The Drivers of Globalization: Friedmans Flatteners
The famous author and cheerleader for globalization, Thomas Friedman, in his book The World is Flat identified some key drivers of globalization. He called these factors the flatteners to denote the premise of the book that these factors were responsible for the flattening of the world. In other words, globalization has ensured that all countries […]
Business Strategies to Beat the Downturn
Introduction: The Effect of the Downturn and How Companies Can Cope The ongoing global economic crisis has impacted most of the companies in the world as they have to not only reckon with falling sales, stagnating demand, oversupply, and inflation all at the same time mean that businesses are operating in “chaotic” and “uncertain” environments. […]
Methods of Improving Organizational Knowledge
Knowledge is the new lubricant that runs the world economy. We live in what Alvin Toffler called the “Third Wave Society”. A society built around the new and emerging paradigm around knowledge as the new capital. The information technology and related industries function on the basis of knowledge as the medium of input and output. […]
Total Quality Management Models
Total Quality Management is a combined effort of both top level management as well as employees of an organization to formulate effective strategies and policies to deliver high quality products which not only meet but also exceed customer satisfaction. Total Quality management enables employees to focus on quality than quantity and strive hard to excel […]
Kurt Lewin’s Change Management Model: The Planned Approach to Organizational Change
Kurt Lewin’s Three Stages model or the Planned Approach to Organizational is one of the cornerstone models which is relevant in the present scenario even. Lewin, a social scientist and a physicist, during early 1950s propounded a simple framework for understanding the process of organizational change known as the Three-Stage Theory which he referred as […]
Management students and professionals alike should know the importance of employment statistics and numbers and must also know how to interpret such reports. Indeed, based on employment statistics and numbers, several important business decisions such as when to enter a particular market or how to base such entry strategies need to be made.
Given this aspect, it is also important to note that employment statistics and numbers usually mask deeper trends and hence, one must not only know how to read such reports but also know how to extrapolate such numbers and translate them into actionable information based on which several important business decisions can be made.
It needs to be remembered that the raw data that is presented in the employment statistics and numbers can be transformed and translated into useful information that can then be used to base business decisions.
To start with, it is important to note that employment statistics for the formal and informal sectors are two different aspects. For instance, the formal sector employment figures are relatively straightforward as most of the information and the data pertaining to formal sector employment come from the firms in the sector where anyway employee information is present in official statistics.
In other words, the formal sector maintains accurate and reliable data about the number of employees and other such information. However, this is not the case with informal sector data wherein employee information and data is usually sketchy and not reliable.
After all, one cannot expect a shop or a small scale outfit to have accurate information and data about their employees as most of the employees are usually hired on an ad hoc basis without any social security benefits or even fixed salaries and other perks.
Thus, managers and management professionals and students need to understand that informal sector figures for employment must be interpreted after proper due diligence has been done.
This can take the form of reading the seasonal figures as well as the flux and the flow of employment figures for a specific period as well as for rolling averages. In this manner, it would then be easy to interpret such figures and make sense of how much the informal sector is hiring and growing.
After the distinctions between the formal and informal sector, it is also important to note that unlike advanced Western countries, developing countries such as India and China are yet to develop a reliable and accurate method for reporting employment statistics.
Indeed, of these two countries, India is known to have a very basic and rudimentary system for employment data collection and reporting. Though the Indian Government has started to devise a more robust system for such data collection and reporting, it is highly likely that it would take a few years before employment statistics and numbers in India would be anywhere near Western standards.
This is the reason why most businesses in India often go by the private surveys and research institutions reports on employment rather than rely on the official figures. This is also the reason why Indian firms and decision makers in them often look for other measures such as seasonal rise and fall of employment and provident fund records to base their decisions.
It is also the case that Western countries and their employment figures are also not as straightforward as they seem. For instance, the United States has several categories for reporting employment data wherein the BLS or the Bureau of Labor Standards which is the Governmental Agency for reporting such data often presents the employment figures under several heads.
To take an example, the unemployment figures are reported based on the number of people filing for unemployment assistance and other aspects such as those who report their status as not being employed in a specific firm.
However, this masks a deeper reality as the number of workers who have stopped looking for work completely is not captured fully since such figures do not come up either in the employed or unemployed categories.
In other words, workers who have stopped looking for work are neither captured as employed or unemployed since they simply drop out of the official statistics.
This is the reason why decision makers in the United States often rely on figures for unemployment assistance as well as average numbers of jobs created as a way of estimating the employment percentages.
With the rise of the Gig Economy or the Freelance Economy, there is a need to capture those freelancers and part timers who do not come up in either the full time employed or unemployed categories.
In other words, freelancers typically do not report themselves as fully employed or unemployed since the nature of their work is such that they do not fall into these categories.
This is the reason why many Economists in the United States are calling for a changed system of employment statistics to be more in tune with the needs of the emerging Gig Economy. Thus, as the discussion so far showed, employment statistics need to be understood and interpreted carefully if one has to make sense of them.
Moreover, with structural changes in the Economy, there is not a straight method by which employment numbers can be collected and reported. To conclude, management students and professionals alike need to understand that interpreting employment statistics needs some effort which is by no means that difficult provided one knows where to look and analyze.
Your email address will not be published. Required fields are marked *
