HRD Function in Manufacturing and Services Sectors: A Comparison
The previous articles discussed the role of the HRD function from a wide variety of perspectives. We have seen how the HRD function is pivotal to the success of contemporary organizations. This article compares the HRD function with regards to its relevance and operation in the manufacturing and service sectors. Before launching into the salient […]
The Challenges of Managing Attrition in Contemporary Organizations
The Reasons for Attrition In recent months, there has been a spate of news items about how attrition is taking its toll on many organizations in Asia and especially in the IT sector in India. Whereas in the west, because of the recession and the gloomy economic conditions, attrition is no longer an issue and […]
Benefits of Talent Management
Talent management can be a discipline as big as the HR function itself or a small bunch of initiatives aimed at people and organization development. Different organizations utilize talent management for their benefits. This is as per the size of the organization and their belief in the practice. It could just include a simple interview […]
The Rise of the Knowledge Worker
Who is a Knowledge Worker ? A knowledge worker is one who uses knowledge as the capital for work and who uses brain power rather than brawn power to get the job done. In other words, knowledge workers “think for a living”. A knowledge worker is also one who uses creative thinking, out of the […]
Policies on Hiring Couples and Relocation Assistance
Recent studies have shown that many employees are less willing to accept relocation offers from their employers. The most important factor related to their willingness to relocate is their spouse’s willingness. Couples prefer working in the same city once they get married and in rarest of the rare cases they are willing to move. It […]
The present times are characterized by an oversupply of everything related to the job market and the presence of so much capital at the disposal of companies. On the other hand, the physical resources needed like oil, gas, minerals, and water are in short supply. This means that a paradox is created where there are more people than resources and more capital than avenues for productive investment. This “double whammy” would hit the current generation hard, as they have to contend with the paradox of too much labor and at the same time too few physical resources.
A situation where there is stagnation in the job market and inflation in the price increase is known as stagflation. While the hitherto protected and insulated economies of the west are now undergoing a painful transition to high unemployment and low growth, the Eastern world is realizing that the good times are over and hence, the return to the dizzyingly high rates of growth and plentiful employment is impossible. This is leading to a situation where the present generation is becoming frustrated and showing their anger through mass protests and strikes on just about everything that bothers them.
Oversupply of labor means that when employers advertise for jobs, there is more than hundred times the number of applicants for every vacancy. This means that job seekers have to contend with low paying jobs far lesser in pay and working style than what they had studied. Indeed, some media reports have shown that engineering graduates in India are working in grocery stores and in menial jobs that do not have any connection whatsoever with their education.
Many youth in the west as well as the east are delaying marriage, having kids in case they are married, and are generally not leaving home and staying their parents as they can save on living expenses this way. This situation is a recipe for disaster as can be seen from the events of the Arab Spring and the Occupy movement where disgruntled and disaffected youth took to protests and social disorder as a means of expressing their anger.
Further, with so few jobs and so much capital at their disposal, companies are putting off hiring and instead, deploying their liquidity in the stock market and other forms of speculation that do not result in net job creation and only serve to exist as a highly lucrative source of income.
This is the reason we see the stock markets rise even though the economy is in doldrums. This is also the reason we see the capital drifting towards speculation instead of productive employment. Further, investment needs resources that are dwindling and hence, corporates have realized it is better to speculate rather than invest in scarce resources. Even those companies that need resources are either putting off their expansion plans or lessening their output from the existing resource base.
Therefore, the paradox of oversupply of capital and labor and at the same time the dwindling resources means that there is no net value adding economic activity wherein the only growth is from the services sector that does not need any of these factors of production. This can be seen from the way in which the jobs that are being created are from the services sector where the fresh graduates are flocking to for employment.
Of course, as mentioned earlier, services can mean anything from high-end finance and IT to low end hair salons and retail stores and hence, it is important to note that fresh graduates be realistic about their chances. Instead of building castles in the air, they must have their feet firmly on the ground and hence, must apply for employment accordingly.
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