The impact of labor market and other factors on the changing nature of human resource management

8/9/2019 The impact of labor market and other factors on the changing nature of human resource management

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Sonia rao

10-111


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The impact of labor market

and other factors on thechanging natureof human resource

management


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Introduction

• An assessment of the contemporary labor marketcontext of HR and the impact of current trends inlabor supply and demand on the practices associated

!ith HR"

• #abor market context ine$itably shapes the approach a%rm takes to HR and is one of the key factors indetermining an organi&ation's ‘degrees of freedom’ inHR strategic formation

• ($er recent years a range of de$elopments in the

economic) political) technological and social spheresha$e signi%cantly altered the composition of the laborsupply and the types of labor re*uired by

contemporary %rms"


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Introduction

• +irstly ) by de%ning !hat is meant by internal andexternal labor markets before discussing in detaila range of de$elopments in organi&ations"

• ,ith this in mind) it takes a relati$ely broadperspecti$e on the notion of labor markets anddiscusses a range of de$elopments that aretaking place inside and outside of organi&ations"


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,hat is a labor market

• A labor market is the place !here !orkers and

employees interact !ith each other"• In the lab our market) employers compete to hire

the best) and the !orkers compete for the bestsatisfying /ob.

• #abor market information co$ers the principalelements of the labor market and its operations"

•

The principal elements are the demand for laborand the supply of labor"

• emand means the number of /obsa$ailable" Supply tells you the number of people!ho are able !ork"


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,hat is a labor market

• A labor market can be understood as themechanism through !hich human labor is boughtand sold as a commodity "

• to achie$e its strategic ob/ecti$es) a fundamentalconcern for an organi&ation is to ensure that ithas the right people !ith the right skills)kno!ledge and attributes in the appropriatepositions"

• T!o types of labor market

1" internal labour market

" 2xternal labour market


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Aamir 3a&ir

11-101


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Internal labor market

• The internal labor market refers to that !hichexists !ithin a single organi&ation and representsits internal supply or stock of labor"

• internal labor market is the mechanism by !hichexisting employees are attributed particular roles!ithin a %rm"

• The speci%c characteristics of an organi&ation'sinternal labour market are re4ecti$e of a number

of HR policy"

• internal labour market can ful%l a number offunctions for an organi&ation"


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Internal labor market

• in seeking to retain employees the internal labormarket can act as a source of moti$ation"

• The operation of the internal labor market canalso be understood as a de$ice for managerialcontrol through a process of strati%cation"

• internal labor market is often a characteristic of5best practice' models of HR 6 as represented bythe emphasis on employment security and high

le$els of in$estment in training"


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2xternal labor market

• An external market represents its external supplyor a$ailable stock of labor"

• 7oth the types of labor that the %rm re*uires thepotential pool of !orkers a$ailable aredetermined by the industry sector in !hich theorgani&ation operates) its central acti$ities) itslocation) si&e and scope and its competiti$e HRstrategies

• #abor markets can be analy&ed according to thedistribution of skills) kno!ledge) educationalachie$ement and occupational group"


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eh!ish Hayat

11-10


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9nemployment

Structural unemployment

Structural unemployment exists !here there is afundamental mismatch bet!een the supply and

demand for labor"

+rictional unemployment

+rictional unemployment re4ects a temporarymismatch in the demand and supply of labor!hich is al!ays present in an economy"


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#abor market change

• labour market is shaped by a range of processes"

• #abor market changes by some factors

1" go$ernment policy

" shifting social attitudes

• if the go$ernment alters the supply of particular5types' of labour to the market through educationand training policies) %rms !ill change their demandstrategies

• It is important to note that some elements appear onboth sides of the table stressing the re4exi$erelationship bet!een the supply and demand forlabor"


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7eenish Rafa*at

11-10:


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2conomic change and the labor market

• Recent de$elopments in the broader economiccontext of employment are also altering both thedemand for and supply of labour"

• ad$anced capitalist economies are argued to ha$e

entered an era of post-industrialism ;7ell) 1?associated !ith the de$elopment of a kno!ledge-intensi$e economy"

• ,atson ;00@ BC? de%nes the 8ost-industrial

society as 5a type of economically ad$anced socialorder in !hich the centrally important resource iskno!ledge) ser$ice !ork has largely replacedmanufacturing employment


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2motional labor

• 2motional labour as a result of the shift to greaterser$ice sector employment"

• 2I is de%ned as the indi$iduals' ability to de$elopand express a range of skills such as a!arenessof the emotions of others) self-a!areness)empathy and in4uence"


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The 4exibility of organi&ational structure

• (ne implication of the changing organi&ationalcontext is that as markets become moreunpredictable and dynamic"

• changing organi&ational context increase the4exibility of organi&ation"

