Effects Of The Growing Influence Of A Global Labour Market On The HRM

The Role of Labor Demand and Supply in HRM

Disccuss about the Effects of the Growing Influence of a Global Labour Market on the HRM.

A labor market is described as the place where employees and employers interact with each other. The employers mostly hire the best whereas; the workers compete for the best satisfying job in the labor market. Employers as well as job seekers are brought jointly for probable matches with the help of recruitment and job search activities that help both parties obtain information about each other. The decisive role of information in the labor market has been identified since the year 1962, however; despite a voluminous literature on job matching as well as organizational behavior in the labor markets, there are less known facts about recruitment strategies of the employers (Osterman 2014). One of the major reasons how labor market affects human resource planning is the traits of labor demand and supply. In an economy, a labor market operates with both demand and supply of labor. In the post-war period, the UK labor market has witnessed several changes due to changes in the economy. This in turn led to diminishing in manufacturing jobs as well as increase in the service sector.  

The essay provides a clear insight about the changes in the labor in both Apple Inc and Microsoft Corporation and the way by which these companies devise their recruitment, selection and reward policies due to the changes. Apple is an American conglomerate that is headquartered in California. Apple is considered as the second-largest mobile phone manufacturer of the world and is the first US based company that is valued over US$700 billion (Ledenyov and Ledenyov 2015). Microsoft is a multinational conglomerate situated in America that mostly develops, produces and licenses a broad range of commodities as well as services. These commodities and services are mostly associated to computing with the help of its several product divisions. The Company was established in the year 1975 in order to develop as well as sell BASIC interpreters. Later Microsoft that was followed by Microsoft Windows line of operating systems mostly dominated the home computer operating system (Chatterjee 2016).

Cross border merger and acquisition illustrates a deal between overseas companies as well as domestic firms in the target country. The trend of augmenting cross border M&A has increased speed with the globalization of the world economy. Cross-border mergers and acquisition are considered as a big segment of the corporate economical world. The best way to analyze M&A strategy of Apple, it is imperative to look at the acquisition activity of the company. Cross border merger & acquisitions are all changing the management of organizations across the globe. Moreover, several factors are there, which are influencing the increasing ratio of cross border merger & acquisitions. Increasing the efficiency of the Company to produce better services, using the changing technology to enhance the operation level, increasing the production level are some of the reasons that are influencing cross border merger & acquisitions (Cartwright and Cooper 2012). Irrespective of the organizations that are across the globe, most of them are involved in a continuous cross border merger & acquisition process.

Impact of the Global Labor Market on Apple and Microsoft Corporation

Being a multinational conglomerate, Apple Inc. is well recognized for its design as well as marketing of electronic goods. The most common hardware products that are manufactured by Apple include personal computers and consumer electronics that are mostly famous by the name iPods, iPads and iPhone. It is imperative for an individual to hold a university episode in order to qualify to work in the Apple Company. This requires to be accompanied with a high profile documentation due to increased competition (Jun and Sung Park 2013). However, a large pool of workers are drawn from the United Kingdom, since the Company is UK based, because of the presence of subsidiary companies all over the world in several overseas countries. At present, Apple holds more than 46,000 workers who work under full-time circumstances as well as 2800 employees who mostly work on the worldwide basis. At the end of the financial year 2009, Apple registered yearly sales of $42.91 billion and the Company gained augmented favor by customers in its commodities as well as in the electronics industry. Since its commencement, the Company has employed more than 75,000 employees across the world most of whom are located in the United Kingdom. Recruiters mostly play an imperative role to manage as well as affect the job choices that are made by the applicants. The economic downturn in the year 2008-2009 led to heavy reduction in productivity in the manufacturing sector of Apple Inc. The change in the labor market had a large impact on the recruitment, selection and reward policies of the Company. The change in the labor market led to fairly steady however; slow productivity growth that coincides with a sharp decrease in jobs (Hausman and Johnston 2014).

