External environmental influences Essay

The external environsal accompanimentors depict in the following essay run through a direct or indirect influence on HRM. To be effective, HR managers must monitor the environment on an ongoing basis assess the impact of any changes and be proactive in implementing policies and programs to stagger with such ch allenges.Economic EnvironmentThe economic environment has a major impact on melodic phrase in general and the circumspection of clement resources in exceptional. Economic conditions affect supply and demand for products and services, which, in turn, project a dramatic impact on the weary might by touch the spell and types of employees required, as well as an employers big businessman to pass on wages and provide benefits.When the economy is healthy, companies a great deal hire more fixers as demand for products and services increases. Consequently, unemployment rates fall, there is more competition for answer employees, and training and retention strategies increase in importance. Conversely, during a downturn, some firms reduce afford and benefits in vow to retain perishers. Other employers atomic number 18 forced to downsize, by offering attractive primeval retirement and earlier leave programs or by laying off and terminating employees. Unemployment rates rise, and employers are often overwhelmed with applicants when vacancies are advertised.In al around organizations today, productiveness improvement is essential for long-term success. Through productivity gains, managers can reduce costs, preserves scarce resources, and increase profits. This leads to a win-win situation, since higher(prenominal) profits often result in better pay and improved landing conditions, thereby enhancing the employees fictional character of written report life and their motivation to further improve productivity.Australias relatively low productivity growth rate and high dig up costs are of weighty concern, since competition with foreign companies has become increasely important. Australias economic success increasingly depends on the ability of Australian employers to meet outside(a) quality andproductivity standards and become more cost-competitive. This applies to firms selling products and services in the domestic foodstuff, in which foreign competition is increasingly a factor, as well as those with international markets. cranch Market ConditionsThe work market is the geographic area from which an organization recruits employees and where individuals adjudicate employment. In opposite words, it is the area in which the forces of supply and demand interact. The labour market is often different for various employee groups inside an organization. While clerical and technical employees are generally recruited locally, the labour market for senior managers and highly specialise employees is often national or even international in scope.One measure of an organizations effectiveness is its ability to compete suc cessfully for high calibre human resources. umteen factors motivate candidates to seek employment with a particular organization, including type of business/industry, reputation, opportunities for advancement, fee, ruminate security, and working conditions.Location and climate and new-sprung(prenominal)(prenominal) aspects of a firms physiologic surroundings, such as housing, commuting, and living costs, can help or hinder a firms ability to attract and retain employees.Recent population shifts to the coastal and small towns and rural areas can be attributed, at least in part, to the desire of galore(postnominal) individuals to work and live in what they perceive to be a more desirable physical environment. Such shifts alter the demand for and supply of individuals in local labour markets, a factor that firms must always exact into account when deciding where to establish a new venture, expand, or downsize.Because the labour market is non controlled or influenced by any on e factor, it is unstructured and often unpredictable. Nevertheless, organizations must constantly monitor and track trends affecting supply and demand of humanresources. By doing so, they can gather in bring ination about the prevailing pay rates for employees with particular talents or skills, and estimate how difficult it is likely to be to attract and recruit staff. Labour market conditions should likewise be monitored to determine pay and emerging trends (such as the changing composition of the labour force) as well as changing values and expressations, so that policies and programs can be adapted and/or designed in order to recognize and take advantage of these trends.GlobalizationGlobalization refers to the tendency of firms to breed their sales or manufacturing to new markets abroad. For businesses everywhere, the rate of globalization in the historic few long time has been nix short of phenomenal.The bottom line is that the growing integration of the world economy into a single, huge mart is increasing the intensity of competition in a wide range of manufacturing and service industries.Production is congruous globalized, too, as firms around the world put manufacturing facilities where they will be most advantageous. Also, there are increasing numbers of multinational corporationsfirms that conduct a vauntingly part of business outside the country in which they are headquartered and that locate a significant percentage of their physical facilities and human resources in otherwise countries. umpteen organizations are locating new plants in areas where wages and other operating costs are lower. For example, Australias Hewlett Packards computing devices are assembled in Singapore.While cheaper labour is one reason for transferring operations abroad, a nonher is to knap into what Fortune magazine calls a vast new supply of skilled labour around the world. umteen multinational firms set up manufacturing plants abroad, not scarcely to establish beachheads in promising markets, but also to utilize that countrys professionals and engineers.This globalization of markets and manufacturing has vastly increased international competition. Throughout the world, organizations that formerlycompeted only with local or national firmsfrom airlines to automobile makers to banksare now facing an onslaught of foreign competitors. From boosting the productivity of a global labour force to formulating bringion, training, and compensation policies for expatriate employees, managing globalization and its effects on engagement will thus continue to be a major HR challenge in the years to come.Demographic Trends and Increasing Work-force DiversityDemographics refers to the characteristics of the work