In economic theory, the internal labor market (ILM) refers to the intra-firm movement of labor within the same enterprise, in which the wages and placement of workers are largely determined by rules and procedures. ART is contrasted with the external labor market, in which distribution among enterprises and redistribution across regions and countries of the labor force take place, and wages and distribution of labor are the result of the action of market forces.
Internal labor markets have a number of distinctive features:
The relative independence of the wage rate of some ART workers from the ratio of supply and demand for a similar type of labor on the foreign market (wages are determined by other rules and criteria, including rules and procedures);
Vacancies are filled primarily through personnel promotion;
There are long-term relationships between employers and employees;
There is a positive relationship between the amount of wages and work experience and the employee’s position in the enterprise;
Relative independence of its employees from external competition;
Relatively small number of agents on the market;
Limited places of employment;
Relatively few mobility options;
Great importance of administrative methods of regulation;
Quick movement of workers without high costs;
A significant amount of poorly formalized information inaccessible to external economic entities when making decisions.
The main reasons for the formation and development of ART are the following:
1. specific professional training based on the uniqueness (distinctive features) of the technologies used at the enterprise and the specificity of existing jobs;
2. the complexity and high costs of obtaining information about the potential productivity of an employee hired from the external market;
3. On-the-job training and on-the-job training (due to the importance of on-the-job training, enterprises provide incentives for both trainers and trainees).
The incentive functions of ART are based on differences in wages at workplaces of different levels; the entire payment system becomes internally interdependent and at the same time independent of external factors. External competition has been replaced by internal competition for promotion to high-paying jobs.
Interaction of VRT with the external market labor is limited and is reduced mainly to those vacant jobs for which enterprises hire new workers on the external labor market. Typically, these workers are hired at lower job levels. Only if the enterprise does not have worthy applicants for vacancies at a higher level, the enterprise replaces them with the help of the external labor market.
It is known that entrepreneurs often have a need for a relatively small and, very importantly, short-term increase in the scale of use of human resources. This can be achieved by involving enterprise employees in overtime work. If a more stable need for additional work arises, temporary internal part-time work may be arranged.
A similar situation exists when considering the characteristics of labor supply, primarily in the form of man-hours. If the employer has a need to perform additional work, then the employed periodically have a desire to receive additional money. Often this need becomes so urgent that they are willing to do extra work to satisfy it, which means nothing more than offering man-hours of labor. All other things being equal, an employee in most cases prefers additional workload at his enterprise to work on the side.
Labor demand, expressed in employees, arises if it is necessary to find a replacement for a quit employee. To satisfy it, the employer can go outside the enterprise. However, it is beneficial for him to use the services of his employees, filling vacancies with them, achieving the solution of three problems at once:
Losses caused by the absence of workers in important positions are reduced (they are replaced by less significant losses due to the unfilling of less important vacancies);
The possibilities for stimulating the employed are significantly expanding;
The costs of searching, attracting and selecting employees fall, since this approach requires filling positions that are not so responsible.
The practical implementation of this approach requires the formation of a system of permanent employment at the enterprise. This is achieved, firstly, by stimulating the retention of employees, and secondly, by considering them as priority applicants for filling vacant jobs at a higher level. In this case, the employee’s desire to occupy a certain position can be considered as an offer of his labor within the given enterprise.
Although the internal labor markets of different enterprises are usually isolated from each other, they are subject to the following rules and restrictions:
1. ART has a hierarchical structure in which a number of levels can be distinguished;
2. an employee, as a rule, first gets to one of the lower levels of ART, and then gradually moves to higher levels (a so-called career ladder is created);
3. workers on the domestic labor market are largely protected from wage fluctuations and the threat of unemployment.
Each internal labor market can be described as some combination of job guarantees for employees of the enterprise and mechanisms for their gradual promotion. The traditional form of ART is the gradual replacement of increasingly higher-paid and attractive positions with workers hired at the lowest level of the hierarchy.
The influence of internal labor markets on labor and production efficiency:
They reduce the company's costs of searching, selecting, hiring and training labor.
The internal labor market is inseparable from the monopoly position of its subjects, so it becomes difficult to replace workers even when applicants for their positions from outside have a much higher level of professionalism.
The main functions of the internal labor market include:
Providing differentiated social protection for workers;
Special training and development of skills of employed people;
Preservation of the most valuable part of labor potential;
Maintaining social stability of the team.
Feature internal labor market is that enterprises, in order to stimulate the labor efforts of workers and minimize control costs, can pay them wages above the equilibrium one (i.e., more than is required to provide a certain amount of labor in a competitive external market). Such wages are called effective wages.
