Key HRM Influences

Human Resource Management (HRM) is significantly impacted by economic, social, technological, and ethical factors, shaping strategies and practices within organisations.

Economic Influences

Economic Cycles and Labour Demand

• Economic Growth Phases: During periods of expansion, businesses tend to increase operations and require more employees.
  • Focus on sectors experiencing high demand.
  • Demand for skilled labour rises, influencing wage trends.

• Contractions (Recessions):
  • Reduced product demand leads to decreased labour requirements.
  • Results in downsizing and curtailed recruitment efforts.

Wage Growth and Inflationary Pressures

• Union Role:
  • High wage demands increase company pressures during inflationary periods.
• Operational Costs:
  • Rising wages escalate operational expenses, prompting adjustments in HR budgets.

Globalisation and Competitive Pressures

• Offshoring Recruitment:
  • Utilising global talent pools helps manage costs.
• Competitive Pressures:
  • Drive the necessity for efficient HR practices.

Unemployment's Role in Recruitment

• Low Unemployment:
  • Companies enhance compensation packages to attract scarce talent.
• High Unemployment:
  • Enables selective hiring and reduced compensation offers.

Case Study Examples

• During a boom, 'Company A' offers competitive wages to attract talent.
• In a recession, companies might offer non-monetary benefits like flexible working arrangements.

Technological Influences

Introduction

Technology affects HRM in aspects such as recruitment, remote work, training, and employee satisfaction.

Example of Company X:

• Utilises LinkedIn for recruitment.
• Facilitates remote working using Slack.
• Enhances training with e-learning tools.
• Increases engagement with technology solutions.

Social Media in Recruitment

• LinkedIn: Enhances recruitment processes by broadening candidate access and strengthening branding.

Virtual Work and Remote Collaboration

• Tools: Platforms like Zoom and Slack support remote work.
• Global Impact:
  • Benefits: Access to diverse talent, reduced costs.
  • Challenges: Maintaining engagement and productivity.

HR Solutions:

• Conduct regular virtual meetings.
• Implement performance metrics for accountability.

Social Influences

Changing Work Patterns

Remote Work

• Definition: Remote work involves performing job tasks outside conventional office environments.
• Tools Required: Utilisation of communication and project management platforms.

Gig Economy

• Definition: Gig economy consists of freelance and short-term roles rather than permanent positions.

Flexible Working Hours

• Advantages: Increases productivity and enhances work-life balance.

Diversity and Inclusion

Promoting Diversity

• Initiatives include inclusive recruitment strategies and diversity training programmes.

Living Standards Impact

Salary and Wages

• Influence wage structures and employee satisfaction.

Non-Monetary Benefits

• Improve quality of life through benefits like health insurance.

Work-Life Balance and Employee Expectations

Ethical Influences

Introduction

Ethical HRM: Transparency, fairness, compliance uphold organisational integrity and trust.

CSR Strategies in HR

• CSR Initiatives: Encompass community projects, diversity programmes, and sustainable practices.

Fair Treatment and Harassment

• Policy Implementation: Enacts anti-discrimination measures and equal opportunity employment.

HR's Role in Promoting CSR

• Aligns ethical practices to enhance company success.

Integrating economic, social, technological, and ethical influences in HRM is crucial for the development of effective and sustainable business strategies. Understanding these factors optimises HRM practices and supports organisational success.