• changes in organi&ational structure ha$eprofound implications for !orkers in terms of /obcontent) employee moti$ation) /ob security and

organi&ational commitment"


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The 4exibility of labour

• (ne key determinant of an organi&ationDs abilityto respond eEecti$ely to a changing anduncertain business en$ironment is the 4exibility

and adaptability of its !orkforce" • +lexibility of labor is re4ected in an employer's

ability to recruit or dispose of labor as re*uiredFalter labor costs

in line !ith market needsF allocate laboreGciently !ithin the %rmF and) %x !orking hoursto suit business"

• the ultimate ob/ecti$e of 4exible labor is the bestutili&ation of labor to minimi&e labor costs"


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Humaira Ashraf

11-10C


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The operations of the labour market

• The operations of the labour market include

1" #abour exchange 6searching for !orkers)oEering people /obs) hiring acti$ities

" o$ernment policies and acti$ities 6 createdto help reduce the number of people !ho do notha$e /obs


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#abor market failures

• #ike product markets) labour markets can also fail"

• The main types of labour market failure are the existenceof skills gaps) poaching) labour immobility and inequality "

• 1" Skills gaps, training and poaching

in free markets) there is likely to be a skills gap)because insuGcient le$els of general skills) such as literacy)numeracy and IT skills) !ill be pro$ided by pri$ate %rms"

Remedies

1. 8ro$iding $ocational training by sponsoring college and

uni$ersity courses that are less academic and more focusedon /obs and /ob skills"

http://www.ft.com/cms/s/2/08f174fe-314c-11dc-891f-0000779fd2ac,dwp_uuid=e0c6c676-3099-11dc-9a81-0000779fd2ac.htmlhttp://www.ft.com/cms/s/2/08f174fe-314c-11dc-891f-0000779fd2ac,dwp_uuid=e0c6c676-3099-11dc-9a81-0000779fd2ac.html


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• " Adding a skills component to academiccourses) such as eys Skills and +unctional Skills in the 3ational Jurriculum"

•

>" i$ing %nancial assistance) such as traininggrants or subsidi&ed training loans) such ascareer de$elopment loans"

• :" 8ro$iding special training $ia the internet) suchas the #earn irect scheme) !hich is a recentlyestablished internet training ser$ice sponsored bythe 9 go$ernment"

http://www.qca.org.uk/qca_6062.aspxhttp://curriculum.qca.org.uk/http://www.direct.gov.uk/en/EducationAndLearning/AdultLearning/FinancialHelpForAdultLearners/CareerDevelopmentLoans/index.htmhttp://www.learndirect.co.uk/http://www.learndirect.co.uk/http://www.direct.gov.uk/en/EducationAndLearning/AdultLearning/FinancialHelpForAdultLearners/CareerDevelopmentLoans/index.htmhttp://curriculum.qca.org.uk/http://www.qca.org.uk/qca_6062.aspx


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• 2. Labour immobility

#abor immobility means that labour does not5mo$e' to !here it is in greatest demand"

• There are three types of labour immobility"

• 1" eographical immobility

• " Industrial immobility

• >" (ccupational immobility


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omal Ka$aid

11-10=


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• 1. Geographical immobility

eographical immobility occurs !hen!orkers are not !illing or able to mo$e from

region to region• " Industrial immobility

Industrial immobility occurs !hen !orkersdo not mo$e bet!een industries) such as mo$ing

from employment in the motor industry toemployment in the insurance industry"

• 3. Occupational immobility

(ccupational immobility occurs !hen

!orkers %nd it diGcult to change /obs !ithin anindustry


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• Remedies• 1. Training and re-training schemes to enable

labour to de$elop their general skills and become

more employable in a $ariety of occupations orindustries" eneral skills include transferableskills like numeracy) literacy and IT skills"

• " ore information about /ob $acancies so thatsearching for !ork is easier

• >" Subsidies to labour or %rms) such as help !ithre-location expenses) and subsidi&ed housing"

http://www.direct.gov.uk/en/Employment/Jobseekers/LookingForWork/index.htmhttp://www.direct.gov.uk/en/Employment/Jobseekers/LookingForWork/index.htm


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• :" Incenti$es to o$erseas %rms locate subsidiariesin 9 regions) such as in ,ales or the 3orth 2ast"

• C" Incenti$es to domestic %rms to relocate to theregions) including pro$iding 5tax breaks' and

in$estment grants"


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Human Resource anagement

• is a function in organi&ations designed tomaximi&e employee performance in ser$ice oftheir employerDs strategic ob/ecti$es" HR isprimarily concerned !ith ho! people are

managed !ithin organi&ations) focusing onpolicies and systems"


