Few trends exist in isolation.It is difficult to correlate a particular issue such as a labour shortage in a particular area with one particular causal factor.
Identify and describe two of the six environmental factors affecting HRM.

1. Economic climate – Several economic factors, such as unemployment rates, the value of the Canadian dollar, and interest rates, may have an impact on HRM. Two economic trends discussed in your textbook are globalization and the knowledge economy.
2. Globalization – This is the growth in flows of trade and financial capital across borders. Globalization affects sovereignty, prosperity, jobs, wages, and social legislation. The shift in the global economy has been marked by the rapid growth of emerging economies such as India and China. These countries had workers who were willing to work longer hours for less money than workers in more developed countries.
3. Political and legislative factors – Governments, both provincial and federal, can influence the business environment through political programs that result in changes to laws and regulations. Examples of these are the changes to mandatory retirement in Ontario and tax cuts for job creation.