Concept Of Globalization In Global Business Essay


Discuss about the Effect of External Environment Factors on Human Resource Planning Strategies.



Human resource management is a concept that allows business organisations to manage their workforce in the best possible manner. Human resource management offers concepts, such as performance management, training and development, career development, etc., which the managers can use to establish better relations between employers and employees and ultimately achieve an increase in the productivity and efficiency of the workforce (Hendry, 2012).

Human resource planning

Human resource planning, also known as HRP, is another important part of human resource management. Human resource planning is a concept that allows business organisations to forecast their human resource demands using statistical data and identifying options or methods that can be used to fulfil the identified demand (Bhattacharyya, 2009). There are a number of factors that are considered while planning the human resources of a company and are generally divided into two main categories i.e. internal factors and external factors. The factors considered under the internal factory category are organisational structure, budget, skill level or competencies required, productivity, etc. (Enotes, 2015). On the other hand, the external factors that can have a huge impact on the human resource planning of a company are government regulations, legal compliances, economic conditions, technological advancements, workforce demographics, etc. (Friedman, 2013). In the rapidly changing business and market scenario, it is of utmost importance that the managers continuously focus on human resource planning as shortage of labour or surplus labour can make a company inefficient or less competitive in the market.

Market scenario in Australia

Australia, officially known as the Commonwealth of Australia, is one of the top countries that attracts fresh human resources from most of the developing countries. The country enjoys a wealthy status and generates a lot of income from mining exports, telecommunications, banking and manufacturing, which offers a lot of job opportunities to the Australians and to those who are moving in Australia from different parts of the world. The country has a low rate of poverty, which improves its economic status throughout the world and is also the fifth largest economy in the world. As of May 2012, a total of 11,537,900 people were working as employees in the country while the unemployment rate was 5.1% (Australian Bureau of Statistics , 2012). Due to high movement of people in and out of Australia, the business organisations that are operating in Australia are facing a lot of changes in the internal and external business environment factors, which forces them to adopt new human resource management strategies that would enable them to become more productive and efficient.

Effect of external environment factors on human resource planning strategies

After the spread of globalisation, the global market has undergone a drastic change. The competition between rival firms has reached a scale where they are competing with each other at the global level and are even unaware about the actual number of competitors in the market. The barriers to new market entrants have become lesser and the internal and external business environment factors are changing at such a pace that it has nearly become impossible for business organisations to resist workplace changes for long. In such conditions, as a result of globalisation, there has also been a huge impact on the human resource demand and supply conditions. In the present day world, due to the expansion of businesses at a global scale, human resources from one country are moving to other countries in search of work while even the companies are relocating their human resources from country to another for the purpose of business expansion on foreign lands. Due to the large and continuous movement of human resources from one place to another, it has nearly become impossible for the business organisations to believe that the jobs will remain unchanged for longer periods and that the concept of human resource planning should now only focus upon internal replacement charts and succession planning. Rather, the concept of human resource planning should now lay a greater focus on scenario planning, which can help business organisations in taking into account the changing environment factors while planning their human resources

Australia is a country that experiences high rate of immigrants from different parts of the world every year. In 2015 alone, there were around 10,218 people who had immigrated to Australia (The University of Adelaide). As a result, the demographics of Australia is rapidly changing and is having an impact on the external environment of business organisations. In a research carried out by Hudson, in Australia, the generation Z of Australia has started entering the workforce and will revolutionaries the way in which the things are done. The generation Z is most likely going to transform the Australian business world by digitalising most of the operations and processes as they have powerful digital capabilities and have strong entrepreneurial drive (Hudson). On the other hand, 1/3rd of the employees working in Australia are the ones who fall in the generation Y category and most of them have started stepping into the managerial positions. As a result, the demographics of employees working in Australia is rapidly changing because of changing population trends and high rate of oversea immigrants moving to Australia. They fresh talent in the Australian business world is bringing in new and innovative ideas, which will ultimately change the working style in the market and will force the business organisations to undergo changes in order to remain competitive (Jorgenson, 2004). As a result, the changing demographics is bringing about some major changes in the Australian business environment and the overall market, which is forcing the companies to review their human resource planning strategies and implement new policies that would allow them to achieve greater advantages through their human resources.