Employees, receiving wages higher than at other companies, will become afraid of losing it when they are fired. In addition, the costs associated with turnover will be reduced, and the company will be able to select the best employees when hiring. Thus, increasing wages reduces control costs and ultimately increases profits.
A typical dependence of a worker’s labor effort on wages (Solow condition) is shown in Fig. 7. Wages are marked on the vertical axis, so the curve depicts the inverse relationship between wages and labor effort w(e).
Rice. 7. Graphic interpretation of the Solow condition
Assuming that the employer chooses the wage w 1, then this will lead to costs per unit of efficiency w 1 /e 1, (on the graph their value is shown by the inclination of the beam OA). At the point A the effort-wage curve has a slope 
.
The employer can reduce costs by choosing a wage w * . An increase in salary results in a relatively greater increase in effort. (e*). At w* Ray Oe reaches the last bend of the curve W e and coincides with the slope of this curve. The first circumstance means that w/e- costs per unit of labor efficiency reach a minimum when w*, second - what is at this point (e). The same result is obtained by combining the two obtained first-order conditions. In other words, at an optimal (effective) wage that minimizes costs, the wage elasticity of effort will be unity. This means that, given the efficiency wage, a certain relative change in wages will lead to the same relative change in labor effort.
This phenomenon is called the “Solow condition”. It follows from this that effective wages depend only on the wage-effort ratio. Therefore, when the factors affecting the demand for labor change (the price of the product, capital, etc.), the effective wage will not change, remaining rigid, only the quantity of hired labor will change.
The firm will hire more workers without extracting more effort from those already hired by increasing wages. A change in the wage level will only occur when the firm faces a limited supply of labor. Wage rigidity will also lead to unemployment in equilibrium. If the effective wage is greater than the market leveling wage level, firms will not lower wages, benefiting from excess labor supply.
In economic theory, the internal labor market (ILM) refers to the intra-firm movement of labor within the same enterprise, in which the wages and placement of workers are largely determined by rules and procedures. The internal labor market is contrasted with the external labor market, in which interfirm labor mobility occurs, and wages and labor distribution are the result of market forces.
Internal labor markets have a number of distinctive features. First of all, these include the following:
− the relative independence of the wage rate of some ART workers depends on the relationship between supply and demand for a similar type of labor on the foreign market (wages depend on the length of service and the employee’s position in the enterprise);
− filling of vacancies occurs, first of all, by promoting personnel up the career ladder (an employee, as a rule, first gets to one of the lower levels of VRT, and then gradually moves to higher levels);
− there are long-term relationships between employers and employees;
− there is relative independence of the enterprise’s employees from external competition, protection from wage fluctuations and the threat of unemployment;
− there is a relatively small number of ART agents and limited places of employment;
− there is insignificant variability in mobility with rapid horizontal and vertical movement of workers without high costs;
− administrative methods of regulating relations in ART are of great importance;
− the presence of a significant amount of poorly formalized information inaccessible to external economic entities when making decisions;
− domestic labor markets are usually isolated from each other.
The main reasons for the formation and development of ART are the following:
1) specific professional training, based on the uniqueness of the technologies used at the enterprise and the specificity of existing jobs;
2) the complexity and high costs of obtaining information about the potential productivity of a worker hired from the external market;
3) vocational training on the job and learning while working with incentives for both trainers and trainees.
The interaction of ART with the external labor market is limited and is reduced mainly to those vacant jobs for which enterprises hire new workers on the external labor market. As a rule, these workers are hired at lower job levels, which correspond to relatively low qualifications. Only if the enterprise does not have worthy applicants for vacancies at a higher level, the enterprise replaces them with the help of the external labor market.
From the employer's point of view, employees employed in the enterprise and those located outside it are significantly different, even if they have the same level of qualifications and other objective characteristics. This is due to the fact that the most important features of labor behavior cannot be clearly defined until the employee completes at least several production tasks. However, according to labor law, this presupposes the establishment of an employment relationship. This circumstance makes it preferable for an employer to use the labor services of already attracted workers rather than look for them on the side.
This desire can be fully realized if we consider the demand for labor in the form of man-hours.
It is known that employers often have a need for a relatively small and (which is very important) short-term increase in the scale of use of human resources. This can be achieved by involving enterprise employees in overtime work. If a more stable need for additional work arises, temporary internal part-time work may be arranged.
A similar situation exists when considering the characteristics of labor supply, primarily in the form of man-hours. If the employer has a need to perform additional work, then employed workers periodically have a desire to receive additional money. Often this need becomes so urgent that they are willing to do extra work to satisfy it, which means nothing more than offering man-hours of labor. All other things being equal, a busy worker in most cases prefers additional workload at his enterprise to work on the side.
