Discuss about theLabur Market Trends Implication for Organisation.
The world is in a state of change, and so is the demand for and supply of labour and their skills, with respect to the emerging economies, worldwide changes in labour markets, and of course, technological innovations. A major aspect of human resource management is to make use of the workforce keeping note of the fact that the organisation needs to have easy access to various skills it needs, at right time and right place, in order to maintain an upward trend in its performance. For this, the management has to attract, retain and also avoid the employee’s discretion of changing his employer. This requires the exercise of various strategies.
It is important to introduce the strategic approaches that companies need to take to establish themselves as successful employers in the labour market and make effective and adequate plans so that they can succeed to meet their present and expected organisational skills. In course of the paper, we aim to develop the main operational tools, prevalent techniques and practices which organisations need to take proper care of their internal and external resources. These include recruitment, selection, planning, worker retention, planning, retirement and also, the impeachment processes.
During past few decades, companies have been operating in altering labour market conditions. Labour markets in countries of all over the world are in a state of continuous changes which demand a new approach to the management of human resources. For that, managers need to identify the key factors that transform labour markets and note how this change is influencing human resource management exercises, more specifically, human resource specialists’ functions and efficiencies.
Thus, the human resource managers need to overview the ways different organisations are regulating these activities and which are the most effective ones considering the regional and income diversities all over the world.
Human resource management gets determined by many factors – internal and external. An external one is the socio-demographic environment of the firms that has witnessed remarkable alterations in the last few decades. The factors transforming labour markets globally are:1. Changes in composition of economically active population.2. Demography.3. Fluctuations in the unemployment rate.4. Legal constraints.5. The modifying skill requirements.We consider the case of Lithunian and British labour markets. TABLE 1: The key indicators of the Lithuanian labour market, 2009–2012 (%)
| Indicators | 2009 | 2010 | 2011 | 2012 |
| Rate of employment | 49.8 | 47.8 | 49.9 | 57.5 |
| Rate of unemployment | 13.7 | 17.8 | 15.4 | 13.2 |
| Labour force participation rate (activity rate) | 57.7 | 58.1 | 59.0 | 62.2 |
Source: The Lithuanian Department of Statistics: Employment statistics.
We see that the activity rate in 2009–2011 is increasing together with the increasing rate of unemployment in the same period. Moreover, the active population is getting shifter due to rise in women’s works and education, due to fall in birth rate. The number of elderly employees also gets raised. The average life expectancy of the population also gets increased. Laws have been passed in Lithunia to stop discrimination on age, race, gender, religion, etc. Thus, the management got trouble in recruiting and retaining employees.
We see that the activity rate in 2009–2011 is increasing together with the increasing rate of unemployment in the same period. Moreover, the active population is getting shifter due to rise in women’s works and education, due to fall in birth rate. The number of elderly employees also gets raised. The average life expectancy of the population also gets increased.
Laws have been passed in Lithunia to stop discrimination on age, race, gender, religion, etc. Thus, the management got trouble in recruiting and retaining employees.
We consider the labour market of UK now. The British labour market has experienced a boom. The working population has increased mildly, but to a remarkable extent. This is largely attributable to the frequent hikes in pay scale of employees. The unemployment rate has been standing steadily at 5.1%. Many other reasons are there for this. But two vital reasons are that, first of all, the year 2015 faced a drastic growth in employment by nearly 600,000, and after that it paused a bit which is natural that a country can never maintain the same growth throughout. A move towards full employment will be slower from this achievement due to obvious reasons.
Secondly, the economy has lost its speed in the last winter. The slowdown of productivity and wages has not been massive, but has reflected that employers should judge their decisions time and again about hiring, particularly in retailing sectors and hotels, which will be influenced by national living wage.
The last data on labour market from the Office for National Statistics accounts for the time from January to March 2016, so the thought that Britain exiting the EU, which was a major concern in late February, is not much relevant in context of the present scenario. However, the probability of a vote for leave will keep the labour market in a stable situation for the next quarter.
Work from RBS stretches beyond original data and official figures to show that the rate of employment has been higher only when the economy was operating flat out at the time of the Second World War.
The expansion of the workforce is the result of a number of different trends: the population is rising, Britain has become a magnet for those looking for work elsewhere in the EU and people are working longer before they retire.
The growth in wages is running in lag behind the growth of jobs. During the three months before March, regular pay went more than 2.1% during the same period in 2015. It indicated a slower yearly rate of increase than that observed in the early months of 2014.
