HR and PESTEL Analysis

PESTEL
By auditing the external environment, a PESTLE analysis can detect and
understand broad, long-term trends. This can support a range of business planning
situations, such as:
Strategic business planning
A PESTLE analysis provides contextual information about the business direction,
its brand positioning, growth targets, and risks (such as another pandemic) to
productivity. It can help determine the validity of existing products and services
and define new product development.
Workforce planning
A PESTLE analysis can help to identify disruptive changes to business models that
may profoundly affect the future employment landscape. It can identify skills gaps,
new job roles, job reductions or displacements.
Marketing planning
A PESTLE analysis provides the ‘climate’ element in the situation analysis phase of
the marketing planning process. It can help prioritise business activities to
accomplish specific marketing objectives within a set timeframe.
PESTEL
Product development
By monitoring external activity, a PESTLE analysis can help inform whether to
enter or leave a route to market, determine if a product or service still fulfils a need
in the marketplace, or when to launch a new product.
Organisational change
A PESTLE analysis helps understand the context for change, and is most effective
when used in association with a SWOT analysis to understand opportunities and
threats around labour changes, such as skills shortages or current workforce
capabilities.
People strategies, reports and projects
A PESTLE analysis can be used as a framework to look outside the organisation to
hypothesise what may happen in future and what should be further explored. It
can ensure that some basic factors are not overlooked or ignored when aligning
people strategies to the broader organisation strategy.
 External factors to consider
POLITICAL Government policy Political
stability Tax Industry
regulations Global trade
agreements and or
restrictions
Factors affected within my industry Importance to
organisation
The decision by the UK to leave the Medium
EU has left the pound weaker and
an uncertainty with future trade
restrictions in Europe. Profit
margins are bound to be affected by
this move.
Many stores are in City centre
locations; past and potential High
terrorism threats have affected
tourism and footfall in shopping
malls.
Government imposed lockdowns Medium – ongoing
restricting in-person shopping. monitoring as regular
lockdown threats loom
Consumer protection rights.
Low
 External factors to Factors affected within my industry Importance to
consider organisation

ECONOMIC Exchange rates Exchange rate conversions remain Medium

Globalisation Economic volatile, affecting negotiations with
growth/ decline Inflation suppliers.
Interest rates Cost of
living Labour costs Uncertainty continues in the UK Medium
Consumer spending business markets and investors due to
habits the UK leaving the EU.

COVID-19 pandemic has added to poor Medium – whilst footfall

market performance and greater has risen numbers are still
dependence of online shopping. down compared to
previous years – keep
monitoring.

Consumer spending habit changes put High – concerns for the

pressure on certain goods whilst others future of some local stores
are in decline. and staff employment.
 External factors to Factors affected within my industry Importance to
consider organisation

SOCIAL Consumer trends/ tastes, Cultural diversity and preferences by Medium, ongoing
Fashions Consumer region or country.
buying habits Lifestyle
factors Career attitudes Our clothing range does not cater to all High; more research
Work-life balance ages and sizes of people. The required
Population demographic with the most disposable
demographics income sits within the 40–65-year-olds.

Investment is required in market High; more research

research to determine a move towards a required
more inclusive approach.

In some regions local demographic High; stores are not

labour markets do not want to work in sustainable if
retail for minimum/living wage understaffed.
 External factors to Factors affected within my industry Importance to
consider organisation

TECHNOLOGY Automation Is our technology fit for purpose now High; trend for customers
Innovation and for the future? How appealing is to compare online before
Disruptive our online presence? they buy in person.
technologies Social
networking Upgrades Website ease of use for customers. Medium; longer-term
Robotics Artificial Consider smartphone apps for ordering strategy; more research
Intelligence Security goods. needed.

Data storage confidentiality and Low; compliance with

consumer rights. GDPR regulations in place
since May 2018.
Need to improve technology for High; explore internal
analytics and buying intelligence. capability.

Need greater employee expertise in High – consider roles

online design, marketing and analysis.
Rise in cybercrime risk to data
protection and operational stability. E.g.
Cyber attack on NHS through
‘Ransomware’.
needed to improve online
shop, presence and sales.
High; this could render
our software inoperable.
 External factors to Factors affected within my industry Importance to
consider organisation

LEGAL Employment law Wage rates and National Minimum Medium

Common law Local Wage increases yearly.
labour law Health
and safety regulations Concerns over family-friendly Medium
implications as most of these were
brought in by the EU.
High
Peak trading periods require contractual
flexibility.
Medium.
Gig economy and Taylor review –
implications of employment status.
High
Compliance with the Modern Slavery
Act particularly important for retail.

Introduction of workplace pensions Low; policy now in place.

 External factors to Factors affected within my industry Importance to
consider organisation

ENVIRONMENTAL Environmental The rise in ethically and Medium

restrictions imposed by environmentally conscious
in-country governments shoppers.
Sustainable resources Medium, but keep an
CSR (Corporate social Ethical sourcing has pushed the eye on customer
responsibility) Ethical price up of our goods however, loyalty
sourcing Transportation
Procurement Supply Customer relationships have
chain management improved since we introduced and High – more research
Future pandemics publicised our ethical sourcing required.
policy and CSR intentions. But two
of our competitors still out-rank us
in producing environmentally
friendly products.
Medium – continue to
Supply-chain disruptions as PPE monitor.
garments are the main focus.