Labour Market Trends & HR Evaluation Approaches In UK And Saudi Arabia Essay.

1.Your organisation is based in two different countries (the UK and Saudi Arabia). Write a short account which briefly assesses the labour market trends in each country. In your account, briefly explain the significance of tight and loose labour market conditions and how organisations position themselves strategically in competitive labour markets.

Assess the major contemporary labour market trends in different country context

Explain how organisations position themselves strategically in competitive labour markets.

Explain the significance of tight and loose labour market conditions.

2.Please give examples of different approaches to HR evaluation e.g. metrics, balanced scorecard, benchmarking, SLA’s, KPI’s, benchmarking, surveys.

You should identify the article that has linked HR practice with positive organisational outcomes. They should summarise the main findings and comment on the persuasiveness of the findings. They may include some of the following points: the link between high organisation performance and effective HR services, human capital, human capital perspectives and building organisation capability.

Contemporary labor market trends in UK and Saudi Arabia

The report aims at providing an insight into the contemporary labor market trends of two different countries UK and Saudi Arabia, strategic positioning of an organization in the competitive labor market and significance of tight and loose labor market. The report would also discuss the different HR evaluation approaches and an analysis of an article that links Human Resource (HR) practice with organizational outcome.

Major Contemporary Labor Market Trends in Different Country

 Labor Market Trend in UK

The contemporary trends in the labor market include (Wilkinson 2013):

1.Impact of De-industrialization: This resulted in lesser number of full time jobs in manufacturing, decline of the trade unions and the structural unemployment.

2.Increase of Service Sector: This made the union less influential, increase in the flexible and the part time hours of working and the enhancement in the proportion of female labor force.

3.Implementation of National Minimum Wage: Its introduction in 1999 enabled one million workers in receiving a National Minimum Wage (NMW) of around £7.20 with the assurance that NMW will rise on a continuous basis (Reeves et al. 2017).

Figure:  Graphical Representation of Minimum Wage

Source: (Khamis 2013)

4.Concept of Zero Hour Contracts: This implies that there are no constraints on the number of paid hours put forward by the firm. It increases flexibility and reduces uncertainty.

Figure: Graphical Representation of Zero Hour Contracts

Source: (Brinkley 2013)

5.Growth in the Participation of Female Labor: This implies the enhanced participation of the female workforce.

Figure: Graph Showing Participation Rate of Women

Source: (Blundell et al. 2016)

6.Increase in the Net Migration: UK experienced consistent migration of labors from European Union thereby enhancing the flexibility of the labor market.

7.Growth in Levels of Self Employment: This was encouraged by lower growth in real wage, the changing technology and the growth in the number of firms.

8.Present Status of Structural Employment: Since the recession of 2008, there has been a fall in the level of unemployment that suggested a lower unemployment rate

9.Growth of the Real Wage: Since the year 2008, there has been stagnancy in the growth of the real wage.

10.Increasing Inequality: Although inequality fell during the period of post war but the later part of the 1970s witnessed rising levels of inequality in real income

11.Increase in percentage of the Old Population: This implied that the increase of retirement age enabled the workforce in working longer.

Strategic positioning of organizations in competitive labor markets

12.Enhanced Flexibility in the Labour Market: UK experienced a decline in the work contracts and emergence of flexibility in work that involved limitation of contracts, contracts of zero hour and contracts of shorter term.

The nationals of Saudi Arabia witnessed higher unemployment levels of 12.4 percent since 2011(Al-Asfour and Khan 2014). This happened due to the structural problems due to competition from the nominally paid foreign workers. Besides, there were problems due to lack of training of the Saudi workers and other demographic issue.

In the year 2010, the Saudi nationals represented only 7 percent in the overall labor force of 47.1 percent (Shah 2013). The reasons being the higher demand of the workers in oil industry, temporary workers for the infrastructure projects and cultural factors like the people’s reluctance to be a part of jobs like constructing, gardening and plumbing.

The unemployment figures of Saudi Arabia portray a higher unemployment rate amongst the female workforce at 35 percent compared to the males that is about 7.4 percent.

Figure: Graphical Representation of Unemployment in Male and Female Labour Force

Source: (Bowen and Finegan 2015)

Organization positions them in the competitive labor market by adopting the following strategies:

1. Through Demand Forecasting: It depends on the turnover rate of the employees of an organization(Gordon 2014). Lesser rate of employee turnover will cause lesser demand of employees thereby benefitting the total profitability of the company. On the other hand, higher turnover will cause higher demand of employees that the organization needs to deal accordingly.
   
   
2. Through Supply Forecasting: The key source of employee supply is determined by the local demography since an organization always prefers local employees (David 2013) . Lack of local supply will force the organization to move places that has supply abundance.
   
   
3. Determining Forecasting Requirement: There are times when there is a lack of skill amongst the local people. This is when organizations hires people from different areas for meeting requirements.
   
