Three businesspeople holding discussion in office

When running the people side of a business, it is easy to focus entirely on internal factors and the things that you can control.  However, it is also important for HR leaders to consider what external factors could affect your business and understand what you can do to protect your company and your people from these potential issues. Keep reading to discover the biggest external threats and what can be done to manage them.

 

Economic Factors

Economic factors can pose a very serious threat to businesses, and this is something that every business has been experiencing in recent years. Inflation, recession, and low consumer confidence can have a major impact on a business’s success – but also on the morale of the people working in it. There is nothing that can be done to control this situation, but HR leaders can manage the impact this has by ensuring that they have support available for employees who may be struggling.  HR can also use their influence on the board, suggesting that the business sources sustainable financing and an emergency fund that can be used to keep the business afloat during challenging periods.

 

Environmental Factors

Many businesses also have environmental factors that can impact their business. Weather and environmental conditions can prevent customers and staff from reaching the business or you could experience a loss of power – and employees in remote locations may want to work from home.

As well as a good flexible working policy, it is important for businesses to have a backup generator to provide power for equipment if there is a blackout. All businesses should assess the environmental hazards in their area and have a plan for managing these, covering the business, the premises and the people who work there.

 

Competitors

Businesses must also consider their competitors as they can have a big impact on your success but remain outside of your control. The best way to mitigate the damage done by a competitor is to keep a close eye on them, which should also help you to find ways to stand out and find success.  It is important that employees understand the importance of keeping company secrets and data secure.

 

Social

Public opinion can swing and change in a heartbeat, especially at a time when there are many social issues in the world. You want to keep the public, employees and your target market on side, which means that you need to encourage the board to run the business in the most ethical manner possible and pay close attention to the feedback that you receive as a business.  Pulse surveys are good for assessing impact on employees, but HR can also liaise with the marketing team about any market research, helping the business keep pace with the latest trends, attitudes and issues.

 

Technological

Tech plays a major role in business and there are constant developments being made. Businesses that do not keep pace with the latest tech will fall behind the competition, so HR can work with the CTO to make sure that your team can keep up with tech trends and find ways to use the best and latest tech.

 

These are a few of the main external factors that can impact your business. You always need to consider external factors and the pandemic has proven that the unexpected can happen. Although these external factors cannot be controlled, there are always steps that you can take to protect the business from these factors.