In the year 1997, a cross-border merger and acquisition was formed between Apple Inc. and NeXT Software. They declared that they would merge their technologies. However, Apple faced bottomless problems due to hardware sales that were destitute. Apple continued to face increasing monetary problems due to the merge that resulted in the investment of huge amount of dollars. On the other hand, NeXT also faced several problems and it also did not have an easy era. The extension of OPENSTEP working system was almost stopped. The scale of cross-border mergers as well as acquisition had augmented rapidly in current years. The UK is more involved in this procedure as compared to any other EU countries (Chaston 2017). Apple has purchased more firms abroad as compared to any other nationality. In current years, the scale of mergers and acquisition at the global level has risen to unparalleled heights. It is quite common in the global marketplace of Apple Inc. It is considered as the method by which both technologies and commodities are acquired by Apple. However, it does not facilitate long-term adjustments for the Company.

Cross-Border Merger and Acquisition and Its Impact on Apple’s HRM Strategy

With the cross-border merge, the Company mostly faces usual instances of joblessness. In such cases, joblessness can lead to dismiss that might also lead shifting roles of the workers. As a result, laid-off employees are impacted by inequalities between skills that are supplied by employees. Although, lay-offs cannot be avoided, it is imperative to reduce uncertainty amongst workers. This in turn alters the way by which Apple follows recruitment and selection procedure as the Company provides separation package to those laid-off employees. The remaining workers in turn are provided with clear documentation on their role within the organization (Alimov 2015). The workers are also provided with an enhancement policy that helps to adjust to succeeding changes. The change in the labor market due to cross-border mergers also changes the procedures and practices as per which the major focus is given on training. In other words, all workers are made aware about the new procedures as well as policies that take place from the merger. This requires a training plan that includes making workers recognizable with everything all the way up to technology proposals. In this case, that has been provided by Apple includes one-on-one training seminars with a trainer (Luu 2016).

Due to change in the labor market, the culture of the Company is bound to be impacted that is likely to have an impact on the workers self-esteem negatively. This uncertainty is likely to lead good workers to seek employment with the competitors of Apple. However, the remaining employees are likely to take on an unenthusiastic attitude. As a result, it is imperative for the Company to communicate with the workers openly as much as possible and to provide clear mission and vision to them. It is imperative to map out the changes that are likely to take place in a clear way to keep them informed. At this point, Apple also requires to increase motivation as cross-border merger are likely to lead to difficulties (Oldford and Otchere 2016). It will also have to set aside time for workers if they desire to converse apprehension as well as issues with the new merger. This is mostly because; open conversation helps to prevent confusion about roles and responsibilities. The Company also requires recognizing and rewarding workers for their responsibilities as well as roles in managing change. However, rewards do not have to be in the form of bonuses but it can be small gifts that will act as recognition.      

Impact of Cross-Border Mergers on HRM Policies and Practices

In the year 2014, Apple had also formed cross-border merger and acquisition with two California based companies where they formed a $3 billion acquisition of Beats. This amount was 6 times as large as the second-highest price paid for NeXT Software. As a result, the HR department of Apple started hiring Beats workers who are involved in creativity and expansion roles. As a result, most of the employees who are not a part of Beats are laid-off. On the other hand, Apple has set up a phone hotline for Beats workers to connect with the HR department of Apple to discuss about the changeover policy as well as severance packages (Cartwright and Cooper 2014). Beats represents almost 40 percent of the overall expenditure on M&A over the last two decades. The flexibility of the labor marketed mostly imperative for the success of acquisition since acquiring firms often reorganize targets to minimize costs of labor as well as maximize synergies.

