How do you analyze external factors affecting HR policies with PESTLE?

2 Economic Factors

Economic factors refer to the macroeconomic and microeconomic conditions that affect the availability and cost of resources, the consumer behavior, and the market trends. For example, you need to consider how the inflation, the interest rates, the exchange rates, the unemployment, and the GDP affect your clients' HR policies. You also need to monitor the changes and opportunities that may emerge from the business cycle, the industry growth, the innovation, and the globalization. Economic factors can affect the HR strategies, such as talent acquisition, retention, development, and reward.

3 Social Factors

Social factors refer to the demographic and cultural characteristics that affect the values, attitudes, and behaviors of the workforce and the society. For example, you need to consider how the age, gender, ethnicity, education, and income affect your clients' HR policies. You also need to adapt to the changes and challenges that may result from the diversity, the inclusion, the mobility, and the social media. Social factors can influence the HR practices, such as employee engagement, communication, collaboration, and well-being.

5 Legal Factors

Legal factors refer to the laws and regulations that affect the rights and obligations of the employer and the employee. For example, you need to consider how the employment law, the health and safety law, the data protection law, and the intellectual property law affect your clients' HR policies. You also need to comply with the changes and requirements that may arise from the litigation, the arbitration, or the enforcement. Legal factors can protect the HR interests, such as risk management, compliance, ethics, and governance.

6 Environmental Factors

Environmental factors refer to the natural and ecological aspects that affect the sustainability and responsibility of the organization and the industry. For example, you need to consider how the climate change, the pollution, the resource depletion, and the biodiversity affect your clients' HR policies. You also need to contribute to the changes and initiatives that may stem from the green economy, the circular economy, or the social economy. Environmental factors can shape the HR values, such as corporate social responsibility, environmental management, and stakeholder engagement.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?