Labor Market Trends in the UK
My organization is based in the UK and Saudi Arabia. In the UK, the labor market enjoys a stable job growth and a steady supply of skilled EU workers. The UK is part of the EU and G8, which directly makes the local labor market attractive to local and foreign skilled workers. With the favorable economic status, the market is playing a key role in the globalized business world. The unemployment rate in the UK currently stands at 5.6 percent, which shows it has a relatively low unemployment rate in Europe. The success of the market is, partly, due to effective labor legislation (Immigration Expert, n. d.); Expatica, n. d.). The labor market trend in Saudi Arabia also influences the globalized world as the country provides an international market. Currently, the local labor market is made up of 30-percent immigrants. Enactment of new laws or amendments affect the operations the immigrants and their families as well. High levels of unemployment, however, adversely affect the country. The current unemployment rate is about 13 percent. Economists consider that structural problems including intense competition from the poorly paid workers are responsible for the increase in the rate of unemployment (Alhamad, 2014). The government has intervened by passing Saudization laws to ensure the private sector trains and employs more locals.
Tight and loose labor market conditions influence the economy in a number of ways. In tight labor markets, an economy suffers from the shortage of skills and knowledge. The UK market may soon be a tight one as its unemployment rate is low, and it requires the support of skilled foreigners (Heywood & Peoples, 2006; Gonzalez, 2008). Saudi Arabia’s market, on the other hand, is a loose labor market as it has a surplus of skills and knowledge.
The levels of unemployment have influenced the enactment of laws that favor the respective countries. The UK’s Equality Act 2010 and the Employment Rights Act 1996; for example, safeguard the rights of people to equal employment opportunities (Shah, 2015; Landry & Duran, 2012)). Saudi Arabia, on the other hand, has passed a series of laws those strict private organizations to employ more citizens. The inequalities in wage levels help Saudi Arabia to achieve the objective. The UK, on the other hand, relies on the equalities act to ensure equitable pay.
The public and private sectors are different, and that ensures labor market laws in these sectors are unique. The public sector pays great attention to serving the interest of the citizens while the private sector focuses on creating markets to earn profits. Besides, a shorter hiring process may be acceptable in the private sector. Managers in these sectors can also fire employees whenever they consider it appropriate to do so. However, in the public sector, a longer hiring process is involved, and firing is often based on different factors and time frames (Lienert, 2009; Stiglitz, 2000). Further, the procurement process is often clearer in public organizations than the private sector. Public organizations also often face outstanding accountability but cannot choose their goals, unlike private organizations that are accountable primarily to their board of directors and shareholders and can work with these stakeholders to choose their organization’s goals.
Labor Market Trends in Saudi Arabia
Countries also choose the right types of employment contracts depending on their needs. In the UK, for example, the most common contracts are full and part time, agency staff, and freelance contracts (Gov, n.d.).. In Saudi Arabia, the leading employment terms are full-term employment, part-time employment, temporary, and special contracts. In the country’s private sector, the most common terms are fixed term and unlimited term contract (Government, n.d.).
The UK market and Saudi Arabia are some of the leading labor markets given the exceptionally high interest of international businesses such as ours in the regions, and the organizations use several ways to position themselves strategically in the markets. The first strategy is training their staff to offer the right products and services in culturally sensitive ways (Shoult, 2002; Clarke & Morgan, 2007). That ensures the organizations know the needs of the international market and meets them. Besides, they used several appropriate market entry strategies including franchising, which is critical for organizations that have a weak brand identity. They also ensure to offer competitive remuneration. Competitive pay helps them to attract qualified personnel as they need to take care of the local cost of living and tax rates. As such, the organizations train their staff, use the right market entry strategies, and offer competitive wages.
The Saudi government has a special role to play to ensure future job skills are met. According to the country’s strategy for economic and social development report, the government underscores that it has a responsibility to support the creation of sustainable jobs in the private sector (Rivlin, 2009). The private sector has the ability to offer the types of jobs that the locations consider attractive but needs government support to achieve this goal. One of the best ways to realize this is enforced labor laws and establish the required employee right workplace standards. Another strategy is attracting women to the workplace by reducing barriers that are often on their way and reduce the cost of employing them, making the workplace friendly to women. By creating the jobs, the locals consider attractive and supporting more women to join the workforce, the country is increasing the number of people who can serve the country and contribute to its economic growth.