The huge amount of investment led to reduction of worker turnover. In other words, during this period Apple witnessed a significant turnover that led to excess costs in their operation. This was mostly due to the salaries paid to the individuals who were engaged in the recruitment as well as selection of new employees. As a result, Apple switched to maintenance of stable employee core by cost cutting. The labor market of the Company also changed over the past two decades as a training was provided to laid-off workers that did not affect the ability to deliver goods or services to the targeted customers. The labor market also changed as Apple had cut costs by altering their hours of operation. In other words, they opted for a four-day, 9-hour per day workweek from a standard five-day, seven-hour workday in return for a subordinate wage (Chakrabarti, Hsieh and Chang 2017). The M&A strategy of Apple had changed over the past few years, as the key difference is that the management has augmented M&A pace. Between the years 2013-2015, Apple had acquired several companies as compared to the previous 16 years. The total amount that had been spent by Apple on M&A accounts for more than 70 percent of the overall amount spent on M&A since the year 1997 (Clark and Mills 2013).

The Microsoft Corporation has a significant number of acquisitions under their belt. The acquisition of Cooper & Peters in the year 1997 is one of those examples that illustrate the acquisition policy of the Microsoft Corporation. Moreover, the Company believes in acquiring smaller and bigger companies to enhance its local presence and area of expertise (Microsoft IT Showcase, 2017).

Challenges and Recommendations for HRM in the Global Labor Market

Merger & acquisition processes are producing a resonant effect on the labor market across the globe. Nevertheless, the desire to expand the business operation is all compelling the organizations in going for the merger & the acquisitions process (Cooper and Finkelstein 2014). Cross border merger & acquisition are producing some effective changes on the organizations across the globe such as employment creation, technology enhancement, financial growth and many more (Morresi and Pezzi 2014). For an example, the acquisition of the Cooper & Peters Company by the Microsoft Corporation was to enhance the programming expertise of the Company. Nevertheless, cross border merger & acquisition do also bring different culture of people under one organization. This is where the problem arises concerning the supply and demand of labor market. A changed phase of labor market might give place to some management related faults in organizations (Reis, Ferreira and Santos 2013). Moreover, this is exactly what has happened with the Microsoft Corporation. The higher rate of attrition of tenured employees because of hard & strict rules of its management has all left the Company with no solid solution for this. Nevertheless, finding an appropriate replacement for some of the tenured employees of Microsoft that had left the organization is not an easy task. Further, it might take a significant amount of time to fill the gaps created by the exclusion of such tenured employees from the organization (Stroup 2012).

The Microsoft Corporation is seriously concerned about the attrition that has affected the management. The management is under a significant pressure, as they have no clues on how to fill the gaps. The performance centric nature of its management has probably compelled them for going rude over its employees to assure a hundred percent success rates (Vermeylen and Velde 2012). Nonetheless, the fresh graduates are also hesitating in opting Microsoft as their prime choice for the job because of the image of it as an incapable organization in handling its employees appropriately. Moreover, the fresh graduates are now inclining to those organizations, which are not as powerful as the Microsoft Corporation (Microsoft IT Showcase, 2017).

The strict leadership quality is their other problem, which indeed is because of their principles of working (Warter and Warter 2014). Moreover, the desire to become a global leader in the software & hardware industry has probably compelled them for going this way. Further, they have provided no place to any sort of performance related failure. For all such reasons, a huge attrition of tenured employees did take place in the organization. Nevertheless, the fresh graduates are also hesitating in choosing the Microsoft Corporation as their primary choice for the job. They rather looked for some lesser organization, which could provide a home like experience at the workplace. The not so friendly atmosphere of the Microsoft Corporation reduced a healthy drive of fresh graduates (Yesilyurt 2012).

The issue that took place in the Microsoft Corporation with the attrition of various tenured employees does require some quick remedial actions. Nevertheless, the Microsoft Company responded to the created urgency and started searching for some effective solutions that could better its relationships with employees. They came up with some effective solutions to fill the gaps created by the attrition of tenured employees such as to improve the communication in between the HR and the employees, to enhance the level of employee benefits and to improve the appraisal system.

The CEO Steve Ballmer took some necessary steps to improve the communication in between the HR and the employees to regain the faith of employees over the organization. Moreover, under this system, employees would now have all the liabilities to discuss its problems with the HR department. Nevertheless, the HR would listen to employees and would take required action for that. Indeed, this is a good move by the Microsoft Company, as this would help in restoring the lost faiths of employees and its aspirants (Microsoft IT Showcase, 2017).

