Economic

The overall demand for goods and services fluctuates, resulting in changing demand for human labour (jobs, employment). 

In good economic times (growth), more jobs are created; in poor economic conditions (recession), jobs are lost. 

This influences what HR does within a firm.

How this impacts HR:

• Structural changes in economy (more services, less manufacturing; aging population, more jobs in that sector);

• Globalisation; exposure to global firms through removal of tariffs and increase in competition through entry of global subsidiaries;

• Economics (collective business conditions) impacts internal processes; overall business confidence impacts hiring/firing/training decisions.