Internal and External Factors Affecting Human Resources

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Human resources departments play an important role in areas such as staffing, employee relations and legal compliance within organizations. Although it may often be seen as a separate function apart from the day-to-day operations of a business, because it is not directly involved in production of goods and services, an effective human resources department is necessary to achieve success. An HR department typically must deal with a number of internal and external factors as part of its function.

Human resource officer picking the person who stands out of a group.
Human resource officer picking the person who stands out of a group.

Available Labor Pool

A primary function of human resources departments is to maintain adequate staffing levels. An external factor which influences the ability to recruit qualified candidates is their availability. If the company needs to hire individuals with highly specialized skills, it may have difficulty locating and attracting suitable candidates, especially if the same skill sets are in demand throughout the entire industry. The company's geographic location may also be a factor, as it may need to focus its recruiting efforts outside the region if the labor pool is not large enough.

Interview with young man.
Interview with young man.

Goverment Regulations

The introduction of new government workplace regulations is an external factor that requires human resources to make sure the company is in compliance. Regulations can influence how a company goes about hiring, training, compensating and even disciplining its workers, and a misstep could result in sanctions against the company or even lawsuits filed by employees, prospective employees, vendors and customers. An example is the Americans with Disabilities Act, which in many cases created the need for companies to modify their workplaces to accommodate workers with disabilities.

Rearview of a business woman in a wheelchair.
Rearview of a business woman in a wheelchair.

Level of Growth

An internal factor that impacts human resources is the company's rate of current and project growth. Companies undergoing aggressive growth and rapid expansion may make it necessary for its human resources department to focus on recruitment and staffing. More stagnant companies may place a greater focus on efforts to retain current employees such as seeking ways to improve the company's culture and workplace environment or upgrading job descriptions and enhancing compensation and fringe benefits programs.

Bar graph of growth.
Bar graph of growth.

Use of Technology

Another internal factor is the willingness for the human resources department and company management to use technology to aid in certain key human resources functions can impact how the department allocates its time and resources. For example, companies that make greater use of tools such as online benefits management, where employees can make changes to their benefit plans on their own, provide human resources workers with more time to focus on other areas like recruiting or training.

Close up of hands using a tablet with statistics on the display.
Close up of hands using a tablet with statistics on the display.

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