The government’s other role is to educate youths and women and guide them to make educated career decisions. These individuals often fail to acquire the right skills due to lack of education or poor career choices (Wilson, 2004). Another solution to the unemployment problem is funding apprenticeships. Through on-the-job training, a new generation of practitioners can get the education required to the licenses required to practice in certain regulated professions. The government needs to partner with private companies and no-profit organizations to offer the service. This way, the country will be able to empower many locals to join the workplace.
Different Labor Market Conditions and Their Influence on the Economy
The government also has the duty to expand labor protection. The government should protect wages and protects workers against exploitation. In this way, many of them would be encouraged to acquire the skills to join the local workplace.
In addition, the government should align labor market needs with the education system. The imbalances between workforce needs and education qualifications make it unnecessary to acquire the skills (Wilson, 2004). The government should solve this issue so as to encourage students to go to institutions of higher learning to be empowered to serve the people of Saudi Arabia.
Employers also have a duty to ensure future skills needs are met. They need to collaborate with the government and none profits to train their current workers. Besides, they need to respect the law and pay competitive packages to attract more citizens to the local labor market (Wilson, 2004). When employers train the workforce, obey the law, and offer attractive rewards, they make the workplace attractive and more locals will be willing to acquire the skills needed in the market.
Workplace representatives in Saudi Arabia also have a central role to play to ensure the skills are met. They need to work closely with the lawmakers to protect the rights of workers (Wilson, 2004). In addition, they can educate workers on their rights. The cooperation and education of workers are necessary for empowering employees to pursue the rights to be equipped with the most relevant skills.
In the UK, trade unions exist and perform several duties to protect and advance the rights of workers. These organizations achieve this objective by negotiating agreements on employment conditions and terms with employers, addressing the concerns of their members on matters such as possible redundancy, and offering the workers moral support when attending disciplinary and grievance meetings (Striking Women, n.d.). In addition, whenever necessary, trade unions in the UK provide workers who are their members with financial and legal support.
Workforce planning helps to ensure the present and future skills needs are met. Organizations cannot meet these needs if they fail to plan (Moore, 2012). However, for efficient planning, they must make use of several principles.
One of the main principles of effective planning is setting strategy. The principles involve laying out a plan through which the organization intends to achieve its staffing objectives (Moore 2012). From the strategy, the organization is able to define the best steps of action.
Labor Market Laws and Regulations in the UK and Saudi Arabia
The next principle is key stakeholder involvement. An organization that wants to effectively plan its workforce must involve all its key stakeholders. The entire planning and implementation process require teamwork (Moore, 2012). One way to promote teamwork is to embrace this principle from the strategy setting stage.
The other critical step involves determining key skills and competencies. According to Dahlenburg, Crossley, & Pejovic (2005), an adequate knowledge of the skills and competencies that a country or nation requires to meet its workforce needs is required to develop a viable workforce plan. Without the information, the entire planning process cannot produce any useful results.
Span and gap analysis is another core principle of workforce planning. It involves identifying the desired future state of the workforce and its present state and then developing long and short-term strategies that would help achieve the objectives. The analysis identifies any deficiencies that the organization needs to overcome.
Organizations need also to use the most efficient work planning tools to be able to realize their goals. One of these tools is defining the direction of the workforce (Dahlenburg et al., 2005). The tool refers to setting the direction and communicating the plan organization-wide. This process may involve reviewing performance requirements as well as identifying the core skills and competencies that the organization requires.
Another tool is modeling the current workforce. Organizations that use this tool ensure they understand capabilities of workers and workforce distribution and use that to project a new workforce plan (Dahlenburg et al., 2005). The tool helps to develop strategies that are helpful for closing the gap.
Environment scanning is also another major tool for organizations are affected by external and internal factors (Dahlenburg et al., 2005) This tool helps to review the social, technological, political, demographic, and economic trends in the environment.
Another essential tool is organizational benchmarking with competitors. The benchmarking ensures that organization is in the right direction based on industry standards. An organization can assume it is on the right track yet it is performing poorly if it fails to use this tool.