From the point of view of modern economic science, supply and demand must be considered in conjunction with the so-called transaction costs. These costs include the time and money spent by the employer and employee to satisfy their demand for labor (supply of labor). It should be noted that if employment relations are formed within the enterprise, they will be minimal.
So, the components of the labor market related to the supply and demand of labor in the form of man-hours turn out to be closely related to the enterprise where they operate.
The demand for labor, expressed in workers, arises when it is necessary to find a replacement for a quit employee. To satisfy it, the employer can go outside the enterprise. However, it is beneficial for him to use the services of his own employees, filling vacancies with them and achieving the solution of three problems at once:
− losses caused by the absence of workers in important positions are reduced (they are replaced by less significant losses due to the unfilling of less important vacancies);
− opportunities to stimulate employed workers are significantly expanded;
− the costs of searching, attracting and selecting employees fall, since this approach requires filling positions that are not so responsible.
The practical implementation of these tasks requires the formation of a system of permanent employment at the enterprise. This is achieved, firstly, by stimulating the retention of workers, and, secondly, by considering them as priority candidates for filling vacant jobs at a higher level. In this case, the employee’s desire to occupy a certain position can be considered as an offer of his labor within the given enterprise. Thus, the demand for labor in the form of workers is also largely carried out within the enterprise.
All this contributes to the transformation of the labor behavior of the employed, since it becomes more profitable for them to make efforts for job advancement rather than to search for new jobs outside the enterprise.
Thus, both the demand for labor, expressed in man-hours, and the demand for labor, expressed in employees, are largely satisfied within the enterprise. The same applies to labor supply.
Let us note that all employed people are personally free people. Therefore, any change in the market situation may lead them to decide to change jobs. Enterprise management has to spend significant amounts of money to attract workers to low-prestige positions.
In some cases, the dismissal of certain categories of employees entails such high social costs that it makes it beneficial to provide them with job guarantees. Thus, a significant part of the labor force cannot be excluded from the production process without serious costs in the current and future periods. There is a mutual desire of employers and employees to ensure the permanent assignment of these workers to a given enterprise. At the same time, changes occurring in the labor market outside the enterprise must be neutralized in such a way as to prevent their release.
Each internal labor market can be described as some combination of job guarantees for employees of the enterprise and mechanisms for their gradual promotion. Both job guarantees and employee promotion mechanisms have a clearly defined institutional nature, consisting in the presence of a large number of formal and informal rules and restrictions. They, and not economic factors themselves, primarily determine the nature of decisions made in this area.
The traditional form of ART is the gradual replacement of increasingly higher-paid and attractive positions with workers hired at the lowest level of the hierarchy. Moreover, only the lowest positions can be occupied by persons who were not previously within the external labor market or who did not participate in social production at all. All others require as a precondition more or less long-term employment in less attractive positions.
Assessing the impact of internal labor markets on the efficiency of labor and production, one cannot help but note some contradictory points. On the one hand, they reduce the enterprise’s costs of searching, selecting, hiring and training labor; reduce labor turnover, which leads to higher and more sustainable productivity of living labor and more efficient use of fixed and working capital; contribute to the development of the labor motivation system, the creative abilities of employees and activate their own investments in education (upgrading their qualifications, obtaining a second profession, specialty).
On the other hand, the internal labor market is inseparable from the monopoly position of its subjects. The negative consequence of this is, in particular, the difficulty of replacing employees, even when applicants for their positions from outside have a much higher level of professionalism.
The main functions of the internal labor market include:
− ensuring differentiated social protection of workers;
− special training and development of skills of employees;
− preservation of the most valuable part of labor potential;
− maintaining the social stability of the team.
All these are very important functions, the implementation of which is a matter of public interest. Therefore, the state has an important, although not decisive, influence on the functioning of domestic labor markets by regulating the fundamentals of labor relations, implementing social protection programs for certain groups of the population, creating general and special employment programs and pursuing anti-discrimination policies.
Another feature of the internal labor market is that enterprises, in order to stimulate the labor efforts of workers and minimize control costs, can pay them wages above the equilibrium one (i.e., more than is required to provide a certain amount of labor in a competitive external market). Such wages are called effective (optimal).
