Influence of Economic and Financial Crisis on HRM in Organizations - Essay Answer

Introduction

Economic and social forces shape the delivery of HRM (human resources management) in organizations. With the business setting becoming a vital foundation for any company, the HR (human resource) function possesses its own internal and external environment that makes associated issues extremely difficult (Hook and Jenkins 2019). The external environment of HRM might entail variations in the global economy, alterations in technologies, changes in the national economy, culture, industry attributes, regulations, competitive environment, and more (Cooke et al. 2020). This essay discusses the economic and social forces which shape the delivery of HRM in companies, using the PESTLE analysis tool to examine issues implied by the above topic. It will further discuss how the PESTLE factors impact the HRM functions and relate the essay to two businesses, namely Body Shop and Verdant Leisure.

PESTLE Analysis and Its Impact on HRM

Political Factors

Political factors originate from governmental policies and the degree to which they impact a company (Buye 2021). In HRM, political factors influencing processes include changes to taxation regulations, employment legislation, minimum wage, and new regulations to which a company must adhere (Tumaku and Ren 2020). The Verdant Leisure Company functions only in the United Kingdom and adheres to all employment legislation, including any committed nationwide particulars. The minimum wage factor has enabled the Body Shop Company to implement corporate changes like strict human resource activities, enhanced performance norms at the workplace, and superior managerial activities (Cohen 2017).

Economic Factors

Economic factors are associated with broader national and global economic situations (Wajid and Zafar 2021). In HRM, factors that can impact include changes in the national economy affecting employment, salaries, compensation, hiring, and so on. Inflation can burden human resource leaders, leading to labor shortages (Farley et al. 2020). Companies face enhanced burdens to simplify the cost of living for workforces via higher pay rewards. VAT taxation can also lead to job losses or unemployment in the market. The gender pay gap impacts HRM functions (Hecklau et al. 2016). Verdant Leisure Company has addressed this gap by offering flexible work prospects to both men and women, fostering and developing existing talent, and promoting from within. The company constantly monitors wages, salaries, and progression, trains line managers in non-discriminatory hiring and promotion activities, and inspires women workforce into managerial and senior roles.

Social Factors

Social factors consider the outlooks, emerging viewpoints, and desires of the business’s individuals. In HRM, social factors affecting operations include a surge in the aging population, culture of individuals, work-life balance, social media, and more (Çitilci and Akbalık 2020). The Body Shop Company supports the mental and physical health of its women employees by introducing a menstruation leave policy. For work culture, the Body Shop emphasizes human leadership, creating a workplace setting where leaders are sympathetic, reliable, and adaptive. Verdant Leisure refines functionality and improves content on its brand website to keep up with social media trends. The Body Shop leverages social media, using Instagram and Facebook to promote marketing campaigns, talk about new product launches, and engage with clients. The Body Shop also offers flexible working hours to its women workforce to preserve work-life balance after motherhood, prioritizing worker happiness and a worker-first strategy (Sharma 2023).

Technological Factors

Technological factors include advancements that always impact the company. New automated systems and machines can refine a company's performance but may also contribute to downsizing workers to save money and increase profitability. With evolving technology, companies can simplify daily activities and corporate procedures, freeing up workforce time (Banfield et al. 2018). Digitalized data, analytics, and work automation have changed how companies gauge, report, and understand workforce performance. Body Shop has centralized its recruitment procedures on a digital platform, reducing fulfillment time and simplifying talent acquisition. The company also uses a cloud-based virtual channel for performance management and has shifted training practices to e-learning. Both brands use automated HR practices and systems to collect workforce feedback and trace engagement levels in real-time, identifying improvement areas and reducing turnover. The Body Shop uses LMS (learning management system) to offer a broad set of training sessions and courses, equipping their workforce with the latest within the beauty sector. Both brands have designed applications and recruitment techniques to simplify hiring (Solomon 2019).

Legal Factors

Legal regulations and rules must be adhered to by every company. Addressing threats associated with health and safety is a vital part of managing human resources. All HRM policies must comply with legal necessities (Bennett et al. 2020). Work health, equal opportunities, and industrial relations are mainly impacted by legislation (Mousa and Othman 2020). Verdant Leisure ensures that all potential workforces are legally entitled to work in the nation and protects workers from any sort of abuse. The company has policies on whistleblowing, bullying and harassment, anti-money laundering, and more. It is an equal opportunities business and a member of the Disability Confident scheme, following EEO legislation to nurture fair and inclusive work environments. Through its whistleblowing policy, workforces are encouraged to report any critical issues without fear of reprisal (Verdant Leisure 2023). The Body Shop used to issue newer workforces with red envelopes to write their issues, put them in the envelope, and place them in the internal post (Heffernam 2013).

Environmental Factors

Environmental factors deal with a business’s ecological influence. CSR (corporate social responsibility) and sustainability have become top priorities for organizations. HR professionals must ensure that the business is not harming the environment (Brewster et al. 2016). The Body Shop’s sustainability goals are embedded in its mission statement, dedicated to social and ecological changes. Verdant Leisure promotes sustainable tourism and protects its natural environment. HR departments in these companies inspire workforce, clients, and holiday homeowners to reduce, reuse, and recycle. The Body Shop includes green training and development in its induction program, educating new hires on the company’s sustainable policies and activities. The induction program entails a green orientation session, informing workers about initiatives like reducing GHG emissions. The Body Shop is a proactive member of the IPHR (Indirect Procurement Human Rights) Waste and Recycling Worker Group, addressing waste and recycling as part of sustainability (The Body Shop 2022).

Conclusion

The essay examined the environmental factors impacting HR activities and practices of companies, focusing on the Body Shop and Verdant Leisure Company. It can be concluded that HRM entails a macro viewpoint to HR problems, emphasizing long-run strategies and assessing the corporate environment. The strategy of HR must align with the corporate approach to be effective. External environment factors were analyzed using the PESTLE framework, involving political, economic, social, technological, environmental, and legal factors. The HR management of the chosen companies takes numerous environmental factors into account. The complex business environment must be considered successfully. Social factors relate to consumers’ lifestyle, patterns, and trends in buying products or services. The Body Shop uses social media channels like Facebook and Instagram to meet client needs, promoting new product launches and engaging with customers.

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