Skills Shortage and HRM - Essay Example

Furthermore, it often increases the crime rate as people resort to earning money in illegal ways due to their unemployment. Other problems like low morale in the workforce, and economic recession are also very common due to unemployment. Furthermore, it discourages people to pursue further education because they see how even the highly educated people are often forced to do jobs which are below their potential, simply due to the lack of jobs available. Thus, unemployment has a major negative effect on the economy and welfare (Beresford, pg 190, 2004).

Another difficult, however completely different, scenario occurs when the economy has plenty of jobs available in various industries, but does not have enough skilled labor to meet this demand. Whereas the people in the above mentioned situation were forced to compete with several other qualified people for the same job, this scenario describes a situation where companies are competing against each other for the same potential employee. They are forced to do this when the economy does not have an adequate supply of people with the skills which these companies require (Capelli, pg 145, 2005).

PROBLEM WITH THIS SHORTAGE A shortage of skilled labor as described above usually pertains to fields which require high level skills, such as those needed for the technological industries. These industries are ever changing and developing, and thus require the workers to have updated and relevant skills. Such a feat can only be accomplished by regularly training these workers, which requires time and money. Sometimes, workers with such updated skills are not available for the companies to fill their vacancies.

This causes severe problems, because then the company has to divert substantial resources to recruitment, which costs them heavily to get new employees; whereas new employees are supposed to be making more money for them, not costing them their funds. This causes problems for the companies, and thus it is necessary for them to determine some cost effective recruitment strategies (Goss, pg 232, 1994). POSSIBLE RECRUITMENT STRATEGIES One way of employing such cost-effective recruitment methods is to pay attention to factors which will attract employees as well as motivate them to keep working.

These include the fringe benefits, bonuses, promotions, training programs and compensation rates that these companies offer the employees. The management style, reputation and size of the company are also very important factors in this regard. Different factors have a different level of importance for employees. Some may prefer a job which pays them a high salary, while others may be attracted to large companies with good reputations in the industry. Thus, these companies need to account for these individual differences when recruiting employees (Capelli, pg 146, 2005).

Not every company can afford to offer the potential employees being recruited all the above benefits. In fact, some companies may face severe difficulties in recruiting new people due to such limited resources. If they exist in an economy which has a very limited supply of employees who possess the skills needed, they face major problems when trying to recruit such employees. Since they do not have all the resources other companies may be able to offer employees, they will not be the preferred choice of employers for