The paper would revolve around the discussion done over the concern regarding the rising wages of labor along with the decline in the supply of labor from China, which was previously considered to be the hub of labors from where the labor was supplied to other countries at a cheaper cost. Let’s discuss this issue in detail along with the explanation regarding the measures being taken by the organizations to change their human resource strategies.
Answer – 1 Competing on the basis of labor costs can generate both positive and as well as negative outcomes for a company, or country. Talking about the brighter side, companies these days strive to achieve the optimum profitability level in order to stay in the competition. Therefore, what they do is to hire employees on part-time basis where employees would be paid on the basis of work they would do along with the working hours. This usually happens when the companies start a new venture such as, product development, its launching, or promotion.
It does save huge costs for the company, but the turnover rate rises drastically. Talking about the negative side of the picture, either it is the company or country; it would result in a high turnover rate that often increases the costs such as, training costs. It is because when employees are hired by the companies, they must be trained about the job description that they are held responsible of. Therefore, investments are made by either sending them abroad or arranging workshops or training sessions.
Obviously, when employees don’t get enough pay, they would leave their jobs; moreover, the supply of labor within the country would get minimized because workers might leave their country and go abroad to work for MNCs. Answer – 2 There is absolutely no doubt that many organizations consider their workforce as a main asset since the utilization of resources depend on their skills and abilities. Employees often demand the companies to value them, give them some autonomy, and involve them in the key managerial decisions where they can suggest new ideas.
Companies, in order to keep their employees satisfied, introduce certain compensation packages and training sessions so that the employees think of themselves as part of the organization and get motivated. When managers invest over the training sessions and involve their subordinates in the key decisions, it becomes necessary for them to retain them at any cost or else they would leave their jobs. This would result in the loss of intellectual capital and loss of investment that was made to groom them by polishing their skills.
As compared to the costs that incur for training the employees, the cost of labor force is much more than that. The reason is that when employees are trained and are retained by the company, it benefits the company not only in the short-run, but also in the long-run. Whereas on the flipside, when those skillful employees leave the company the labor costs take a domino effect because the firm would lose those employees, the investment made on them, and would have to recruit others, and then train them again.
Consequently, these companies must focus on retention of employees, and that can be done by offering them attractive compensation packages, further training, giving autonomy, and promotion. Answer – 3 Companies these days are really focusing on reshaping their human resource strategies and forming them in such a way that not only keeps the employees contented, but also benefit the overall organization. There are several ways adopted by the firms these days and are explained below.
Organizations these days encourage and support the presence of collectivist attitude. Collectivists define themselves by their group membership, give group goals priority over their personal goals, put more emphasis on harmonious relationships and experience more socially based emotions” (Robbins & Judge, 2007) Moreover, individual rights is are also emphasized, that is to ensure the freedom of movement, physical security, and freedom of speech. Emphases are laid on the presence of health and safety and ensure the condemnation of actions or choices that are not safe for people, actions that violate law and ethical principles.
Equal employment opportunities are ensured where they hire individuals based on their intellect, creativity, enthusiasm and the presence of Emotional Intelligence. In working structure, they value team relationship, team work, and team achievements; moreover, their employees value the importance of effective communication and employee involvement while making certain decisions and delegating the tasks. There ratio of discrimination seems to be getting lessened; everyone is given equal opportunities and there is no glass ceiling for females or people from different backgrounds.
When it comes to improving and retaining the skills of employees, many organizations rely on the concept of Employability, i. e. – to continuously improve the employee’s working skills by the time to meet the requirements – (Daft, 1997). Answer – 4 Since the competition for workers in China is heating up where high wages are demanded by them and at the same time, companies seek to cut their redundant costs, especially from payrolls; therefore, employers would definitely shape some of the terms and conditions regarding the working conditions, job type, compensation, working hours, and job security.
First of all, since the supply of well-educated and skillful workers is less in China, so firms would have to recruit those who are available even if they are demanding high wages. Of Among these workers, many of them come from abroad to find best possible job opportunity. Another change that can be made is in the working hours, where companies can decide the job type, job status, and working hours of a worker before recruiting him or her.
In this case, a contract would be signed between the worker and the company in which all the responsibilities and liabilities of both of them would be outlined, along with the penalties that either party would have to pay in case of violating the contract. A very enticing strategy that can be brought on is to introduce the Performance-based compensation play, where the employees whether they are contractual or regular, would be paid on the basis of their performance and productivity level.
Moreover, chances of promotion would only be for those who perform well and benefit the organization. This would result in provoking the motivation among the employees to gain more knowledge and skills, perform better, and abide by the rules and regulations. Not only this, the turnover rate that China is currently facing, would decline to a great extent and would attract the best available talent, which would be beneficial for both the employees and the business.