   
4. Determination of an Action Plan: At this stage, the company knows its requirements. If the local area does not support the employee demand then the company moves to other areas.

According to Naidu and Yuchtman (2013), tight labor market conditions are situations that arise due to the shortages in the skills and knowledge within aspects of the labor market. This leads to situation with more jobs compared to the workers. Loose labor market refers to situations when there is a surplus of knowledge and skills from the purview of the market. This situation has lesser jobs compared to the number of available workers.

Metrics: The most common one represents Kirkpatrick’s four levels. This includes:

1. Reactions: It is measured with the help of short survey or through presence of a focus group.
2. Learning: Measured with the help of performance demonstration or a written exam
3. Behavior: It depends on the observations of either a third party or a supervisor or a self-report

Balanced Scorecard: It enables translation of the vision and the strategy of a business into customer, financial, growth and learning and internal business process perspective.

Benchmarking: This refers to the comparison of the performance metrics and the business process of a firm with the best practices.                  

SLA’s: These are Service Level Agreement (SLA) represents a contract between an internal or external service provider and end user that defines the level of expected service.

KPI’s: Key Performance Indicator (KPI) represents measurable value demonstrating the effectiveness of a company in achieving the basic business objectives.

Linkage of HR Practice with Positive Organisational Outcomes

The article tries to provide a link between the HR practice and the positive organizational outcome through the identification of High Performance Work Practices (HPWPs). The concept comprises of HR practices necessary for the improvement of the human capital, employee motivation in using the human capital for the achievement of organizational goals and providing the employees with the necessary opportunities.

Significance of tight and loose labor market conditions

Human Performance Work Practice (HPWP) can be either formal or informal. The main findings of the article focus on the informal HPWP that takes place when the employees participate in the activities neither structured by formal HR policies of an organization nor the senior management (Yanadori and van Jaarsveld 2014). The article also identifies that although it is informal but the employee participation in HPWPs like self-directed teams and suggestion program leads to the positive evaluation of the work experience of the employees. Besides, the informal practices have equally been influential as the formal practices in shaping the interpretations of the employees about the HR policies of the organization since such practices reflects the culture of the organization. As per the article, as HPWP reflects the willingness of management in investing the knowledge and skills of the employees so it leads to a positive evaluation of the workplace thereby leading to an enhanced job satisfaction. Besides, HPWP also activates mechanism that positively affects the performance of the organization including the human capital, employee motivation for using human capital for reaching the organizational goals and providing opportunities to the employees.

Conclusion:

The report ends by throwing a light on the various trends of the labor market.. The report also helps one in understanding the different approaches of performance evaluation and draws a linkage between the HR activities and the positive organizational outcome.

References:

Al-Asfour, A. and Khan, S.A., 2014. Workforce localization in the Kingdom of Saudi Arabia: Issues and challenges. Human Resource Development International, 17(2), pp.243-253.

Blundell, R., Costa Dias, M., Meghir, C. and Shaw, J., 2016. Female labor supply, human capital, and welfare reform. Econometrica, 84(5), pp.1705-1753.

Bowen, W.G. and Finegan, T.A., 2015. The economics of labor force participation (Vol. 2054). Princeton University Press.

Brinkley, I., 2013. Flexibility Or Insecurity?: Exploring the Rise of Zero Hours Contracts. Work Foundation.

David, H., 2013. The" task approach" to labor markets: an overview (No. w18711). National Bureau of Economic Research.

Gordon, R.J., 2014. A new method of estimating potential real GDP growth: Implications for the labor market and the debt/GDP ratio (No. w20423). National Bureau of Economic Research.

Khamis, M., 2013. Does the minimum wage have a higher impact on the informal than on the formal labour market? Evidence from quasi-experiments. Applied Economics, 45(4), pp.477-495.

Naidu, S. and Yuchtman, N., 2013. Coercive Contract Enforcement: Law and the Labor Market in Nineteenth Century Industrial Britain. American Economic Review, 103(1), pp.107-44.

Reeves, A., McKee, M., Mackenbach, J., Whitehead, M. and Stuckler, D., 2017. Introduction of a National Minimum Wage Reduced Depressive Symptoms in Low?Wage Workers: A Quasi?Natural Experiment in the UK. Health economics, 26(5), pp.639-655.

Shah, N.M., 2013. Labour migration from Asian to GCC countries: Trends, patterns and policies. Middle East Law and Governance, 5(1-2), pp.36-70.

Wilkinson, F. ed., 2013. The dynamics of labour market segmentation. Elsevier.

Yanadori, Y. and van Jaarsveld, D. 2014. The relationships of informal high performance work practices to job satisfaction and workplace profitability. Industrial Relations, [online] 53(3), pp.501-534.

Available at:https://search.ror.unisa.edu.au/record/UNISA_ALMA51109813380001831/media/digital/open/9915914127501831/12142890200001831/13142955760001831/pdf [Accessed 11 Aug. 2018].