Human Resource Management - Essay Example

? Human Resource Management Table of Contents Introduction 3 Impact of labour market shortages on organizations 3 Main considerations in designing jobs for organizations facing labour market shortages 4 Conclusion 11 Reference 13 Bibliography 16 Introduction The severity and nature of unemployment problems have been documented in various nations. Most nations are of the common consensus that unemployment is an outcome of the mismatch between the types of workers that the supplied by the economy and the types of workers demanded. It is seen that a large majority of the individuals who remain unemployed in the economy are either educated poorly or possess inadequate skills, while organizations are increasingly demanding high skilled personnel from the labour market. The consequence of this condition is high labour shortage in the economy (Pauw, Oosthiuzen & Westhuizen, 2006, p.1). Various nations have been subjected to this problem, out of which the condition of South Africa is worth mentioning. The mismatch has been widening in economies over the years and is evolving as one of the primary causes of concern for organizations. Educational institutions and organizations have been jointly working towards increasing alignment between skills demanded and skills produced. Researchers have identified a number of ways organizations could devise policies and procedures for handling this skills shortage. Not only do they require modification in the job designs but also must consider altering the existing human resource strategies. The project seeks to explore the various possible alternative suggested by researchers and practitioners that can be applied for designing jobs in organizations confronting with labour market shortages (Dychtwald, Erickson, Morison, 2006, p.88). Impact of labour market shortages on organizations Organizations are faced with a number of dilemmas arising out skill shortages in the economy. Researchers and business practitioners are of the opinion that skill shortage has a direct impact on labour costs in organizations. Labour shortage happens to be one of the propelling factors for undertaking offshore recruitments as the local skill availability falls short of the demands. Researchers have identified the standard for cost effectiveness as the price of the available as well as qualified workers for both off shore and on shore (Atwater & Klass, 2007). In other words it can be said that declining skills are directly associated with climbing labour costs in organizations and firms. According to Atwater & Klass, (2007), skill shortage impacts businesses directly by ways of relocation of existing business processes like manufacturing, production and services from one region or country to another. This might include outsourcing or even subcontracting within the same country or shifting business practices from one nation to another. Although firms might gain from the phenomenon in the way of availing of skilled personnel at lower prices, however, it involves great structural losses. The wide range of educational requirements along with the severity associated with the search costs happen to be so high that researchers have not yet been able to draw a conclusion as to whether hiring off shore skills is an option optimum for adopting (Atwater & Klass, 2007). Although organizations and industries today are in different stages of off-shoring their jobs and functional activities, Atwater & Klass, (2007) are of the opinion that organizations maintaining the view that availability of labour is a local issue are likely to face serious competitive disadvantage as compared to those who consider looking at labour as a global market (Atwater & Klass, 2007). Main considerations in designing jobs for organizations facing labour market shortages According to a research conducted by McKinsey Global Institute states that the looming shortage of local talents have been having serious implications for the nation’s multinationals by triggering the process of organizations recruiting offshore skills (Farrell & Grant, 2005, p.1). Not only does it affects the organizations but is crucial for growth of the economy on the whole. It has been posing the greatest obstacle towards accelerated growth of most of the developing nations in the world (Pauw, Oosthiuzen & Westhuizen, 2006, p.14). This talent crunch needs to be addressed both by organization as well as the nation together. Organizations are required to work in collaboration with the educational institutes regarding their exact skill requirements associated with the job designs. While developing the job designs they need to be aware of the availability of the job specific skills in the economy. Institutions are required to have a clear idea about the skill demands in organizations. Skill shortage has been most prominently felt in the IT industry. According to the study conducted by Professor Matloff (Cappelli, 2000, p.16), IT employers have been increasingly focussing on their searches to find the best applicants. It is suggested employers must modify their recruitment drives in order to finds the right kind of talents in the organization. Employers are found to extremely choosy while selecting their candidates. This is because of the fact that the starting salaries for the technical jobs happen to be so high that employers expect high levels of performance right from the beginning of his job which is why they look for the best candidates. Research conducted on the performance difference among programmers has revealed that the best programmer in an organization performance ten times better than the worst one in the same. Research also reveals that employers are keen to hire more of the best workers than they can possibly find. In other words it can be said that employers are willing to purchase less in availability at any given price (Cappelli, 2000, p.16). Thus the problem of shortage exists even after production of skilled talents. In order to curtail the problem it is suggested that employers