Human resource managers cannot do their jobs in a vacuum, since a variety of external variables have an impact on HRM. The macro context is provided by the environment, whereas the small unit is the business. External factors such as economic circumstances, labour markets, rules and regulations and labour unions are crucial. Each of these external variables, alone or in combination, can have an impact on an institution's HRM function. Changes in the external environment have a big influence on the people who work there. Technological obsolescence, cultural and societal shifts, and political policies are all examples of these transitions.
The external environment is made up of external variables that have an impact on an organization's human resources. Let's take a closer look at these elements:
1. Technological Advancement
Around the world, rapid technological developments and breakthroughs are occurring. As a result, technical workers are becoming more in demand. As a result, hiring technically proficient workers is vital to keep up with changing employment demands.
2. Economic Variables
Economic conditions have an impact on the organization's financial "health." Expansion of existing programmes and the development of new programmes are extremely likely in a favourable economic environment. Some programmes may need to be cut or cancelled if the situation becomes less favourable or worsens.
3. Employee Groups
Employee organisations have grown in strength in tandem with industrialization. Labour unions try to negotiate terms and conditions of work for its members with management.
4. Labor Markets
In labour markets, businesses seek employees while people offer their skills to businesses. All operations, but notably remuneration and external employment, are affected by labour supply and demand.
5. Changing Employer Demands
Organizations evolve, and as a result, their demands on employees vary as well. Because of the technological revolution and fierce corporate rivalry, current employees must adapt to ever-changing work situations and gain new skills, knowledge, and other talents in order to keep up with the new developments.
6. Legal Aspects
It is required to manage its workers in accordance with federal and state regulations. Factories Act, Trade Unions Act, Workmen's Compensation Act, Payment of Wages Act, Minimum Wages Act, Payment of Gratuity Act, and Maternity Benefit Act are some of the most important HRM-related laws passed in India.
7. Human Resource in the Country
The HRM function of any organisation is influenced by the structure, values, and degree of education of the country's human resource. The impact of personnel on the country may be investigated using the following methods:
- Changes in the structure of the workforce as a result of the admission of workers from various backgrounds.
- Changes in the structure of the workforce that have occurred through time and led to the formation of new values in organisations.
- A higher level of formal education has resulted in a shift in employee attitudes. Employees with a high level of education are continually challenging and questioning management's actions, and they demand a say in the company's activities that impact them.
As a result, a variety of environmental factors have an impact on the execution of certain HRM duties. Changes in the micro and macro environment make it more difficult for line and personnel administrators to supervise human resource contributions.