Brief analysis of the most influential environmental factors for Tesco (the organization that will be used in the present paper as an ideal practical example) has to be the following:
- Political and legislative conditions have a significant impact on them because there are various regulations. Tesco uses all kind of job range: from flexible, lower-paid and locally-based jobs to highly-skilled, higher-paid and centrally-located jobs. For instance, the company employs various groups like student, disabled and elderly workers that are paid lower rates.
- Economic factors play an important role as well and they are mostly out of the company’s control.
- Demographic factor should be well analyzed as well, because such European trends as aging population and the increase in female workers influence the situation with the human resources
- The competitors’ activity is carefully researched by Tesco HR team too. Despite the fact that Tesco is a leading retailer in its sector in the UK, it should be noted that this market is highly competitive. Therefore the company should investigate the HRM approaches за its major competitors, such Asda, Sainsbury’s and Safeway in the UK, and do the same kind of research on other markets as well. (Burt and Sparks, 2003, pp.237-243)
- Another important factor if company’s reputation that should be supported.
The globalized nature of business and the situation on the local markets have a substantial impact over HR policies. Competition is huge, both local and foreign and the HR system have to be capable to meet all of the challenges. Human resource system should be a competitive advantage, a reliable support for the organization in such complicated business climate,
It is vital for any organization to understand the importance of the environmental analysis as a part of the strategic human resources management. The usage of macro-focused techniques by HR department could become one of the major co competitive advantages for the organization. The success will depend on HR department ability to gather the information, on its full and careful analysis, on the quick and efficient reaction to the environmental factors. Besides external factors that influence HRM, another elements of that need to be considered are internal factors such as organizational analysis and design, internal human resources analysis and of course HRM planning.