For what reasons are enterprises forced to stimulate the labor efforts of employees by setting effective wages above the equilibrium? Firstly, in the process of fulfilling an employment agreement, one of the parties (employee or employer) may evade fulfilling the terms of the employment agreement. An employee can reduce labor efforts, provide labor services in a smaller volume or of worse quality. The employer's reaction in this case can be different - from strengthening control over the employee's work (if shirking is discovered) to dismissing him. In the latter case, the fired worker can immediately find a job at the same salary in a competitive equilibrium labor market, and for this reason it is difficult to punish such a worker. The employer can only constantly monitor the employee, while incurring large costs, or he can increase the salary of such an employee (as an alternative solution). In this case, workers, receiving wages higher than at other companies, will become afraid of losing it upon dismissal. In addition, costs associated with turnover will be reduced; the firm will be able to select the best workers when hiring. Thus, increasing wages reduces control costs and ultimately increases profits.
A typical dependence of a worker’s labor effort on wages (Solow condition) is shown in Figure 2.14. Wages are marked on the vertical axis, so the curve depicts the inverse relationship between wages and labor effort w (e).
Figure 2.14 – Solow condition
If we assume that the employer chooses wages wv, then this will lead to costs per unit of labor efficiency w1/e1 (their value is shown in the graph by the slope of the ray OA). At point A, the effort-wage curve has a slope
The employer can reduce costs by choosing wage w*. An increase in salary gives a relatively greater increase in effort e*. At w*, the OS ray reaches the last bend of the curve and coincides with the slope of this curve. The first circumstance means that w/e is the cost of a unit of labor efficiency, which reaches a minimum at w*; second, what's at the point
. The same result is obtained by combining the two obtained first-order conditions. With dQ/dL = dQ/dw we get:
In other words, at an optimal (effective) wage that minimizes costs, the wage elasticity of effort will be unity. This means that, given the efficiency wage, a certain relative change in wages will lead to the same relative change in labor effort. This condition is called the “Solow condition”. It follows from this that effective wages depend only on the wage-effort ratio. Therefore, when factors affecting the demand for labor change (product price, capital price, etc.), the effective wage will not change, remaining rigid, but only the quantity of hired labor will change. The firm will hire more workers without extracting more effort from the workers already hired by increasing wages. A change in the wage level will only occur when the firm faces a limited supply of labor. Wage rigidity will also lead to unemployment in equilibrium. If the effective wage is greater than the wage level at which the labor market levels off, firms will not lower wages, benefiting from excess labor supply.
The reasons why enterprise administrations decide to set effective wages for certain categories of workers can be different - facts of shirking from work, turnover of the most valuable employees, unfavorable conditions for the selection and hiring of new employees, revealed on the basis of sociological research.
Depending on the location of distribution (field of activity), a distinction is made between the external and internal labor markets and, accordingly, external and internal marketing of personnel.
External labor market is a system of social and labor relations between employers and employees on a national, regional, and industry scale. It involves the primary redistribution of workers according to areas of employment and their movement between enterprises.
External personnel marketing means that the organization implements the approach and tools corresponding to it on the external labor market.
The main task of personnel marketing is external profiling of the enterprise, which, in turn, means conveying to potential candidates for vacancies a positive attitude towards the organization and providing the organization with the necessary, professionally suitable employees.
Analysis of the external labor market helps solve 4 problems:
1) External demonstration of the special attractiveness of the organization as a place of work and bringing relevant information to target groups.
2) Selection and use of effective ways and measures to provide the enterprise with personnel, for example, professional consultations, personnel leasing, etc.
3) Identification and formulation of specific proposals for the entry of new employees into the organization, depending on demand, target group and timeliness.
4) Analysis of application documents and selection of new, professionally suitable employees.
Attracting workers outside the enterprise provides the manager with wider choice and directly covers the organization’s need for personnel, as well as creates new impetuses for development. At the same time, the company may lose the opportunity to use the motivational potential of the internal labor market.
Internal labor market is a system of labor relations limited by the organization.
Internal personnel marketing focuses on employees already employed in the organization, and involves taking into account and shaping the most important five factors of its attractiveness as a place to work:
1. the range of tasks and responsibilities of an employee at a specific workplace;
2. the opportunity for professional growth and the realization of career aspirations;
3. opportunity for training, advanced training and retraining;
4. production climate in the team, organizational culture;
5. formation of a system of motivation and stimulation of work activity.
Main features of the internal labor market:
The wage rate of a number of workers does not depend (or almost does not depend) on the ratio of supply and demand for a similar type of labor on the foreign market;
Salaries, as a rule, are higher the longer a person works in a company and the older he is;
The company has a service (career) ladder and a promotion system based on the use of existing employees;
Formal and informal rules of behavior and intra-company traditions play an important role;
The relationship between employer and employees is long-term and stable.
Often work requires unique knowledge and skills that are associated with special training. It is more profitable for a company to use those who have already mastered them than to hire workers on the external labor market. Hiring each new employee is associated not only with additional costs, but also with risk, the greater the greater the responsibility of his job responsibilities.
