As HR professionals we should know our organisation's business. If we do not, then we are most likely designing HR strategies for "HR's sake" and not adding any real value. HR processes and strategies should be designed to help the overall organisational goals and to give a competitive advantage. The only way to do this is to get to know the organisation - inside and out. So how do we do this?
- Read your organisation's strategic plan and other strategic documents. If it doesn't have one, ask why not. Suggest that HR be part of the planning process
- If you do not have strong financial skills build a relationship with the finance people and have them explain the financial side of the business to you. You could also use this relationship to enable you to have some costings done on recruitment, attrition, absenteeism, OH&S, etc.
- Build your knowledge on the internal and external environmental factors so you are able to detect potential opportunities or problems
- Talk to managers, employees, customers, investors and anyone you think might have something to contribute
A model I use when conducting an environmental analysis is from Human Resource Management: Transforming Theory into Innovative Practice [1]:
When analysing the internal environment you should consider the:
- ownership of the organisation, i.e. is it public, private or something else?
- organisation's size
- organisation's strategy (theres that strategy word again!)
- oganisation's structure (bureaucratic, centralised etc)
- organisational culture (not only what the organisation espouses its culture to be, but also the unwritten culture
- organisational history
- resources available
When analysing the external environment you should consider the:
- environmental factors
- technological factors
- economic factors
- labour market
- international factors
- industrial relations
- political factors
- legal factors
- social factors (i.e corporate social responsibility)
- demographic factors
- industry trends
- cultural factors
For the external environment you could use the information provided by the Australian Bureau of Statistics. The Department of Defence has released the Defence Personnel Environment Scan 2025 which has a whole chapter on Australia and the global context, see part 3. The Committee for Economic Development of Australia (CEDA) would also be a good resource.
So what are you waiting for, go out and learn your business!
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- Hartel, C., Fujimoto, Y., Strybosch, V., Fitzpatrick, K. (2007) Human Resource Management: Transforming Theory into Innovative Practice, Pearson Education Australia, NSW.