force, which overwhelm age, sex, marital status, and education level. Demographic changes occur easy and are well measured, which means that they are known in advance. The fact that Australias labour force is becoming increasingly diverse is o ne of the major challenges confronting HR managers today. Diversity refers to any attribute that gentleman are likely to use to tell themselves, that person is different from me, and thus includes such factors as race, gender, age, values, and pagan norms.Population GrowthThe single most important factor governing the size and composition of the labour force is population growth. Currently, the fastest growing groups in the Australian work force are women, microscopic minorities, Aboriginal people, and persons with disabilities.AgeThe mollycoddle boomers, born between 1946 and 1965, began crowding into the labour market in the belatedly 1960s. The sheer number of boomers helped to expand the economy and made it easier for HR departments to concentrate on on issues such as cost containment, since recruitment and selection, while important, were not the most critical problems. During the 1990s, individuals in this population bulge undergo a great deal of competition for advanc ement. This challenged managers to find new strategies for forging career paths, such as lateral moves, to keep this group motivated and satisfied. Theoldest of the baby boomers are now in their mid-fifties.Life expectancies confuse increased and fertility rates do declined, the average age of the population is increasing substantially.Since some baby boomers have already taken advantage of generous early retirement programs and many more will be retiring over the 25 years, pension plan and social security benefits issues are showtime to present a very serious concern for employers and organisations, given the smaller labour force usable to support the retirees.Many organizations with a primary interest in the younger age group, such as retail establishments and fast-food chains, have already started to feel the impact of the fact that the population from which they have traditionally gained customers and parttime workers is starting to shrink dramatically. Some employers have undertaken initiatives to attract older workers, especially those who have taken early retirement, by offering job sharing and expanding the number of temporary hours available. For example, McDonalds Restaurants of Australia is another organization that is actively recruiting seniors, as well as directing advertising efforts to appeal to the senior market.HR specialists must take to be that many HR policies, benefits plans, and reward systems that attract and motivate employees in one age group may not appeal to those in another due to differing values and priorities.EducationThe level of education of the Australian labour force is increasing at a significant rate. more Australians are pursuing higher education, through a variety of institutions ranging from universities and colleges/TAFEs to trade schools, private-sector organizations, and professional associations.growth in the number of cooperative-education programs, designed to modify students to gain work experience while still attending school, and ofdistance-education opportunities, which mesh Internet engineering with the aboriginal need to continue learning.Given the higher expectations of the better-educated labour force, managers are expected to try to as indisputable that the talents and capabilities of employees are fully utilized and that opportunities are provided for career growth. In todays economic climate, doing so is not always possible.Visible and Ethnic MinoritiesThe proportion of visible and ethnic minorities entering the Australian labour market is growing, in jobs ranging from general labour to technical, professional, and skilled trades.Ethnic diversity is also increasing. Thus, HR specialists must jibe that policies and programs are developed in their organizations to accommodate and celebrate the diverse cultural characteristics of visible and ethnic nonage employees, something that requires a good deal more than ensuring compliance with human rights polity.WomenThe growi ng presence of women has been one of the dominant trends in Australias labour force since the 1950s. Factors contributing to the dramatic increase in female participation rate include smaller family size, increased divorce rate, the need and desire for dual family incomes, increased educational level, and the availability of more-flexible working hours and part-time jobs.The employment rate for women has also continued to climb. Recent studies have shown that women have moved into occupations in which the unemployment rate is low, while men tend to be clustered in jobs in which the risk of unemployment is much higher.73 There is still strong evidence that women are underutilized in the Australian work force, however.Aboriginal Peoples endemic peoples are still facing considerable difficulty in meeting jobs and advancing in the workplace.Persons with DisabilitiesDespite the fact that human rights legislation in every Australian jurisdiction prohibits discrimination against individua ls with disabilities, Australians with disabilities continue to confront physical barriers to equality every day. Inaccessibility is still the rule, not the exception. Even though studies show that there are no performance differences in terms of productivity, attendance, and average tenure between employees who classify themselves as having a disability and those who do not, persons with disabilities continue on average to experience high rates of unemployment and underemployment, and lower pay. boilers suit Impact of Increasing DiversityManagers must be extremely aware that relate to the work-force diversity described above are significant value differences about the overall importance of work, what aspects or characteristics of a job are most important, tolerance of discipline in terms of hours and pace of work, attitudes toward authority, and definition of loyalty. Employees increasingly expect to exercise more freedom from management control, and are more demanding and questio ning. More people are seek jobsthat are attuned to their private values and provide the opportunity for them to bring their personalities to work with them,87 as well as flexible work arrangements and other programs that will enable them to balance their work and personal lives.88 Policies and practices must be adapted to embrace the diversity of the dominant values represented in an organizations work force.Trends in the Nature of Jobs and WorkMajor changes have been occurring in the nature of jobs and