From Silicon Valley to Capitol Hill: 4 External Factors that Affect HR

The world of Human Resources is in a constant state of flux: new company policies, new employees, new recruiting tactics, new organizational goals–the list goes on. Sometimes the changes that affect HR come from the outside. These external influences can upset established practices and require quick changes to allow the organization to continue operating smoothly. Companies should be prepared with strategies to deal with external factors that can affect their human resource operations.

Here are four external factors that routinely affect HR operations to be on the lookout for:

  1. Technology. Changes in the tech world tend to impact HR substantially. Jobseekers and the workforce operate differently as new technologies emerge. The focus moves toward efficiency and cost-savings, both in recruiting and management. From applicant-tracking software to online pre-employment skills assessments, digital technologies drive the way companies recruit. Technological advances in the workplace are also changing the type of skills needed by today’s candidates.
  1. Government. New government regulations and directives can pose changes to HR. Every company must adhere to all government compliance standards, whether state or federal. This means every regulation that changes, even in a small way, has an impact on human resource operations. HR departments often make changes to their own internal policies to comply, especially since violating these government regulations can result in extensive fines that could even shutdown a company.
  1. Economy. The economy is one of the most influential external factors in the world of HR. It affects the number of candidates applying to jobs, which can impact the quality of applicants and even a recruiter’s ability to fill a position. When the economy declines, HR departments are among the first to feel the effects. As a result, companies should always have a back-up plan to prepare for an economic downturn. When the tide changes, they’ll be ready to weather the storm.
  1. Demographics. Generational changes in the workforce are another outside factor that HR departments must consider. As older employees retire, companies have to find younger candidates to replace them. This means developing recruiting strategies that specifically target and attract young talent. It also means offering a work-life balance, compensation, and benefits that the younger generation of workers want to see in a job.

Today’s HR professionals are responsible for much more than hiring and firing employees or explaining benefits packages. They have to keep up with hiring trends, follow government regulatory measures, and track the needs of potential employees. They must do so to stay ahead of the curve, avoid lawsuits and penalties, and continue hiring the best candidates possible. These external influencers that affect HR can seem beyond our control, but with sensible planning, they can and should be mitigated.

What other external factors should HR professionals look for?

Eric Friedman, Author

eSkill Author EricEric Friedman is the founder and CEO of eSkill Corporation, a leading provider of online skills testing for pre-employment assessment and benchmarking. Eric has degrees in Psychology and Business, and a fascination with matching people with roles they’re best at, and that they enjoy.

A company built on exceptional talent from Internet technology, test development, and iterative product development, eSkill leads as an independent assessment company helping HR departments with relevant and accurate job-based tests.

To learn more about Eric and eSkill, visit the company website at, or contact him on LinkedIn.

About the Author: Jocelyn Pick