Factors affecting Human Resource Plans
External factor:
They are the factors which affect the Human Resource Planning externally. They include:-
1. Government policies: Policies of the government like labour policy, industrial policy, policy
towards reserving certain jobs for different communities and sons-of-the-soil etc affect
Human Resource Planning.
2. Level of economic development: Level of economic development determines the level of
human resource development in the country and thereby the supply of human resources
in the future in the country.
3. Information Technology: Information technology brought amazing shifts in the way
business operates. These shifts include Business Process Reengineering (BPR), Enterprise
Resource Planning (ERP) and Supply Chain Management (SCM). These changes brought
unprecedented reduction in human resource and increase in software specialists.
Example: Computer-aided design (CAD) and computer-aided technology (CAT) also
reduced the existing requirement of human resource.
4. Level of Technology: Technology is the application of knowledge to practical tasks which
lead to new inventions and discoveries. The invention of the latest technology determines
the kind of human resources required.
5. Business Environment: Business environment means the internal and external factors
influencing the business. Business environmental factors influences the volume of mix of
production and thereby the supply of human resources in the future in the country.
6. International factors: International factors like the demand and supply of Human
resources in various countries also affects Human Resource Planning.
Internal factors:
1. Company Strategies: The organisation’s policies and strategies relating to expansion,
diversification etc. determines the human resource demand in terms of Quantity and
Quality
2. Human Resource policies: Human Resource policies of the company regarding quality of
human resources, compensation level, quality of working conditions etc. influence Human
Resource Planning.
3. Job analysis: Job analysis means detailed study of the job including the skills needed for a
particular job. Human Resource Planning is based on job analysis which determines the
kind of employees to be procured.
4. Time Horizon: Company’s planning differs according to the competitive environment i.e.
companies with stable competitive environment can plan for the long run whereas firms
without a stable environment can only plan for short term. Therefore, when there are
many competitors entering business/ when there is rapid change in social and economic
conditions of business/ if there is constant change in demand patterns/ when there exists
poor management practice, then short term planning is adopted or vice-versa for long-
term planning.
5. Type and Quality of Information: Any planning process needs qualitative and accurate
information about the organisational structure, capital budget, functional area objectives,
level of technology being used, job analysis, recruitment sources, retirement plans,
compensation levels of employees etc. Therefore Human Resource Planning is determined
on the basis of the type and quality of information.
6. Company’s production and operational policy: Company’s policies regarding how much
to produce and how much to purchase from outside in order to manufacture the final
product influences the number and kind of people required.
7. Trade Unions: If the unions declare that they will not work for more than 8 hours a day, it
affects the Human Resource Planning. Therefore influence of trade unions regarding the
number of working hours per week, recruitment sources etc. affect Human Resource
Planning.
8. Organisational Growth Cycles: At starting stage the organisation is small and the need of
employees is usually smaller, but when the organisation enters the growth phase more
young people need to be hired. Similarly, in the declining/recession/downturn phase
Human Resource Planning is done to re-trench the employees.