work, in part as a response to a number of the environmental challenges already discussed.Telecommuting, is the use of micro computing machines, networks, and other communications engineering (such as fax machines) to perform in the home work that is traditionally done in the workplace.Many firms are using more contingent employeesdefined as workers who do not have level(p) full-time or part-time employment statusto handle vacation and leave coverage, peak-period demands, extra wo rkload, and narrow tasks or assignments. Included are abbreviate workers, seasonal workers, casual and non-regular part-time employees, temporary employees, independent contractors (freelancers), consultants, and hired employees.108 Contingent workers currently account for about 12 percent of all jobs in Australia, a encrypt that is expected to reach 25 percent by 2010.109There are more regular part-time employees in Australia than ever before. These are individuals who work less hours than fulltime core employees, typically during peak periods (such as evenings and weekends in retail stores and restaurants). Approximately 33 percent of all employed women work part-time two-thirds of them by preference, and the other one third because they were unable to obtain full-time employment.112 The fact that part-time workers are often compensable less than their full-time counterpartsand may not have benefits coveragehas raised some major comeliness concerns.Small businesses, classifi ed as firms with fewer than 50 employees, whether sole proprietorships, partnerships or corporations, are a large and increasingly important part of the Australian economy.A Service SocietyEmployment trends in Australia have been experiencing dramatic change. The primary sector, which includes agriculture, fishing and trapping, forestry, and mining, now represents only 2.8 percent of jobs. While the secondarysector (manufacturing and construction) has big In common with trends in Western Europe and the U.S., the sector of the Australian economy accounting for the greatest growth in recent decades is the tertiary or service sector, which includes unexclusive administration, personal and business services, finance, trade, public utilities, and transportation/communications.While much of this growth is attributable to rapid technological change (initially in the form of automation and more recently in improvements in IT), part is due to an increase in outsourcing of particular activi ties by primary- and secondary-sector firms to lessening costs and increase efficiency. Subcontracted functions range from building maintenance to provision of security, cafeteria management and slipstream services to payroll and training and development.Since all jobs in this sector involve the provision of service, often in person but increasingly through the design, installation, and maintenance of service-providing technologies (such as automated banking machines and cable television), effectively managing and actuate human resources is critical. Although there are some lesser-skilled jobs (in housekeeping and food services, for example), many service-sector jobs demand knowledge workers, employees who commute information into a product or service, whose responsibilities include planning, problem solving, and decision making.Knowledge Work and humanity Capital attention expert Peter Drucker has said that the foundation of an organization is not money or capital or technolog yits knowledge and education (human capital). By 2005, knowledge workers will be the single largest group in the labour force.116 He is not alone in this belief. Many experts think that the distinguishing characteristic of companies today and tomorrow is this growing emphasis on human capital. Jobs today in all sectors demand a level of expertise far beyond that required of most workers 20 or 30 years ago, which means that human capital is quickly replacing machines as the basis for most firms success. Furthermore, it is notunusual for more than one-quarter of sales to come from products less than five years old. As a result, innovatingcreating new products, new services, and new ways of turning out goods more cheaplyhas become the most urgent concern of corporations everywhere.11For managers, the challenge of fostering intellectual or human capital lies in the fact that knowledge workers must be managed differently than workers of previous generations. New HRM systems and skills a re required to select and train such employees, move on self-discipline, win employee commitment, and spark creativity. Apple computers is one organization that has learned how to encourage creativity and access the skills and ideas of all of its employees118TechnologyIt is mainly through technological innovation that firms develop new products and services and/or improve existing ones in order to die hard competitive, and gain the productivity and quality needed for competitive advantage. Manufacturing advances, such as robotics and computer-aided design / computer-aided manufacturing (CAD/CAM), have eliminated many blue-collar jobs, replacing them with fewer but more highly skilled jobs. When robots were introduced in the automobile industry, for instance, there was a major decrease in the demand for welders and painters, but a new demand for technicians who could program, install, and service automated equipment.89 Due to computer technology, similar changes have been occurring in the nature of office work. Optical scanners, computerized x-ray scanners, and Magnetic Resonance imaging (MRI) are technological advances that have ca apply major occupational changes in the medical field over the past few decades, and such advances are beingness made every day.Currently, for example, a few doctors are attempting to animate heart surgery using computer assistance and robotic arms.90 The overall impact of the technological changes affecting around every field is that labour-intensive blue-collar and clerical jobs have been decreasing, while technical, managerial, and professional jobs are on the increase. This shift in employment opportunities has many implications for organizations jobs and organizationstructures are being redesigned new incentive and compensation plans are being instituted revised job descriptions are being written and new programs are being instituted for employee selection, evaluation, and training/retrainingall with the help of HR specia lists.Unfortunately, the training of the Australian labour force has not kept pace with the rate of technological change and innovation. Consequently, there is a scarcity of skills in certain fields.Many Australian firms, such as Telstra, inevitably have to look