It is important for HRM professionals to continue to recognize that because political, economic, social and technological conditions are constantly shifting around the world, how employees are managed in those changing environments will need to shift as well. HRM professionals can better understand the global environment by regularly conducting a political, economic, sociocultural, and technological (PEST) analysis which can act as an audit of a company’s environmental influences to assist in determining the corporate strategy and accompanying HRM response(s)

By conducting a PEST analysis HRM professionals and other organizational leaders are able to scan different contextual environments to understand the long- term trends and how they might impact a company. A PEST analysis can help HRM professionals to 1) spot business or human resource opportunities, and give them advanced warning of threats, 2) identify trends in the business environment so they can proactively adapt to these changes, 3) help to avoid implementing HRM practices in a particular country where they may fail, and 4) put an end to old habits and assumptions about how people should be managed to help bring about innovative ideas for the entire organization.

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