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uhammad +aroo*

11-110


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componentsL+unctions of HR

Recruitment and selection

Recruitment includes such elements such as

• e$eloping /ob description

•

Ad$ertising the /ob postings• Screening applicants

• Jonducting inter$ie!s

• 3egotiating salaries and bene%ts


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raining and de!elopment

• (n the /ob as !ell as refresher

• easurement Mmonitoring

•

Training systems must be streamlined across alllocations in order to make communication andsharing of resources a con$enient task


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"ro#essional $e!elopment

• #eadership training

• 2ducation

•

2ncourage the employees !ith opportunities forgro!th

• Sponsoring career ad$ancement seminars)corporate social responsibility

• 8ro$ide e*ual importance to employee


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%ene&ts and 'ompensation

• +lexible !orking hours or !orkdays

• 2xtended $acation time)

•

8aternity lea$e or childcare• edical insurance)

• Jorporate gym membership discounts

• Jontinuing educationLskills de$elopment

•A!ard M recognition programs


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Tayyiba I/a&

11-11


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(nsuring Legal 'ompliance

Jompliance !ith labor) tax and employmentla!s is a $ital part of safeguarding the

organi&ation's continued existence" HR has tobe a!are of all the mandate la!s and policiesregarding employment practices) !orking

conditions) tax allo!ances) re*uired !orkinghours) o$ertime) break times) minimum !age)and discrimination policies as noncompliance

can aEect producti$ity and ultimately)pro%tability of the company"


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HR Issues and Jhallenges

• Nuality impro$ement

• Jhanging !orkforce

• #eadership de$elopment

•

(rgani&ational eEecti$eness• #earning and de$elopment

• Technology and training

• Nuality of !orking life ;N,#?

•

Jhange management• Succession planning


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7est HR 8ractices

O7est HR practicesP measures

• 2mployment security

• Selecti$e hiring

•

9se of teams and decentrali&ation;a? Team acti$ities

;b? Interaction facilitation

• Jompensation and incenti$es

• Jontingent on performance

;a?Incenti$es to meet ob/ecti$es

;b?Recognition and re!ards


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7est HR 8ractices

• 2xtensi$e training

;a? Training on /ob skills

;b? Training in multiple functions

•

2mployee in$ol$ement and internalcommunication arrangements

;a? 2mployee in$ol$ement and communication ofstrategy

;b? +eedback on performance

• Internal career opportunities

• Kob descriptions


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ubashar Shah&ad

11-11>


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Impact of labor market on HR• The impact of labour market transformation on the human

resource management practices !ere analy&ed by suchauthors as ,ilton ;010?) alleberg ;00>?) orris ;00:?)and others"

• These author single out C key factors

1" Jhanges in the composition of economically acti$epopulation"

" The demographic situation"

>" +luctuations in the rate of unemployment"

:" #egal restrictions"

C" The changing re*uirements for skill"• The economically active population consists of those who,

during the research period,!ere !orking or acti$ely seeking!ork ;i"e" registered at the #abour 2xchange L Kob Jentre?"


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Indicators

ey indicators of labour market

• 9nemployment

• The research has re$ealed that the high le$el of unemploymentcauses concern about not only the unemployed but also the!orking population" The high le$el of unemployment allo!s

employers to ignore the material and social needs of employeesand to break labour la!s"

The lobal 2mployment Trends report issued by theInternational #abour (rganisation ;I#(? pro/ected that

8akistan's unemployment rate Q C"1= in 01>" +or 01:)

I#( claimed unemployment rate !ill likely rise to C"


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• Legal restrictions

• A number of la!s contain pro$isions prohibiting child labour

or regulating the !orking conditions of child and youngperson !orkers" The most important la!s are The +actoriesAct 1:" The ,est 8akistan Shops and 2stablishments(rdinance 1


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• The lack of qualied employee

• The shortage of *uali%ed employees is becomingone of the key factors hindering economicde$elopment in #ithuania" The labour force

*uali%cations fre*uently do not correspond to thedemands of the market) and the phenomena ofstructural unemployment and lo! professionalmobility can be obser$ed" In its turn) the system of

professional orienteering holds numerous 4a!s) the*uality of training is inade*uate) and employersallot too little attention and money to the trainingof employees"


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Summary 8oints

• The labor market context of contemporary !orkorgani&ations is highly li*uid and unpredictable)shaped by a !ide range of economic) social)technological) legal and political factors"

• Jhanges to the supply of labour) for example)changing demography) education and socialattitudes) in4uence the approach an organi&ationtakes to HR) particularly employee resourcing

and the design of /obs"• Jhanges to the labour market and organi&ational

context of employment ha$e signi%cantrepercussions for Nuality of ,orking #ife ;N,#?


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Summary 8oints

• An increasingly competiti$e and unpredictableglobal economy are argued to re*uire greater4exibility of both organi&ational form and labor"

The impact of labor market and other factors on the changing nature of human resource management

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