Describe about the Labor Market Trends, Employer of Choice, and Staff turnover?
It is very important for every business to understand the importance of labor market trends so that the organization’s growth can be planned accordingly. Labor market will help the organization to understand the below things.
Certain skills are very rare so if an organization is planning to hire people with those skills then they will face difficulty. At the same time, the available resources in the market would charge lucrative salary or wages. In the UK, acquiring employees for construction industry is one of the most difficult things to do. In the past, there were government apprenticeships schemes, which help the employers from construction industry to acquire the required set of people. Today, government is motivating the youth to undertake higher studies, and hence, there is a scarcity of people who are willing to work in the construction industry (Chen 2014).
Location also creates an impact on the availability of skills. Employees are willing to work in certain locations as compared to that of the other locations. The mining industries, which are located in Yorkshire and South Wales, faces a lot of complexities in acquiring people for the vacant positions in the organizations. On the other end, there are locations, wherein people are overwhelming to be a part of it (Serban 2015).
Labor force trends in different countries contexts
The population of the nation creates a great impact on the availability of labor. If the youth population in the nation is very high then the country need not be worried about the lack of availability of skills. On the other end, if the aging population is more then this is not a good sign for the employers as the employers will have a tough time in hiring employees.
Looking at the population growth, it can be said that the population was developing nation is growing continuously, but the case is not same with developed nations. According to the United Nations Population research report, the world population was 7 billion in 2011, and is expected to reach 9 million by 2050. This population will exceed more than 10 billion by the end of 2100, but the fact is that the population growth is not equally divided among all the nations (Chen 2013). The population growth in developing nations is higher than that of population growth in developed nations. The population of developed nation is 1.24 billion in 2011, and it will grow only to 1.34 billion in 2100. Europe and Japan has noticed that there is a steady decline in the fertility rates, and at the same time, the existing population is also aging. Spain, Italy and Germany’s population is expected to reduce further by 15 to 25 percent. Countries like United States, Great Britain, Australia, and Canada is safe because of the growing immigration population from developing nations (Harding 2013).
Tightening and loosening marketing trends
Off shoring is one of the keys trends which are being followed by the developed nations. With the growing population, the developing countries are trying to urbanize so that they can avail the best of education. Increase in educational qualification allows them to take them off shoring opportunities that are available in the developed nations. Most of the white collar jobs in the US are outsourced to developing nations (Ciuhureanu 2014). IT Outsourcing, and Business Process Outsourcing are the two common jobs which have been outsourced to developing nations from most of the developed nations. In the past, these tasks were completed by college graduates, but today, the number of graduates is less as compared to that of the work which needs to be completed. On the other end, there are jobs like that of accounting, engineering and finance, which cannot be undertaken by people from developing nations or any other for that market. The US taxation system cannot be well understood and implemented by a student from Chinese or Indian university. The employer should identify the tasks that can be outsourced in a developing nation, and the tasks which will have to be completed by the local people only.
The increasing number of organizations is giving a tough time to the multinationals which are present in developed countries like that of the US, and the UK. In the past, increasing number of graduates was willing to work in developed nations, but that is not the situation anymore. The number of multinationals in developed nations is acquiring the educated youth for the betterment of their nation, and hence, the developed nations are no more a desired destination for many graduates. In 2011, the ten largest economies of Asia spend around $399 billion on research and development, and the US economy spare $400 billion for the same research and development. The graduates who are willing to work in research and development need not be dependent on the developed nations as now they can get the desired job in their own country (Cipollone 2014).
Role of government, employers and trade unions
The government should understand the future needs of the employers and accordingly come up with new educational courses so that the young generation is employable. If the young generation continues to study the outdated information then they may be unemployed.
The employers will have to ensure that the employees are updated with the technologies that will be used in the organization. Continuous training and on-the-job training will help the employees to grow further and stay updated with the market requirements.
The trade unions should support the various training programs which are prevalent in the organization. They should accept the fact that the organization is willing to grow with the existing employees and it is a good sign.
Looking at the current labor trend, it can be said that the labor need of developed nation is dependent on the developing nations. People in the developed nations are willing to take up jobs that match their educational qualification. If a construction industry is looking for manpower then they will be available with overqualified graduates, who are not able to find an opportunity matching to their qualifications. These graduates will take up an opportunity in construction industry, but simultaneously, they will look for an opportunity in the open market so that they can find something that best matches with their educational qualification (Aurora 2013).