The higher minimum wage that got implemented in April was thought to increase the average earnings for those who get one of the lowest incomes.
Development of resourcing strategies
In the face of a shifting labour market all over the world, a fundamental aim of the human resource management should be to contribute to the development of resourcing strategies. This involves whom to recruit instantly, how to make him engaged in work with rewards, etc. as it will help to attain mutually beneficial goals of the two parties.
The recruitment process may get influenced by various factors. Employers need to adapt their recruiting practices to the changing factors viz., technological, environmental, real life cases of job loss, etc. more importantly, they should regulate the working time of the workers. They should also make provisions for, say, wage indexation to win the confidence of workers and avoid uncertainties. They should act as trustworthy units during cases of market stagnation to elevate their goodwill. It is needless to mention that when the reserve army of labour gets replenished, the firms should not hire ‘anyone’ from the available set who are willing to at the lowest wages too and concentrate on skills, as the performance of their units may get degraded otherwise.
On the go to maximise employee retention
Perhaps the best way to retain employees is making arrangements for various incentives or perks like bonus and cash rewards. Moreover, offering them training enriches them with more of human capital. This not only makes a good impression of the company to its workers regarding its initiative to rebuild the expertise of its employees, but also increases its profit as experienced workers deliver better outcomes at work.
The monthly pay scale of the workers means a lot here. Other than this, the benefits that they are provided with, like health and life insurances, paid leaves, travel allowances, etc. minimise the chances of worker retention.
In the present condition, the management has to be well-aware of the labour market conditions and frame ways to retain employees accordingly despite the fact that corporate world should never leave a chance to earn a penny.
General discussion
Now let’s consider a situation that the Chief Executive Officer of my company is interested to know from me the current and likely feature of the labour market. Primarily, I would like to mention that like all other markets, the labour market is in a state of change like all other markets. Considering labour as a commodity, then it is worth mentioning that a perfect equilibrium in the labour market is just special case following Say’s Law, since, there always use to be voluntary and involuntary unemployment. We generally do not consider the voluntarily unemployed ones in the workforce. Moreover, children and aged persons only increase the dependency ratio without adding to the workforce. So while considering labour market trends, we need to take all these into account.
Considering the situations of population explosion in different countries, I can say that we need not worry much about the supply of labour. Also, with increasing levels of vocational education, the human capital, i.e., the skills of the workers have been increasing in a spontaneous rate. But to keep pace with the condition, there has to be a minimum wage below which, the firm cannot pay its workers on the ground that it may lead to below quality work or increase the chances of worker turnover and vice versa.
Though it is difficult to predict the future, still it can be said that in the near future, labour market situations are not going to loosen.
Future size and composition of the labour market have implications for productivity and sustainability of the social security systems. A driving force of changes in labour market is changes in population. If population gets increased in the next period, then the reserve army will increase and the capitalist can draw labour any time. But with time if it stabilised, then the supply of labour will fall relative to the labour demand and various steps would have to be taken by capitalists.
It is unfortunate that many people of the pension age are physically and economically active and also technologically sound; however, they do not join the labour force. Whatever the case is, a capitalist should take care of the fact he should be prepared with all his strategies and planning.
Brain drain is an important problem here. Whatever training a company provides to its staff, are taken away abroad. This reduces the labour force of a country, specially the skilled ones and the case is totally unpredictable.
The agricultural, rural and informal sectors attract a lot of workers, sucking away their skills, and making them unavailable for technological works.
The major advantages of being the employer-of-choice:
When an employer becomes the employer of choice, it implies that the applicants are eagerly waiting to work for him, the mass envy his employees, he receives innumerable resumes online and offline every day, and that the employer’s most talented workers are retained in the company throughout their working lives perhaps. It’s the blessing for any employer. The trustworthiness and creditworthiness of the firms get increased by multiple times with the stock of dedicated workers who become more responsible.
The benefits of being the employer-of-choice are:
Marketing and recruitment: The attractiveness of the company will reduce the expenses of marketing and recruitment of talented workers.
Optimum Performance: With more of high quality people available at hand, the productivity of the workers and hence the profit of the firm shall rise.
Efficiency and Effectiveness: With becoming more judgemental regarding recruitment, as there is a chance to select from a batch of brilliant workers, the efficiency and effectiveness of workers of the company will be upgraded.
Fewer turnovers: Workers will crave for a job in this company, instead of finding options to quit it.
Attractiveness to Investors: The creditworthiness and good rating of the company will draw lots of investors which in turn will help in business expansion.
