Use the PEST Analysis to Interpret PHR/SPHR Exam Objectives - dummies

Use the PEST Analysis to Interpret PHR/SPHR Exam Objectives

By Sandra M. Reed

You can use the PEST analysis — the political, economic, social, and technological changes — to interpret a muddy PHR/SPHR exam objective as part of your studying efforts. Suggestions include HR needs such as substance abuse, union organizing, and hiring veterans.

The role of HR has continued to evolve alongside the needs of the employers that they support. The stereotype of a party planners has been replaced with a vision of business partners, participating in strategic planning and supporting the core competencies. You can easily view the role of an HR professional through the lens of a PEST analysis:

  • Political: The most obvious way that the political climate impacts how the role of an HR professional has changed is the abundance of labor law. Changes to healthcare and immigration reform are highly visible examples of why you must stay up-to-date every year. These exams test you not only on labor law, but also on the role of HR in lobbying efforts to affect change.

  • Economic: Like many other industries, HR hunkers down to weather out tough economies. HR is different from other jobs however in that HR professionals also help organizations create solutions when things get tight. Recent examples include managing work furloughs, controlling benefits costs, and retaining key people. Demonstrating the value of HR through leadership and excellence will likely pop up on the exams.

  • Social: Several social indicators are likely to be on the exams that have impacted how the HR role has evolved. They include the need for employees to find balance in their work and family lives, the management of a multigenerational workforce, and the global landscape from which many companies now compete.

  • Technological: The need for cell phone policies and the popularity of learning management systems (LMS) are just two examples of the broad impact technology has had on how HR does business. Other examples include the use of technology for employee self-service, virtual interviewing, and the need to manage and protect employee and customer confidential information.

The term business partner (BP) is a good way to understand what companies need from their HR people. A good BP understands the business, not just his job. A BP comprehends the finances, seeking ways to respond to threats while maintaining a competitive advantage in the competitive market. Because HR doesn’t generate direct revenue, the department must find other ways to demonstrate value by continuing to evolve right alongside the business that are supported.

Social media is an exam-relevant example of how a PEST analysis can help you go deeper into content. For example,

  • The political climate is being shaken up by the National Labor Relations Board, claiming that employees’ right to post complaints online about their working conditions or pay is a protected activity.

  • The economic climate has driven an increase in the use of social media to find both jobs and workers.

  • Socially, the employer brand is often communicated via social media websites through videos and employee testimonials.

  • Although technology has improved efficiencies, many of today’s workers report surfing personal social media sites while on the job, which certainly has an impact on productivity.