The human resource department ensures their organizations have the required number of employees, and plays a special role in developing basic succession planning process. Though the department is not often responsible for the initiation or creation of the plan, it is in charge of much of the implementation process (Noe, 2013). The HR department works closely with the top management to hire qualified individuals for all position. By doing this, the department maintains a pool of workers who are potential succession candidates. Further, the HR department develops assessment programs that provide quality feedback to workers and employers. The employers can use the feedback to track workers’ performance, which helps to determine who can raise the leadership leader and when that should happen. The department also acts as a catalyst and therefore ensures the appropriate supervisors deliver the assessments at the right time and in the right manner. At the same time, HR assists to mature succession candidates. The department does this by helping to plan training programs that equipped the targeted candidates for the roles ahead. HR also evaluates and recommends the right compensation to ensure workers are being competitively rewarded, which ultimately helps to retain many potential succession candidates. Besides, it reviews and develops employee retention programs, which also helps to ensure the organization retains the brightest and most effective candidates. Moreover, the HR department develops reporting mechanisms that its uses to update senior management and the board on the progress of individual candidates. The human response department is, therefore, critical in driving succession plans in organizations.
Public and Private Sectors in Labor Market
The human resource department also advises the top management and board on career development options. The department understands the skill requirements and when necessary can guide their organizations on matters pertaining to job enrichment, mentoring, rotation, training assignment, and coaching to help equip employees for organizational future skill needs (Noe, 2013).
In addition, HR contributes to plans to downsize organizations. The department communicates with the operations, sales and marketing, and other departments to know the required labor force (Noe, 2013). If the organization cannot ensure equity and fairness due to its size, the department can recommend downsizing. As such, HR can provide leadership when size is the main problem hindering their organization’s success.
In addition, HR contributes to the development of job descriptions. Gilley, Eggland, & Gilley (2002) provides that the department understands the required person specifications, competency frameworks, labor laws and best practices, and relies on that knowledge to advise and support their managers when making decisions on recruitment.
Organizations must make recruitment decisions that accord with the relevant laws. Some of the main legal provisions regard minimum wage, gender equality, and work conditions requirements. The UK’s Equality Act (2010) is an example of a legal provision that safeguards the interests of employers and employees (Selmi, 2013). The law, in particular, safeguards the rights of youths, disabled persons, married people or those in civil partnerships, and pregnant or nursing mothers. Besides, guards against racism, gender discrimination, and vices relating to sexual orientation. The Data Protection Act (1998) ensures the data of employees remain secure in the hands of the employer only.
Employers use various recruitment and selection methods despite that all of them have certain weaknesses. Some of them choose to advertise in the mass media while others recruitment agencies (Edenborough, 2007). The former option reaches out to many potential employees and, therefore, increases the chances of hiring the brightest individuals. However, if the organization does not draft an appealing advert, it might not attract the right candidates as the work of the media does not include offering guidance on how to drafts adverts. Besides, some media houses charge exorbitant amounts of money, which small businesses cannot afford. Recruitment agencies, on the other hand, are highly reliable and cheaper since organizations pay them only after they succeed to get the right candidates. Besides, payment is often based on the nature of support required (Edenborough, 2007). The agencies also offer technical support on the best ways to attract qualified candidates, and in most cases, they take over the task of looking for the candidates. If need be, the agencies interview and train the right candidates on behalf of their clients. However, it can hardly attract as many potential candidates as the media. Some of the agencies also lack the skills required to select the right candidates. As such, organizations must choose the best methods depending on their respective needs and budgets.
Different Types of Employment Contracts in the UK and Saudi Arabia
Other than the recruitment and selection costs, organizations are often forced to bear costs related to employee turnover as there are many possible reasons employees leave organizations. Some employees resign when they attracted to new jobs (Edenborough, 2007). On another occasion, they are forced out of their current jobs due to dissatisfaction as a result of issues such as lack of training and personal development and career opportunities. If, for example, an employee learns he or she is not competent to handle the task at hand, the most practical solution can be to resign. A combination of these two factors sometimes also leads to their resignation. However, when employees are empowered to do their work, are paid competitively, and are treated fairly by their line managers, they are more likely to stay for a long period.