To be the employer of choice, I need to look mostly on the benefits of the workers, their payments, bonuses, perks and each and every single thing that makes them happy, attracts them and make me more and more acceptable to and approachable for them. The behaviour and friendliness of the management with the staff is of utmost importance here. I have to plan and frame such unique things that no other company other than me can provide. An attitude of love matters a lot here.
In 2014, the Adidas Groups became the employer-of-choice worldwide, attracting visitors, fame and also one of the industry’s top talent and searches.
More important from achieving something is to carry it throughout the lifespan which is of great difficulty. A champion company in the true sense will never ever afford to lose its position.
Reasons for worker turnover
Becoming over-strict to workers is a major reason for staff turnover. Being rude, unnecessary and frequent blames, back-biting and retaliations are reasons that increase the rate of employee turnover.
Work- life imbalance is also a reason for the same. Everyone needs a fresh mood to deliver a good work. If the employees are overburdened with monotonous works, then their productivity may get reduced.
Organisational instability is a vital reason for the turnover. If the organisation is prone to shun downs or may going out of business, workers may fall prey to uncertainty and quit jobs.
If the company has any past misconduct that hampered its trustworthiness, then the employees cannot have adequate faith and respect for the company leading to turnover.
If the incentives of my company are not up to the mark, then they would opt for selling their labour power to other companies. If they are motivated by higher pay then they shall switch. If I cannot afford the payment then that is a different issue.
Another thing is that, very often, workers are underemployed. They are dissatisfied with their present job profiles as it does not suit their qualifications.
If employees are bored, they may turnover. It is also a reflection of poor management. So, the management should be strong enough.
Ways to reduce worker turnover
I, as a potential employer, need to evacuate all chances of mistreatment that employees are subject to. I should take the charge to monitor the matter so as to prevent these odd situations.
To help the employee maintain a proper work- life balance, I need to take care of his leisure. I should not make him work for longer hours or order him to give weekend support beyond a limit.
To deal with organisation stability, I need to have a strong base and structure of my company and not leak small faults to the whole team frequently as, this may lead to loss of confidence of workers on the company.
I am sure of the fact that in my company too, there are many workers who are doing work in a particular profile just because of material need. So I need to recruit the right person to the right position.
To ensure that the company wins adequate faith of its employers, it has to take its trustworthiness a s a matter of serious concern and resolve past problems so as to bring the current situation in its favour.
Regarding that due to the extreme work pressure the workers get bored, I should make arrangements to prevent it. If, say, a person can work better when he has access to a headphone to listen to songs, I should permit him to that. I can also arrange for office parties.
Now, it’s a very demanding case that I should prevent worker turnover. Otherwise, I may lose my promising workers from hand and gradually witness the degradation of my company due to dissatisfaction of workers. In this case, the solution I would like to step on to, is that I would like to hold a meeting of the employer, the management and the employees, so that we can have an open discussion about what exactly the problem is and take relevant steps to combat is rather than beating the air.
3. Conclusion
The labour markets in all countries over the world are very volatile and unpredictable. Its movement depends on a number of circumstances like a wide range of economic, demographical, social, legal, and other determinants. Changes in the patterns of labour market modify the approach an organization adopts to put forward the human resource management, and all other aspects that are related to the labour market fluctuations. This condition needs that the human resources departments have to revise their own actions and aims, to implement the steps to reach its goal.
The present trends in the labour market compels human resource managers to implement not only conventional human resource management techniques like recruitment, appraisal, training and development, but also they need to do strategic planning and wise management; they should also work towards the development of skills that support team work, the structuring of the organisation, and modify the managing committee and its management with more efficient bodies. The new functions need the expertise and efficiencies of specialised human resource managers.
The research has also pointed out that worker turnover and their retention is an important aspect of human resource management that needs to be taken care of in the present pattern of labour market trend. Steps should be taken so as to minimise the turnover. Resourcing strategies should be developed more adequately via planning.
All of these modifications will lead to an eventual transformation of traditional human resources management systems and bodies into the ones who handle the fluctuations and patterns in the labour market more professionally and other strata of the society and participate in wise management and implementation of the decisions. This will take them towards the fulfilments of all the wants of a society to which they belong and as a citizen of the nation it is his moral obligation to carry these duties.
The above study infers that, in the currently changing labour market conditions, the functions of human resource specialists have changed their conventional ways and are more directed to reaching the goals of the business and the welfare of the society as a whole.
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