The population of developing nations is increasing, and the population of developed nation is getting stagnated. Due to this, the management of organizations will have to outsource many white collar tasks to the developing nation. Similarly, there are plenty of multinationals, and hence, the youth from different corners of the world aren’t willing to migrate to developed nations.
The management of the organization will have to track the daily activities in the organization. Accordingly, they should decide on the tasks that can be outsourced, and also the tasks that will have to be completed by the local people. This report will help the CEO to understand the hiring that they need to do. It is always financially feasible to outsource the tasks rather than getting it done by paying extra (Giovanni 2014).
Strengths and weaknesses of labor market competitors
There are plenty of organizations which are competing for the same labors that are available in the market. Two such competitors are Starbucks and McDonalds. The strengths and weaknesses of each of the competitor are elaborated below.
Strengths of Starbucks
Weaknesses of Starbucks
Starbucks holds a reputation name in the market and hence, employees are willing to be a part of Starbucks
In the past, Starbucks was offering great remuneration to the employees but now, the remuneration and also the employee benefits have reduced.
More than 13000 employees are associated with the organization
The employees have to work for long hours and that is disliked by many employees because the employees aren’t paid sufficient for the overtime that we do.
Strengths of McDonalds
Weaknesses of McDonalds
The employees in trained and groomed to meet the organizational requirements. This makes them better and employable.
Long working hours is a problem in McDonalds. Many a times, the employees are tired of the long working hours.
The employees in the organization are offered internal growth. This allows the employees to improve so that they can reach the managerial designation quickly.
Lack of incentives of the employees doesn’t motivate the employee to perform better or stay longer.
Employer of choice
What is employer of choice?
Being employer of the choice is not a random thing that has happened to organization overnight. Organizations will have to put in lot of efforts so that they can achieve this tag of being the employer of choice. Employer of choice means the employer has created an environment wherein employees are willing to work, and at the same time, the organizations should promise a long-lasting career to the employees. Employees prefer to work with “en employer of choice” organization because they believe that they can gain better experience in terms of training, perks, salary, incentives, development, opportunities and purpose for being. In the past, having a gym and daycare center was great deal, but today, this has become a very basic thing, and hence, employees expect more than that. Employees want to feel motivated and engaged throughout the day so that they can achieve a sense of satisfaction (Jacques 2013).
Why to be employer of choice
There are various advantages of being an employer of choice, and hence, plenty of organizations are trying hard to achieve that tagline. Few of the advantages of being an employer of choice are as follows-
Employees, across the globe, are willing to be a part of an organization which is termed as “employer of choice”. The potential employees will themselves come to the employer, looking for an opportunity. The organization need not invest much of cost in recruiting and marketing about the open vacancies in the organization.
The organization will have the best of employees, and hence, they can be rest assured that the productivity in the organization would be more. Apart from that, the senior employees will take care of the new resources.
Employees in the organization become more productive when they decide to stay with the organization for longer period. The employees prefer to stay with employer of choice because of the continued benefits that they receive from the organization. These employees will understand the organization’s suppliers and vendors. This will help the vendors and suppliers to be more connected with the organization (Bellou 2015).
Finding better people will be an easy task for the employer of choice. Lot of people will apply for the open positions in the organization, and these applicants would be from the best of lot available. The mediocre employees will be skeptical about applying with the employer of choice, and hence, the resumes received for vacant positions would be better (Maas 2014).
How to be the employer of choice?
The organization will have to undertake various activities so that they can be termed as the employer of choice. Few of the strategies that can be undertaken by an organization to achieve the “employer of choice” position are as follows: -
Employee engagement is one of the important things that need to be undertaken by the organization. All the employees in the organization are engaged at all point of time. The management of the organization will have to come up with creative ways by which the employees are completely occupied. The immediate managers should personally know the employees so that the employees can be understood better, and simply retained.
Employees expect the employers to reward them so that they can feel good about their association with the organization. The employers should benchmark their reward system against the standard market rates so that the employers can pay them better than that of the other companies (Geisel 2013).
Succession planning needs to be undertaken by the organizations so that the organization can get in more youngsters. The management of employer of choice will have to help employees plan about their complete life (Brown 2014).
Positioning as employer of the choice
Different organizations have been named as employer of choice because of various reasons. Few of the reasons due to which employers are named as the employer of choice are discussed below.