Technological innovations are also playing a huge role in the changing market trends. Technology is continuously evolving and is changing at such a rapid pace that new machines can be introduced in the market within no time and can eliminate the need of human efforts altogether. The concept of globalisation has brought the entire world so close that a technological innovation introduced in one part of the world can be brought by a company in another corner of the world on the very same day. Such technological changes and innovations can have an impact on the human resource requirements of a company and the demand and supply of human resources can vary according to it because new machinery can eliminate the requirement of human resources in a company while it can also require more human resource to operate it. Thus, technological innovations can bring about some major changes in human resource planning strategies and plans.

Another change in the global business world is related with the flexible work arrangements that most of the employees are now demanding and most of the employers have started offering. Most companies in the world are enjoying the benefits of technology and are now making a shift to business setups where most of the work can be done by the employees from their home itself (Jury, 2016). As a result, the companies are able to cut down on their operational costs because they do not have to invest in contracting huge buildings and office spaces. On the other hand, allowing their employees to work from home can also enable them to save a lot of finances that are otherwise spent to provide welfare activities and on the job benefits to the employees. This very concept of work from home and other flexible working arrangement concepts are changing the human resource demand and supply patterns, which the Australian business organisations are facing as well. To cope up with the changing market trends, the companies operating in Australia are also being forced to make a shift to flexible work arrangements, which is altering the job specifications and descriptions, ultimately leading to some major changes in human resource demand and supply patterns (Kramar, 2012).

Lastly, another important factor, which has been a direct result of globalisation, is brain drain. Due to globalisation, it has become easier for the human resources to move from one country to another in search of employment (Andrew, 2016). A lot of immigrants are moving from developing countries like India and China to developed countries like USA and Australia. The process of brilliant minds of a country migrating to other parts of the world is thus known as brain drain. Movement of a lot of people into Australia has increased the level of workforce diversity. Such a diverse workforce obviously has different set of skills, problem solving capabilities, technical knowledge, personalities, hard work capabilities, etc. and this diversity can be of a lot of benefits to business organisations. To remain competitive, business organisations operating in Australia have to hire diverse workforce so that they can put their diverse talents to a good use and can give a tough fight to their market competitors. As a result, the changing demographics of the country and the movement of people from and to Australia, is bringing about drastic changes in the country’s external business environment, which is ultimately having an impact on the human resource planning strategies of Australian business organisations.

The concept of globalisation has brought drastic changes in the global business world. The business world has become highly competitive and its size has reduced in a great way. It has become easier for business organisations to expand globally and establish contacts with other companies. On the other hand, the number of rivals in different industries has also increased. Further, the human resource management and planning strategies are also being affected as a result of increased globalisation. Due to globalisation, the markets are undergoing major changes within no time and the internal and external environment factors, which they are vulnerable to, are also changing in real time. Such changes can have huge impacts on human resource planning strategies of business organisations, especially for those that are operating in countries like Australia. The changing demographics, technologies, social preferences, etc. can have a huge impact on the human resource demand and supply patters. As a result, it is important for business organisations to start focusing more upon the external market scenario or the global environment factors for designing their human resource planning strategies as they can no longer rely upon internal factors for forecasting the human resource demand that they are most likely going to experience in the coming times.


Australian Bureau of Statistics . (2012, May 10). Australia's unemployment rate decreased 0.2 percentage points to 4.9 per cent in April 2012. Labour Force, Australia.

Hudson. (n.d.). 7 Talent Trends That Will Transform The Workplace. Retrieved August 17, 2017, from

The University of Adelaide. (n.d.). Labour & Demography . Retrieved August 17, 2017, from The South Australian Centre for Economic Studies:

Jury, F. (2016, December 15). The Top 5 HR Trends in Australia for 2017 . Retrieved August 17, 2017, from

Kramar, R. (2012, April). Trends in Australian human resource management: what next? . Asia Pacific Journal of Human Resources, 50(2).

Andrew, R. A. (2016, May 18). 14 Current Trends in Human Resource Management . Retrieved August 17, 2017, from

Hendry, C. (2012). Human Resource Management . Routledge.

Bhattacharyya, D. K. (2009). Human Resource Planning. Excel Books India.

Enotes. (2015, August 18). What are the internal factors and external factors involved in the human resource planning process? . Retrieved August 17, 2017, from

Friedman, E. (2013, July 18). 4 External Factors that Affect Human Resource Management . Retrieved August 17, 2017, from

Jorgenson, B. (2004). The ageing population: implications for the Australian workforce .

How to cite this essay: