External Environment & Hr Planning

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External Environment
When most people think of Human Resource Planning, the first thing that usually comes to mind is the internal environment of the organization. There is, however; the external environment which is just as important. The external environment consists of governmental policies, condition of the economy, demographics, technology, international influences, competitors, and a changing labor force (Greer, Peters & Youngblood, 1998). Neglecting the external environment can have devastating effects on an organization. Entire civilizations have vanished for failing to address external environmental factors and the need to adapt in an ever-changing environment. You may ask what extinct cultures have to do with HR planning and the external environment? Well, the answer is, everything. A great example of this is Easter Island. Mismanaging their natural resources, the forests in this case, left the island unable to sustain life. No one knows exactly what happened to the inhabitants, but we do know why their culture became extinct. The same thing can happen to any organization that neglects the external environment. Environmental Scanning

The most important part of HR planning regarding the external environment is environmental scanning, a means to study the environmental climate to identify opportunity or potential dangers to an organization (Jackson & Mathis, 2008). As we move into the next century, the necessity to adapt, change, and update will be more important than in the past. Being able to adapt while staying flexible are essential if an organization is to be a successful in dealing and being able to predict changes in the organizational landscape. In order to effectively predict changes, an organization has to identify and address the changes as they are happening. Environmental scanning will assure that the proper policies and guidelines are being followed correctly. Environmental scanning consists of six phases. The first phase is to figure out which elements of the external environment to analyze and being able to report findings. The second phase is to compile data and deciding what data is used. The third phase is to map out trends from the data collected. Trending makes the data easier to analyze and read. The fourth phase is to try and figure out what effects the trends will have on the organization. The fifth phase is to figure out which issues are the most relevant. The sixth phase is to ascertain which relevant issues are the most important. If used correctly, environmental scanning can be instrumental in HR planning (Greer, Peters & Youngblood, 1998). Changing Demographics

Demographics are one of the most important elements in the workforce. Immigration, age, and a declining birthrate have negatively affected the ability to fill positions. A smaller, younger workforce has incited many companies to seek out ways to retain the aging baby boomer segment. As these baby boomers retire, it is imperative to ensure younger workers are mentored so the knowledge of the older workers is not lost. Diversity in the labor pool is also another important factor to consider in HR planning. As baby boomers retire, the labor pool of skilled workers shrinks more and more. Unfortunately, HR managers are not doing enough to tap into the ever-growing labor pool of skilled immigrant workers. In order to stay competitive, HR strategy needs to include this new workforce of immigrants in its’ strategic planning process. Other demographic factors that have an impact on the external environment are internet users, changes in technology, telecommuting, globalization, and offshoring. Advances in technology can enable firms to reduce the amount workers required. Telecommuting can decrease overhead by saving office space. Globalization and offshoring has greatly increased the amount of outsourcing of HR duties. Although Globalization and outsourcing save firms lots of money, they make the HR planning more complex (Burke,...
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