External Factors affect the HR practices. These factors are brought about by the business environment in which the organization operates.

The three major trends which should be considered are:

  • Demographics

    This refers to the characteristics of a population or workforce where the organization is situated. Examples of this include age, gender or social class. This type of trend may have an effect in relation to pension offerings, insurance packages, employee benefits and others.

  • Diversity

    The differences within the population/workplace. Recent changes can be seen in the number of women working in the organisations compared to decades ago. With the advent of globalisation, organisations become more culturally diverse and working patterns change to part-time, casual, seasonal positions to be able to handle the societal and the global market changes. Human resource has to make necessary adjustments to be able to take into consideration the different ethic and legal implications of their decisions with regards to HRM policies intended to protect employees. Employers have to contend with various issues that affect its employees such as rise in discrimination, unfair dismissal and sexual/racial harassment cases in recent years. These cases could have negative effects to employees in particular and the organisation in general. Anti-discrimination legislation over the past 30 years has provided a foundation for an increasing interest in diversity at work which is “about creating a working culture that seeks respects and values difference.”

  • Skills and Qualifications

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    As industries move from manual to more managerial professions in nature, there is a growing shift for more highly skilled graduates. If there are few skilled laborers in the market, employers are forced to compete by offering financial rewards, community investment etc.

Recruitment methods are broad and different, it is important that the job is described correctly and any personal specifications stated. Job recruitment methods can be through job centres, employment agencies/consultants, headhunting, and local/national newspapers. It is important that the correct media is chosen to ensure an appropriate response to the advertised post.