Internal and external environmental changes have an impact on human resource plans. So, the plans should be adaptable so that they can simply adapt to changing situations. Depending on the various external variables in which the organisation operates, human resource strategies may be short or long term.
The following are some of the factors that influence human resource planning:
1. Macro Factors
2. Micro Factors
3. Company Specific
1. Macro Factors
Macro environmental issues may have an impact on how a company manages its human resources.
(A) Economy
The current economic climate has an impact on human resource planning. More jobs will be created in an economy with a high GDP growth rate and a large increasing market. While currently struggling nations such as the United States and Greece are grappling with high debt loads and sluggish GDP growth, a double-dip recession might result in fewer jobs and more separation programmes.
(B) Labour Market
Human resource planning is influenced by labour availability, labour participation rate, skill levels, and labour skill availability, all of which have a direct or indirect impact.
(C) Demographic Factors
For example, demographic characteristics such as the average age of the working population, gender mix, and so on have an impact. When it comes to the demographics, India and Japan face two distinct issues. India will soon have the world's youngest population, with a population of 18-35 years old. As a result, there will be an increasing number of Gen Y workers in the workforce.
Companies would have to include development and ready-employability into all levels of their operations. Whereas in Japan, the majority of the working population is ageing, and with few young hands to replace them (traditionally, Japan has been a low birthrate country by choice), keeping their ageing workforce up to date on new technology and delaying retirement remains a difficulty.
(D) Regulatory Environment
The HRP will be influenced by the regulatory framework. There are economies that are heavily regulated by the government, such as India, and economies that are less regulated, such as the United States. With the majority of BPO employment leaving the US shores recently, the government endeavoured to bring these jobs back to the US.
2. Micro Factors
Micro (industry specific) elements affecting a company's human resource strategy can be divided into four categories:
(A) Industry Growth
Most industries have had healthy growth over the last decade or so, owing mostly to strong consumer demand in the home market. As a result, demand for human capital has increased across the board.
(B) Industry Attractiveness
Some industries, such as IT and retail, have been able to recruit more people as a result of their improved growth prospects, processes, and services, among other factors. Others have used a strong drawstring to attract manpower.
(C) Technology
Today, technology has infiltrated almost every industry. We live in a knowledge economy where technology drives practically everything. As a result, people's skill sets have needed to be developed and replenished.
Employability has become a factor since, in today's world, practically every sector assesses the technological readiness of new employees. This has had an impact on human resource demand, making it more ‘type' dependant rather than number-driven, as it was previously.
(D) Competition Climate
The tremendous expansion that most industries have seen in India has resulted in fierce competition for market share and market leadership in most industries. Today, most businesses are attempting to ensure that their top-line increases in tandem with their bottom-line.
Such competition has resulted in a similar level of competition when it comes to attracting and retaining human resources. Today, talent is the metric by which any company's performance is measured, and the ability to acquire them in big numbers and on a consistent basis establishes the competitive advantage.
3. The Company Specific Factors
The following are some of the company-specific aspects that influence a company's Human Resource Planning:
(A) Strategy
Any company's strategy plays a significant impact in the development of its human resource planning programmes. When Bharti-Airtel opted to outsource functions such as IT and software in order to focus on marketing as its core business in 2005, it irreversibly transformed the company's HRP. The goal at the time was to assemble a strong marketing team and gain as much market share as possible.
And, for the most part, the corporation was successful in its endeavours. Companies like Titan, who are growing and developing, have had to increase their HRP programmes as well. A company that has expanded from 10 crores in profits to around 1000 crores in less than ten years, with total revenues over 9000 crores, has required a big number of individuals with varied skill sets, all at a rapid pace.
(B) Inventory of Human Capital
HRP initiatives are influenced by a company's current human resource inventory. Every business strives for variety in terms of skill sets, gender mix, and other factors. For a company's new human resource need, the present set of employees is used as a reference set.
(C) Mobility of Human Resources
HRP plans are influenced by human resource mobility both within and outside the company. Internal mobility is primarily a result of growth, whereas external mobility is primarily a result of attrition. High mobility rates will necessitate a rapid replenishment of human resources. This mobility, or more accurately, the reason of mobility, varies per industry.