Environmental Scanning
Environmental scanning is a systematic process that surveys and interprets external factors to identify opportunities and threats. An organization collects information about the external world such as competitors, suppliers, markets, and government policies. The organization then responds to the information by changing the strategies and plans. These strategies are meant to strengthen the objectives of the company for future development. Predicted changes in the external environment cause the organization to engage in strategic HRD planning. The organization has to change the internal structure to counter the external forces caused by risks in the environment. The organization collects data about matters that affect human resource supply, demand, knowledge, and skills. These are then incorporated in the planning process to understand the external forces that affect the current workforce needs and future strategies. The future success of an organization depends on the abilities of the human resources, which necessitates strategic plan for the workforce (Rothwell and Kazanas, 2003).
The economic sector experiences a series of fluctuations resulting from booms and slumps in economic activities. An economic boom causes benefits, and a slump causes loss to an organization. Changes in interest rates, wage rates, and inflation are parts of the economic sector that affect HRD (Powell, 2003). There is a rising demand for business activities from the banking sector. The current economic trends will encourage the development of small and medium organizations that require banking services. The economic sector is likely to expand in the next 5 years, which presents an opportunity for the organization. Skilled manpower is required to propel the organization during the coming economic development stages. HRD must match the economic development in order to maximize the services available to business and maximize the opportunities in the business environment. Maximum economic growth in an organization is highly dependent on the human resources and organizations should pay more on HRD.
The political sector determines the government influence in the business activities undertaken by the organization. The political climate can affect business activities, which in turn affect business departments such as HRM (Daly, 2011). The government has increased taxes on businesses in the banking sector. This trend is likely to continue in the next 10 years as the government tries to raise more finances for economic development. This represents a risk for the organization since department budgets may have to be trimmed in order to reduce the business costs. The organization is forced to reduce the number of recruitments conducted due to reduced budgets for the HR department. The organization has to maintain the business needs in terms of the available turnover, which requires small increments in the human resource. The HRM can conduct training sessions for the current workforce in order to meet and sustain business growth over the next 5-7 years.
The technological sector has experienced tremendous changes in the post-millennium world, which are expected to continue in the next 5 years. This has occurred particularly in the communication technologies (Sims, 2007). Technological advancement has increased access to information and streamlined the management of information through the invention of database systems. The organization has to exploit the opportunities introduced by the vast changes in the technological sector. The human resource department can conduct video conferences and remote training activities for their staff (Singh, 2008). The introduction of mobile banking and telecommuting has provided a new business venture for the organization. HRD can optimize the opportunities presented by the banking technologies by training staff to ensure the availability of remote banking services and operations involved in mobile banking. The invention of ATMs and other banking systems has increased the business activities, and these are likely to improve in the near future.
The social sector has experienced new employment areas, changing population characteristics, improved working conditions, and changes in educational systems. The current population is composed of young people who have graduate or professional education. The organization can exploit this opportunity to strengthen the workforce (Griffin, 2012). The workforce is becoming more diverse, and changes in HRD will determine the employee relations in the industry. Improved working conditions in the banking sector have attracted several graduates. This ensures a continuous supply of skilled employees for the organization. However, upcoming sectors such as telecommunication and insurance industries have better working conditions and wages compared to the banking sector. This causes loss of revenue involved with employee training when the workers leave the organization for other organizations. This trend is likely to continue in the next few years, and the HRD can introduce working terms and conditions that ensure workers remain in the organization for a long period.
Business activities and HRD are influenced by both internal and external factors. Changes in the economic sector, social sector, political sector, and technological sector present risks and opportunities to the organization. These risks and opportunities determine the future of HRD due to associated economic advantages or disadvantages. The organization has to restructure the HRD process to maximize on the opportunities and minimize the risks associated with the environmental factors. The HRM department has to focus on the whole organization and the environment when introducing changes dealing with the effects of the external environment.
References
Daly, J. L. (2011). Human resource management in the public sector: Policies and practices.
Armonk, NY: M.E. Sharpe.
Griffin, R. W. (2012). Fundamentals of management. Mason, OH: South-Western Cengage
Learning.
Powell, M. (2003). Economic restructuring and human resource development. Aldershot:
Ashgate.
Rothwell, W. J., and Kazanas, H. C. (2003). Planning and managing human resources: Strategic
planning for human resources management. Amherst, Mass: HRD Press.
Sims, R. R. (2007). Human resource management: Contemporary issues, challenges and
opportunities. Greenwich, Conn: Information Age Publ.
Singh, S. K. (2008). Human resource development: HRD--IR interface approach. India: Atlantic
Publishers & Distributors Ltd.
