in their studies by encouraging them to pursue a career that will help the organization build a potential talent base (Rothwell and Kazanas, 2003, P.40). Talent management In the contemporary information era, talent has become the most strategic resource. People are viewed as the greatest value makers as talents reside in people. Intellectual capital has become an economic good, and there is a blurring of external and internal talent. The electronic community has enabled firms to obtain talent, as well as the intellectual assets from its stakeholders and business partners. These initiatives include external ideation platforms where firms solicit ideas from external sources for new services or new products. Or customer support portals where customers answer each other’s questions. Other initiatives include the use of contingent workers with some experts projecting that contingency employment will eventually represent 50% of the workforce (Rothwell, 2010, P.101). With the emergence of globalization, organizations now have access to talent that was previously inaccessible. Coupled with increased social changes and equality, there will be an increase in talent from emerging women group of employees and other marginalized groups. Professional managers of talent predict that the social changes will result in strategic competence for firms that will move in speed to grasp these upcoming talents. Talent mangers respond to these challenges by working with policy makers to foster more open and fluid talent markets at home. Jackson, Schuler and Werner, (2011, P.87) report that interface involving company leaders and decision makers with regards to talent and aptitude legislation results in a constant flow of talent that counterbalances with losses in offshore marketplaces. Conclusion While Sheehan was right in highlighting the environmental issues that affect human resource planning, he failed to mention that these very challenges also present opportunities. Shrewd HR managers are able to forecast the emerging trends and exploit opportunities presented by changes such as the use of technologies. Consequently, some organizations have been able to tap external talent by engaging them on social media and create environments where customers can solve each other’s problems. However, HR managers need to be alert to the changing external environment ranging from change in policy to flexible working environments.  Bibliography: Aswathappa, K. (2005). Human Resource And Personnel Management. 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