Question

Discuss the following statement and provide examples to clarify your answer:
By analysing the external environment, human resource planners can assess likely current and future changes and determine possible impacts on the workforce and strategic corporate plans.

Answer 1

Analysis of external environment can provide vital insights about the state of economy, government's policies, competitive scenario, changes in regulatory and legal framework, changes in technological aspects of business to name a few. These external factors have considerbale impact on the human resource policies of the organisation as the HR might need to plan hiring of employees from specific sector, once economy and business scenario indicate towards a shift, and company plans a rapid expansion to cash the opportunity. It may need to design a training, development and upskilling plan to keep the employees up to date to take on a new project the company might undertake. Another task might be of succession planning to accomodate for the loss of top brass that might look for greener pastures taking advantage of the economic growth. HR may also have plan the human resources of a unit that needs to be created within the company as a result of a legal or statutory requirement. On the other hand, HR may also have to take the tough task of retrenchment of employees to keep the company afloat in the wake of an upcoming economic downturn or failure of an internal project undertaken by the company.

As a result of the changes in the external environment, the workforce might need to be added, removed, upskilled or relocated. The restructuring of manpower and revision of remuneration policies might also be on cards. The corporate plans may be accelerated, delayed or stalled in the wake of business scenario and future outlook.