Solution/Answer:
Labour Market Trends in the United Kingdom (UK) and Saudi Arabia (KSA)
The organisation of focus in this assessment operates in both United Kingdom (UK) and Saudi Arabia (KSA). There are differences and similarities on how the two countries implement their labour market relations. CIPD (2019a) report defined labour markets as the work environment in any country that is characterized on market indicators such as employer’s recruitment, redundancy and pay intentions. This also identify the composition of the employment in regard to demographics, the nature of the jobs (skilled, full-time and permanent) and the willingness of the employers in providing employment opportunities and attracting workforce. In order to understand the key contemporary labour market trends and their significance for workforce planning, a case of an organisation operating in two different countries (UK and KSA) has been adopted to describe on the labour market trends in the two countries.
UK
According to the statistics provided in Office for National Statistics (2020), it is evident that the UK employment rate is on its all-time high at 7.6% which is 0.6 higher as compared to 2019. These statistics also indicate that the employment rate for all the UK citizens has increased by 0.6% to reach an all record high of 76.3%. Also, an estimated employment rates for the people aged between 16-64 years has significantly increased since early 2012 and currently identified as having leveled up. In terms of gender composition of the workforce, the employed rate of men is at 80.4% while that of the women being all time high at 72.3%. The increased women employment for the women in UK could be attributed to the changes in the State Pension age for women leading to fewer women between the ages of 60 and 65 years (Express UK, 2020).
KSA
In Saudi Arabia, JADWA 2019 report indicates that the unemployment rates in Saudi Arabia has significantly declined with 12% from the 12.3% in the last quarter of 2019. The majority of the population engaged in the workforce is the youth at 31.4%. In KSA, majority of their labour market trends are dictated by the existence of expatriates and locals (International Investment, 2019). Over the years, the number of expats participating in the labour sector has declined with more than 50,000 workers leaving the KSA labour market in the last one year. In overall, there has been a decline in the opportunities in the different sectors such as construction, wholesale and retail. This is despite the oil and gas sector witnessing a continued growth. Currently, the percentage of women participation in KSA workforce is at 18% with the rest being males. Nevertheless, as Financial Times (2019), there are efforts to increase the percentage to 30% in the next 15 years while at the same time reducing the overall unemployment in the country from 12.7% to 7% by 2030.
Significance of Tight and Loose Labour Markets
The tight labour markets have unemployment rates that are low with multiple unfiled job vacancies. On the other hand, the loose labour markets have high level of labour supply with only a few vacancies being available and multiple jobseekers. In the tight labour markets, the employers have the role of ensuring that they sustain a fierce competition to secure services of their potential employees. From this experience, it must be implemented despite of the notable economic conditions or lack of the skills that are in demand. This is not the case in a loose market as there are multiple vacancies that are available which can be filled cheaply. Therefore, the management of organisations operating in such market need to trend less carefully in a way that they handle their employees as there is limited number of alternative opportunities that can be occupied by employees who are not satisfied.
In tight labour market, a majority of the employment growth are from the full-time jobs which are an indicator that the employers often shrug off uncertainties created by the developed policies. As noted by CIPD (2019b), in the tight labour market conditions, the employers are in a stronger position of demanding the terms of their contracts with majority of them pushing for full-time and permanent roles. Also, as opposed to the loose labour markets, in such markets there is an increased growth of the skilled sector such as professionals and scientific occupations and IT. This is on top of such labor markets being more inclusive of women and older workers finding appropriate placement in the labour sector. According to a report by Saudi Arabia (2017), approximately 31% of the Saudi young people are unemployed. This is despite having an enrollment to university of more than 70%. This is majorly influenced by the fact that the offered education does not correspond to the prevailing needs in the private sector with the international education standards failing to be achieved. This means that the managers in Saudi Arabia labour market can engage the employees with different qualifications and engage them in career development initiatives. On the other hand, in UK despite the uncertainties caused by the Brexit policy, the employment has steadly increased since 2013 with the unemployment being at its lowest since 1970s (Financial Times, 2018). In this case, the players in this industry focus on solving the problem of job insecurity. This includes issues such as income security, stagnating remuneration and fluctuating zero hour contracts. The prompt concern is that worsening economic uncertainties and slowdown. Hence, the UK managers concern should be on whether the tight market conditions can be sustained for long and whether the Brexit issues would lead to worsening economic slowdown eventually leading to the employers stopping the hiring process. Lastly, the significance of the loose and tight determine the extent in which the trade unions negotiate for their employees, level of flexibility in the workplaces, the work conditions and opportunities for development on top of their competitive pay rates.
Despite of the tight or loose market conditions in UK and KSA, it is evident that both labour markets are competitive. Also, the attractiveness business environment leads to international and regional organisations venturing these sectors and positioning themselves more appropriately. One of the strategy used in positioning is providing career development opportunities for their staff for ensuring that they are providing the appropriate products and services through strategies that are culturally sensitive (CIPD, 2018). Through this strategy, such organisations understand the prevailing work environment policies and operate based on these conditions. Further, while venturing in these markets, such organization partner with local organisations or as a franchise particularly if there are worries of their brand identity being weak. For instance, Wipro venture in Saudi Arabia was initiated by partnering with Saudi Aramco and Princess Nourah University (PNU) where they successfully penetrated the technology market in KSA which is relatively competitive.
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