Human resource (HR) management is a business function responsible for locating, motivating, and retaining quality employees. Factors affecting human resource management include the current labor environment, organizational changes, and the availability of skilled employees in the workforce. Other factors may also be present — such as demographics and multiculturalism — depending on the company’s location and internal needs. Human resource directors are typically responsible for discovering any HR management factors and limiting their effects on the company. In most cases, this is an ongoing issue.
The current labor environment in a given area is often out of the control of most businesses. For example, government entities may command the use of labor, tight regulations create severe restrictions for hiring employees, wage laws prevent the use of large groups of unskilled workers, or labor unions have a strong presence in the market. The human resource director is responsible for keeping tabs on these issues and informing other executives about them. External factors may require specific changes to a company’s employment policy to meet demands, and a failure to do so can have great negative consequences for a company.
Organizational changes represent any number of internal factors affecting human resource management. Common internal factors can be changes from unskilled to skilled workers, new products that require specific labor skills, and changes to compensation or other policies. Human resource directors often work in tandem with other executives to make these changes in the company. While some changes are necessary to meet external requirements, others are simply internal to maintain a competitive advantage. Constantly changing factors can make this a tedious process.
Skilled employees are those individuals who have specific traits that make them more valuable. A few common examples here include accountants, engineers, and lawyers, among many other types of skilled employees. These factors can often be very difficult to overcome, especially those in low-skill environments. Skilled employees typically cost more in compensation and may be under greater demand by many companies. Companies must determine the number of skilled employees necessary and the budget available for retaining them.
Demographics and multiculturalism also play a role here. Older workers may cost more than younger workers, changing the demographic needs of a company. Multiculturalism may be necessary in environments with several different ethnic groups. These can all drive a company’s human resource management.