outside of Australia to fill their advanced openings, which is rather disturbing given the fact that there are currently about 1.1 million Australians want employment.While much of the impact of information technology has been positive, it has also led to some organizational problems. For many employees, it has created anxiety, tension, resentment, and alienation. Unions have consistently expressed concerns about job displacement and health hazards, such as those related to video display terminals. All of these issues must be addressed through effective HRM practices such as information sharing, counselling, ergonomic refitting, job redesign, and training. training technology has also hastened what experts call the fall of hierarchy, or procession of egalitarianism. Power and authority are spread more evenly among all employees. For example, with distributed computing, every employee with a personal computer on his or her desk can tap into the firms computer network and obtain needed information. Expecting employees to make more decisions has implications for selection, training, and compensation.Questions concerning data control, accuracy, right to privacy, and ethics are at the core of a growing controversy brought about by the new information technologies. Sophisticated computerized control systems are apply to monitor employee speed, accuracy, and efficiency in some firms, including IBM Australia. More and more firms are also observe employee e-mail, component partmail, telephone conversations, and computer usage, and some now monitor employee behaviour using video watchfulness.94 Reasons for such monitoring include eliminating time wastage, deterring abuse of company resources, protecting n etwork security, preventing misappropriation of company resources, ensuring compliance with health and safety standards and regulations and other legislation, and monitoring employee behaviour and performance. Employers considering monitoring employees should be aware that doing so may present both practical and legal problemssuch monitoring may have counterproductive results such as increased job stress, decreased morale and productivity, lowered employee self-esteem, and decreased trust in and respect for the employer setting up and maintaining a monitoring system may involve significant economic costs surveillance of employees in the workplace raises the controversial legal issue of employee privacy rights.Human visions Information SystemsChanging technology has also had major implications for HR departments. Over the past few decades, many firms introduced a Human Resources Information System (HRIS) to store detailed information on employees, HR policies and procedures, governm ent laws and regulations, collective agreements, etc. HRIS computer applications include salary and benefits administration tracking statistics on absenteeism, grievances, and health and safety collecting data for government statistical reporting and employment equity purposes advertising jobs and recruiting candidates and communicating with employees.Computers are now being used not only for storage, retrieval and analysis of information but for broader applications, including basic report production, long-range predict and strategic planning, and evaluation of HR policies and practices. Such systems can decrease time lost to comparatively non-productive work like data entry and employee scheduling, thereby providing time for HR department employees and managers throughout the firmto focus on more strategic issues.Today, many Australian firms, are utilizing computer technology even more extensively by introducing a Human Resources Management System (HRMS), defined as an informatio n management system accessible to staff at all levels, designed to ensure that the organizations human resources are recruited, selected, developed, employed, deployed, and supported effectively. Functional applications include succession planning, pension plan projections and eligibility monitoring, interactive employee retirement training, and more. self-service applications for employees and managers ensure that information reaches those who need it, with one-time data entry, less maintenance, and improved quality and accuracy.GovernmentVarious laws enacted by governments have had and will continue to have a dramatic impact on the employer-employee relationship in Australia. In one recent survey, 70 percent of the HR specialists responding cited changing regulatory requirements as a major factor altering their work environment.The legal framework for employment includes constitutional law, particularly the contract of Rights and Freedoms acts of parliament common law, which is t he accumulation of judicial precedents that do not derive from specific pieces of legislation and contract law, which governs collective agreements and individual employment contracts. Such laws impose specific requirements and constraints on management policies, procedures, and practices. Some of the employment-related legislation is aimed at prohibiting discrimination in various aspects and terms and conditions of employment, such as human rights, employment equity, and pay equity. Other laws require employers to meet certain obligations, such as occupational health and safety, employment standards, and labour relations. Still others make various payments mandatory, such as Workers Compensation, Employment Insurance, and the Australia Superannuation Plans.All of the laws mentioned above and their regulations have importantimplications for all managers, since they mustStay abreast of legislative developments is a major ongoing responsibility. Often, the HR department staff members play a major role in helping other managers to remain current by circulating reading material or holding seminars.Develop and administer policies and practices that ensure compliance to avoid loss of government contracts, suits by affected employees or regulatory bodies, fines, and bad publicity. elbow grease to ensure that compliance does not interfere with the efficient and effective accomplishment of their other responsibilities. This means purpose ways to comply with regulatory requirements with as little cost and disruption as possible. For example, many firms have developed manuals, videotapes, and self-administered quizzes, such that employees can study independently at home or at work during off-peak times, and submit their completed quizzes for evaluation and verification of training completion.Bibliography1. Baron, J.N. and Kreps, D.M. (1999) Consistent human resourcepractices,California Management Review, 41(3), pp.29-53.2. 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