HSC ways. Economic influences refer to changes in


HSC business studies 2017 human resource extended response

–       The response of human resource management to economic, technological and social influences.

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Human resource management is influenced by external and internal factors including economic, technological and social environments. Management must therefore be fully aware of what is happening within their company, the industry and the wider market to fully understand the factors which influence change and adjust human resource management accordingly. The primary objective of fulfilling these requirements are to motivate, attract and retain its workers which will ultimately assist in the development of a successful and profitable business.

 

Economic influences are important in a number of ways. Economic influences refer to changes in the level of spending in an economy. When the economy is booming, employees have greater bargaining power. Often several businesses want their skills. This is the situation currently with the mining boom. Mining businesses are competing to get the limited supply of employees with the skills they need. This is why wages and salaries in the mining sector rose so rapidly after 2010. On the other hand, if the economy is in recession, the demand for the business’s products will fall and it is necessary to reduce staff in order to cut costs. In the boom environment employees find it easier to negotiate benefits. Normally, there are skill shortages at these times and employers bid against each other to get the skills they need. This forces up the wages and salaries and is what happened during the mining boom. When economic activity declines, the power in the negotiation process shifts to the employer.

 

The changes currently taking place in society are dramatic and they are having a significant influence on employment relations. Social influences on business come from the attitudes, values and beliefs in society. Some of the most important social changes are changing work patterns and changing living standards.

 

Technological changes often have an impact on human resource management and their staffing requirements. Walmart, for example, established their dominance in the retailing industry through the technology of bar coding. Walmart was the first business to implement bar coding throughout the business. It meant the business could operate, for example, with just a third of the checkout staff they had before the change. The changes currently taking place in society are dramatic and they are having a significant influence on employment relations. Businesses that fail to respond risk losing their competitive advantage in the market place to businesses, like Walmart, that rapidly adopt the technology. Technological change also impacts on the current human resource management in a business. Changes in technology often mean employees need to be trained in the new technology. This has implications for liquidity in the short term. In the long term, adopting a new technology and the training associated with it is likely to improve productivity, lower costs and improve profitability.

 

Businesses are effected by a number of various influences in regard to human resource management. These businesses employ strategies to ensure the business successfully manages economic, social and technological influences.    

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