Ballmer introduced some changes in its list of benefits given to employees such as health benefits, food availability, transportation and many more. These all benefits collectively can do wonder in favor of employees and can really change their mindset for quitting the job and joining the rival companies. However, all the introduced benefits need to be addressed properly to bring the desired outcome, which indeed would put some significant pressure on the management (Stroup 2012). Nevertheless, retaining the employees by introducing some extra benefits do require a significant management look out for this.

The introduction of commitment ring in place of the existing forced ranking system does represent another significant change brought by Ballmer. Determining the eligible employees for the incentives based on forced ranking system was a biased process (Yesilyurt 2012). However, in the commitment ring, all employees would get fair enough chances to get incentives. This could help in regaining the lost faith of employees on the organization by providing a fair performance evaluation process that never existed. The forced ranking system did also bring some criticism for the organization from the Black American employees who even filed lawsuits against Microsoft (Yesilyurt 2012).

A cross-border merger and acquisition has also been formed between Microsoft and Nokia, where Nokia is considered as a Finnish conglomerate communication as well as corporation that are engrossed in the manufacture of mobile devices. Microsoft has always resisted in the mobile space. The Company was early to the game with Windows CE as well as Windows Mobile. The success of iPhone was followed by the introduction of Windows Phone by Nokia that deserted much of the legacy (Yeung and Coe 2015). Microsoft in turn required hardware partners of OEM who were unwilling to take on the risk of an unverified software platform when they are already taking pleasure in success with Android. However, Nokia made some inspiring Windows Phones during its partnership with Microsoft however; it was not able to bring itself back to profitability. Most of the analysts had also questioned about the fact that Microsoft simply did not contract manufactured the phones. However, more than 20,000 jobs at Microsoft has been reduced with the completion of the restructure. In the year 2016, Microsoft had announced some remarkable acquisition that comprised Xamarin as well as Swiftkey in order to pursue its mobile-first. Microsoft is rapidly acquiring companies in the world that is leading to change in the labor market. This has combined communication spaces in order to find several avenues of revenue expansion (Brueller, Carmeli and Drori 2014).

The cross-border merger and acquisition of Microsoft has been mostly characterized by constancy in lowest recruitment as well as dismissal rates. This in turn appears to strengthen several skilled personnel. However, there is a high rate of unqualified labor among new employees, and half of the recently employed workers work on the basis of elastic forms of employment. The total augment in employment recorded the lowest rates that have been accompanied with larger use of recruitment as well as subordinate use of dismissals (Lin, Officer and Shen 2014).

It can be concluded that Apple requires to look for the eventual win-win scenario. In other words, while considering a business move as imperative as a merger, it is required to look for a win-win circumstance. While building the superlative scenario, it is imperative to determine whether it would be better to keep the companies operating as a different unit or incorporate them under a single umbrella. One of the major difficult characteristics of merger and acquisition is that of economizing. Apple requires to restructure lay-offs due to overlapping of management roles. Apple was able to keep hold of as well as integrate decisive players of Beats into the iTunes team under the Apple-Beats contract. The requirement to incorporate two diverse corporate cultures is often ignored that had led to challenges on the other side of the financial merger. While merging and acquiring, it is imperative to remember that the incorporation is likely to take more time than predictable. It can also be concluded that cross-border mergers and acquisition plays a major part of universal foreign direct investment activities. M&A strategies are often used as a way to gain entry into a foreign market that helps to get engrossed in a dynamic learning procedure. The M&A strategies are mostly accompanied by several changes in the total rate of unemployment of the Company. The reduction in the overall number of workers is mostly considered as the development of M&A strategies. This is however, followed by a period of constancy as well as augment in unemployment. However, the changes in the labor market due to merger and acquisition mostly affects the workers with clerical employees being particularly hard hit in this regard. The reduction of several unskilled employees is not considered as a priority.

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