become less choosy and rather employ different management techniques for motivating employees to perform better at their jobs. If employees are given the proper work environment and conditions of work, an average worker’s performance could be enhanced considerably as compared to other conditions. Research was conducted by the Department of Rural Health in Australia to highlight on the different ways of tackling the skill shortage problems in the country (Kilpatrick, John & Routley, 2007, p.1). In response to the problems of skill shortage organizations researchers recommend that organizations could implement workforce redesigning and incorporate new training modules in order to fill in the gaps existing on account of skill shortages. The first area of redesign would be to provide career pathways for the existing employees and workers. Instead of keeping the positions vacant in search for the right talent, organizations could provide existing employees on the new skills required for the vacant positions (Kilpatrick, John & Routley, 2007, p.9). In addition to the results also suggested that there should be greater mobility among positions and roles along with the multi disciplinary and team based approaches on organizations. Another strategy would be create different job roles and job designs in alignment with the skills that were existing in the market in order to absorb available talents in the industry. Researchers have also put forth the fact that different job characteristics attract genders disproportionately. In other words the certain occupations appear more attractive for the female population while certain jobs are found to be more appropriate for the males. The following tables would reveal the percentage of males and females in different streams in Ryerson University. Figure 1: Gender distribution in Ryerson University (Source: Cukier, Shortt & Devine, 2001, p.5) The following table also depicts the unequal distribution of males and females in the health sector. Figure 2: Distribution of male and female employees of 45 years in health occupations (Source: Kilpatrick, John & Routley, 2007, p.5) Considering the above figures organizations could develop job designs accordingly. For example it is seen that the proportion of females in the information and technology sector is quite high which suggests that organizations could allocate positions for females belonging to the sector. On the other hand it would be useless and inappropriate to allocate more number of vacant positions for females in positions of Electrical Engineering and Applied Computer Science (Cukier, Shortt & Devine, 2001, p.5). The above data calls for targeted recruitment by organizations as well as customized training and employment approaches for the different genders according to their career choices and preferences. Dychtwald, Erickson, & Morison, (2006), have identified the transformation of the workforce as one of the main factors behind skill shortage. The industry has been demonstrating change in its structure with increasing number of candidates from the various generations like Baby Boomers, Gen X and Gen Y. Very few organizations had really prepared themselves for this transformation which in why they suffered from acute shortage of skills. Thus it is important for organizations to realize the trend that greater demand would generate to replace the older workers with newer ones. The long term HR strategies, like recruitment and retention strategies, compensation strategies etc would have to be aligned with this new trend in the workforce. One of the effective ways of handling skill shortage confronted in organizations would be to redesign its compensation packages. Thus it is recommended that organizations could redesign their compensation packages in order to attract and retain the right kind of talents amongst the existing problem of skill shortage in the economy. Research conducted by Kashiwagi & Massner (n.d.), reveals that skill shortage occurs primarily due to poor pay, inadequate career incentives and lack of formal training in organizations. The research was mainly conducted to highlight the environment required for increasing the number of employees in organizations with primary emphasis on the constructions industry and the reasons on account of which the sector was confronting with skill shortage. One way of combating the problem would be to compensate the rare skills in the industry with higher and favourable compensation packages while the adequate skills could be paid lower compensation packages. In order to attract the rare skills, candidates would be have to provided with attractive compensation packages so that they would forgo other barriers like relocation problems, family problems etc and be driven by the favourable compensation packages. In it seen that employees keep from taking up jobs which requires them to move from their hometowns or relocate or encounter certain other problems which would be uneconomical for them. This is one of the problems encountered by organizations as they are not able to attract that talent just because it exists in another state or region. However, this problem could be tackled to some extent by redesigning compensation packages making it more favourable for the employee. In such a position it would be economical for the employees to shift to a different location at a salary which would be substantially higher than his existing salary. This could be one of the possible alternatives before organizations facing with skill shortage problems (Kashiwagi & Massner, n.d., p.2). One of the areas on concern in organizations is the coming shortage in the near future that they would be confronted with. Researchers are of the opinion that demographic developments, economic developments and globalization would be some of the reasons to create considerable gap between the demand and supply of labour in the markets. They apprehend these phenomenons would widen the gap which already exists in the economy. However, advocates of training and development have felt