Time and again, Google has proved that it is a desired employer for lot of employees. Google ensures that they care of the employee needs. Google offers a variety of breakfast, lunch, and dinner (if the employees stay late). Google campus has coffee bars and juice bars as well (Dafny 2013). The employees believe that this helps them to enjoy good food in the office area, and they also get to know their colleagues better. Google’s management believes that this saves their time, and hence, the productivity of employees also increases. Google provides travel insurance and emergency assistance to all its employees. This is applicable to employees even when they are on personal vacation (Clark 2014).
Apple is known in the market for the best perks that they offer to the employees. All the employees at Apple are given an option to choose from the wide range of options that the organization has to offer. These benefits are offered to part-time employees as well. There are plenty of benefits like 401K, flexible spending for childcare, medical expenses, and others. Apple employees are given discounts on the Apple product that we buy (McDevitt 2014).
Why employees leave organization?
There are various reasons due to which employees look for job change rather than continuing with the same organization. Few of the reasons due to which the employees leave the organization are as follows: -
Compensation is one of the biggest concerns for most of the employees. Employees decide to leave the organization so that they can get paid well, in some other organization. This will help them to take care of their financial requirements better (Swarnalatha 2014).
If an employee feels that the growth opportunities in a particular organization are lesser then they will start looking for a change in their job. Initially an employee may be willing to work as a software developer, but later, they will be willing to move to managerial role rather than continuing as a software developer for the rest of the life. If they feel that in this particular organization, they will not be able to grow then they will look for organizations that offer them growth (Schulthesis 2015).
If the employee feels that they are not getting what they expected from the job then the employees may leave the job. In many cases, it happens that if the software developers are put in maintenance project for a long time period then they start looking for a change. Software developers look for fresh projects wherein they can do the basic coding rather than just correcting the codes which have been already written (Deery 2015).
If there is no work-life balance then the employees will start looking for an opportunity. Many employers believes that keeping employees busy and occupied is one of the best ways by which they can be retained, but this cannot be proven to be right at all point of time. If the employees are staying late in the evenings, on all days, then slowly and steadily, they will start looking for an opportunity outside (McCann 2013).
Costs associated with dysfunctional employee turnover
The dysfunctional employee turnover needs to be avoided by the employer at any cost so that they can save the organization from the loss that they would make. Few of the costs associated with dysfunctional employee turnover are as follows: -
Dysfunctional employees can directly create an impact on the profit that the organization makes so this can create an impact on the revenue generated by the organization.
Create an impact on the existing workforce as they might be losing their best team member, colleague or mentor.
The employee turnover of the organization can be calculated using the below formula.
Yearly turnover rate = (Number of employees who left the organization in a year/Average number of employees in the year) X 100 (Anna 2013)
Approaches to retaining talent
If an organization thinks that there are plenty of potential employees available in the open market, and hence, retention of employees is not much important then the organization is thinking on the wrong track. There are various reasons due to which retention needs to be undertaken by the organization. Few of the reasons on importance of retention are as follows: -
The cost of turnover is higher, and this needs to be understood by the employer. When an employee is higher, the organization spends money on recruitment. On the other end, an employee in the organization is given lot of training, and the organization invests lot of efforts in them so when an employee leaves the organization, the expenses are costs which cannot be recovered (Derek 2013).
An employee in the organization is aware of plenty of things that are happening in the organization. When an employee leaves the organization, he takes all the company knowledge with him (Kalsbeek 2013).
Excess attrition in the organization means that the organization is not a great place to work. Potential employees will not be willing to be associated with the organization. This can spoil the reputation of the organization among the employees.
A new employee who comes in the organization will take some time to settle in the new environment, and hence, there would be an interruption in the services that are provided by the organization to the customer. The new employee will take some time to understand the organization, the environment, and also the customers. This time period is very crucial (Spittle 2013).
Strengths and weaknesses of different approaches of employee retention
Each of the strategy used by the organization to retain the employee has its own strengths and weaknesses. The strengths and weaknesses are few of the strategies are discussed below.
Paying an employee above the market standards is one of the common strategies used by employers. In this case the organization pays the employee so that the employee can stay with the employer for a longer time period. The organization is paying more than the market standard and hence, the employee will expect more from the organization. Apart from that, always there would be some or other organization which is willing to hire these employees.
Training the employees is another strategy used by organization to retain the employees. These employees may leave the organization once the training program is complete so this can considered as a loss to the organization. With the help of appropriate training, the performance of the employee is improved and hence, this is a positive sign.
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