Several costs are associated with dysfunctional employee turnover. For example, the advertising costs for replacement, recruitment and selections costs, and training and induction costs are high (Michel, 2009). The ultimate cost could be business closure as the amount of money required to equip new employees frequently could be beyond the organization’s financial strength.
Organizations should use the most appropriate approaches to retain workers, but they should appreciate that these approaches have both strengths and weaknesses. Financial benefit is useful for retaining workers as all workers expect competitive pay. In addition, high pay has the potential to motivate employees instantly (Michel, 2009; Woodhouse, 2006). However, the motivation often does not last for a long period. As a result, financial benefits alone cannot be a reliable way to retain workers. Organizations can also use flexible working hours. Employees feel valued when they are allowed to work flexibly. Nevertheless, this approach cannot be used if the organizations ignore other approaches including financial benefits. As a result, organizations should assess the exact needs of their employees and use the approaches that most appeals to them.
Organizations need to understand how they should use good and lawful practice to manage dismissal, retirement, and redundancy cases. I would advise my company that there is currently no default retirement age. The Equality Act 2010 abolished the requirement. I would also inform them that the law on redundancies, The Collective Redundancies (Amendments) Regulations 2008 repealed the 1985 Redundancies payment Act (Wadham et al., 2016). Redundancy announcements often have adverse effects on morale, motivation, and productivity. I would want my managers to know that the new law requires employers to allow their workers an opportunity to consult and identify suitable alternative employment. Organizations that have between one to 20 employees have no obligation to consult, but it is good practice to do so. As such, my organization should, whenever possible, consult. I would also bring to their attention that employers with 21 to 99 employees are required to allow a 30 days consultation period. One hundred-99 employee needs 45 days consultation period. However, the two parties have a right to agree to stop talking in each of these cases at any time within the stipulated time frame. The organization should remember that it is proper to operate within the law. However, strict legal compliance may not be equal to good practice. As a result, they should always endeavor to reach mutual agreements so as to satisfy the needs of both parties by promoting the observance of ‘good’ practice.
Strategic Positioning in the Labor Markets of the UK and Saudi Arabia
Additionally, I would advise them on dismissal. The Employment Rights Acts 1996 deals with this matter and require employment tribunals to focus on fairness and justification. The tribunals have to ensure that dismissing employees is the last resort (Stiglitz & Rosengard, 2015). Besides, it is the duty of employers to never without any unreasonable delay investigate allegations against employees to establish the facts. Further, employers are required to use a fair and consistent procedure whenever dismissing any worker. Before taking any action, the employer and employee should hold a meeting to establish the facts. If at the end of the investigation the employee is dismissed unfairly, the employee has a right to challenge that before a competent tribunal.
I would also advise my managers to know the consequences of dismissal. For employees who had been in employment before April 6, 2012, they should get one year’s service. For those who started employment on or after this date, they qualify for two year’s service payment. However, for employees who are dismissed on ‘automatically unfair grounds’, there is no length of service requirement (Davies, 2009). The organization should, as a result, set out the rules governing disciplinary measures in writing and ensure the employees and managers understand them and avoid paying a lot of money due to dismissal cases.
There are potentially fair reasons for dismissal, and I would want my managers to understand them. Reasons related to the conduct, capabilities, qualification for the job of the employees are potentially justified (Davies, 2009). Other fair reasons could be redundancy, statutory prohibition, and other substantial reason that could justify the dismissal.
Organizations should also know the automatically unfair reasons for dismissal so I would advise my managers on the requirements. If the employee is exercising specific rights relating to pregnancy and maternity, family reasons such as paternity and parental leave, and representation, including acting as a representative of an employee, they cannot be dismissed (Chandran, 2011). Other grounds on which an employee should never be dismissed include trade union membership, part-time and fixed-term working, and national minimum wage.
I would also advise them on unfair dismissal, which arises when there is no good reason for dismissing an employee (Chandran, 2011). When an employee is dismissed for asking for flexible working, refusing to give up working time rights or demanding for a time off jury service and is dismissed, it amounts to unfair dismissal.
The Role of the Saudi Arabian Government in Ensuring Future Job Skills are Met
List of References
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