that organizations could benefit from this demand and supply discrepancy in the form of gaining greater national support in terms of increased spending on training and developmental activities which would consequently benefit the workers (Coetzee, 2007, p.5). Another area of concern in organizations arise out of the fact that public organizations often indulge in discrimination criterion in which certain number of seats are allocated for people belonging to particular castes or sections of society. In such a condition they are likely to feel labour shortage or lack of skilled labour for the jobs. A major responsibility of the HR departments in organizations would be to hire candidates according to skill requirements and ensure that the organization had adequate skills to perform the jobs effectively. The motive must be to ensure skill adequacy rather than manpower adequacy in the organization. However the functions of each employee are not mutually exclusive and interdependent on one another. According to Davis (1984) a market driven culture is one which supports functionally coordinated actions which are directed towards the attainment of competitive advantage. The success of the department lies in its abilities to analyse its present capabilities, anticipate its future capabilities and then devise strategies to meet them successfully (Day, 2009, p.8). Conclusion With the advancement of technology, economic development and globalizations organizations have been confronted with labour shortage in almost all nations. Economies demonstrating high rates of unemployment have also shown skill shortage at the same time. This is on account of the misalignment of skill availability and skill demand in the economies. Researchers have opined that skill shortage is directly related with rising costs in organizations which need to be handled with prime importance. The problem has been alarmingly growing in organizations and need to be handled with care. Researchers have also put forth some of the strategies for handling the crisis. For example organizations facing the crisis can look for the requisite skills from other nations or regions if skill availability in the locality is inadequate. Additionally, instead of waiting for the right and the best candidate for filling up vacancies they must strive to develop the skills of the available resources through training and developmental activities. Also recruitments must be done according to skill requirement rather than manpower requirements. Discrimination among candidates poses serious barriers in recruiting the right skills and must be prohibited under all circumstances. Finally, it is recommended that HR departments in organizations must design jobs requirements according to skill availability in order to ensure that resources are properly utilised to meet organizational requirements. Reference Atwater, D. M. & Klass, H. (2007). How will the predicted U.S. labor shortage impact your business?. Volume 10 Issue 1. [Pdf]. Available at: http://gbr.pepperdine.edu/2010/08/what-you-need-to-know-about-labor-shortages/. [Accessed on September 08, 2011]. Cappelli, P. (2000). Is There A Shortage of Information Technology Workers?. Managing the Market-Driven Workforce. Boston: Harvard Business School Press, 1999. [Pdf]. Available at: http://knowledge.wharton.upenn.edu/papers/979.pdf. [Accessed on September 08, 2011]. Coetzee, M. (2007). Practising education, training and development in South African organisations. Juta and Company Ltd. Cukier, W., Shortt, D. & Devine, I. (2001). Gender and Information Technology: Implications of Definitions. Journal of Information Systems Education, Vol 13(1). [Pdf]. Available at: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.87.548&rep=rep1&type=pdf. [Accessed on September 08, 2011]. Day, G. S. (2009). The Capabilities of Market-Driven Organizations. The Journal of Marketing, Vol. 58, No. 4 (Oct., 1994), pp. 37-52. American Marketing Association. [Pdf]. Available at: http://pcbfaculty.ou.edu/classfiles/MKT6293/WK5_RBV/JM%2094%20Day.pdf. [Accessed on September 09, 2011]. Dychtwald, K., Erickson, T. J. & Morison, R. (2006). Workforce crisis: how to beat the coming shortage of skills and talent. Harvard Business Press. Farrell, D. & Grant, A. J. (2005). China’s Looming talent shortage. The McKinsey Quarterly 2005. [Pdf]. Available at: http://public.tjufe.edu.cn/department/jingjiguanli/researchcenter/gonggong/source/%E6%9D%83%E5%A8%81%E6%8A%A5%E5%91%8A/%E4%B8%AD%E5%9B%BD%E5%A4%A7%E5%AD%A6%E6%AF%95%E4%B8%9A%E7%94%9F.pdf. [Accessed on September 08, 2011]. Kashiwagi, D. T. & Massner, S. (No Date). Solving the Construction Craftperson Skill Shortage Problem Through Construction Undergraduate and Graduate Education. Arizona State University. [Pdf]. Available at: http://www.ascjournal.ascweb.org/journal/2005/no1/89-101_Kashiwagi.pdf. [Accessed on September 08, 2011]. Kilpatrick, S. I., John, S. S. & Routley, G. (2007). Skill shortages in health: innovative solutions using vocational education and training. The International Electronic journal of Rural and Remote Health Research, Education Practice and Policy. [Pdf]. Available at: http://eprints.utas.edu.au/1349/1/article_print_623.pdf. [Accessed on September 08, 2011]. Pauw, K., Oosthiuzen, M. & Westhuizen, C. V. D. (2006). Graduate Unemployment in the Face of Skills Shortages: A Labour Market Paradox. South African Journal of Economics. Volume 76, Issue 1, pages 45–57, March 2008. [Pdf]. Available at: http://www.commerce.uct.ac.za/research_units/dpru/WorkingPapers/PDF_Files/WP_06-114.pdf. [Accessed on September 08, 2011]. Bibliography Bratton, J. & Gold, J. (2001). Human resource management: theory and practice. Routledge. Fomburn, J. C., Tichy, M. N. & Devanna, A. M. (1984). Strategic human resource management. John Wiley & Sons Ltd. Ivancevich, J. M. (2008). Human Resource Management 10E. Tata McGraw-Hill Education. Neugart, M. & Schomann, K. (2002). Forecasting labour markets in OECD countries: measuring and tackling mismatches. Edward Elgar Publishing. Read More