Unit 5 – Certificate of Human Resource Practice

1.1 - Describe the internal and external factors that impact on the employment relationship
There are many factors that can impact on the employment relationship, both internal and external.

External Factors
- The availability of alternative jobs is a external factor of the labour market and can impact the employment relationship due to staff being head hunted by other companies, they know that they can easily find a new job should they not be enjoying their current job role.
- The general economic climate is another external factor however it relates to the product market. This can affect the employment relationship as there will be a drop in demand of products should the economic climate be low resulting in less work, meaning redundancies may be made when there is less money coming in and organisations can no longer afford to keep all of their staff. However should there be a rise in demand of products due to the economic climate being strong then this will result in more work.
- A positive external factor is social impact. Where by the retirement age is increasing each year, organisations area able to retain a older workforce resulting in a higher retention of specialised knowledge and skills.

Internal Factors
- The size of the organisation will impact on the employment relationship as the larger the organisation the greater room there is for career progression, however the smaller the organisation there will be a lack of career progression.
- Work life balance is another internal factor which can impact on the employment relationship. If an employee can get a good work life balance they will be happier and will want to stay with the organisation longer.
- By carrying out appraisals and using a performance management process organisations are able to motivate staff to reach their individual