At the same time, domestic labor markets have their own problems and shortcomings. Thus, if wages depend on a worker's position, length of service, and age rather than on productivity, then incentives to work may be weakened, so that the firm must maintain a sufficient level of internal competition for advancement.
Labor market segmentation- this is the division of jobs and workers into stable closed sectors and zones, between which the movement of labor is extremely limited.
To carry out segmentation of the labor market, the following factors are used:
Geographical location (region, city, district, etc.);
Economic indicators (distribution of buyers of labor power by type of ownership, their financial situation, distribution of sellers of labor power by level of material security and degree of need for subsistence, etc.);
Demographic factors - gender, age and family composition of the population;
Socio-economic - level of education;
Professional qualifications, work experience, nationality, etc.
The labor market is divided into two sectors: primary (skilled) and secondary (unskilled).
The criteria for distributing workers by sector are the worker’s skill level and the difficulty of replacing him or her for the employer. The secondary labor market does not require special training or special qualifications from workers (waiters, servants, seasonal workers, etc.). In the primary labor market, on the contrary, workers have qualifications that require lengthy preparation (training, experience).
2.2. Features of the mechanism of functioning of the internal labor market in Russia
In the system of employment relations, the internal labor market has its own specifics associated with its primary focus on the intraprofessional mobility of workers within the organization. The dynamics of the internal labor market are determined by the presence and composition of personnel, the ratio in its structure of the personnel “core” and the peripheral workforce, the intensity of labor movements and personnel rotation, the level of personnel employment, the efficiency of using the organization’s labor potential, the competitiveness and innovativeness of the organization as a whole.
The following functions of the internal labor market are distinguished:
providing employment guarantees and social protection for workers;
ensuring a balance between labor supply and demand within the organization;
development of personnel and adjustment of their professional and qualification characteristics in accordance with innovative changes in the organization.
Internal labor markets of organizations differ from external labor markets in terms of both formation and functioning, since any organization is a closed structure that maintains connections with the external environment only out of necessity. This also applies to the influence of the external labor market on the internal one: as long as the employee is satisfied with the quality of his working life, he does not need to leave his workplace and enter the external labor market in search of a better place with all the conditions necessary for him.
The patterns of formation of demand and supply of labor in internal labor markets also have their own specifics in comparison with labor markets internal to the company. When the scale and structure of internal demand for labor changes, the organization can and should adjust the supply of labor coming from already hired workers. Almost every employee of a particular organization, who is timely aware of changes and innovations in the company’s activities, will and should make a conscious decision about their own professional growth. The interaction of the economic interests of the company and the worker is manifested in changes in the structure of labor supply. The employee’s desire to maintain his employed status will stimulate him to adequately respond to changes in intra-company demand for labor. The most “flexible” employees can develop in advance the knowledge, skills and abilities that in the future will be in demand by the organization in the internal labor market.
The organization itself can actively influence changes in the structure of the internal labor supply by developing and implementing its own personnel policy, including personnel development programs, which include the following components:
training;
retraining and training in related professions;
An analysis of human resource management practices in Russian organizations allows us to conclude that the level of development of market relations within intra-company labor markets is far from uniform. 1 Today in Russia there is almost the entire range of forms and methods of human resource management within the domestic labor market. However, the ongoing personnel policy itself does not yet provide a clear answer to the question about the degree of development of the internal labor market of a particular organization.
From the point of view of managing the internal market, an organization, within the framework of its personnel policy, on the one hand, cannot respond to measures of the state’s socio-economic policy (primarily employment policy), and on the other hand, it has a fairly wide range of tools to effectively influence the system of motivational priorities of employees.
Thus, personnel policy, built on the basis of the norms of corporate culture and the corresponding standards of organizational behavior, can influence the degree of real participation of the employee in the processes taking place in the internal labor market.
2.3. Interaction of the enterprise with the external labor market
Currently, it is customary to distinguish between open (external to the enterprise) and intra-company (closed) labor markets, which are closely interrelated. The intra-company labor market includes a system of relations (organizational, legal, social, economic, information) between employers and employees, representatives and their interests in the state regarding the placement of workers in production, organization and labor protection, working hours and pay, professional promotion and retraining, incentives for additional results. Thus, we can talk about the presence of an internal subsystem of the labor market - intra-company labor market. The development of the intra-company labor market system should be considered as a unified development of organically related systems: production, labor, and labor relations operating in the system.
In Russia, the domestic labor market is poorly developed. This is explained not so much by shortcomings of an organizational and legal nature, but by the lack of a unified approach to the information assessment of supply and demand. As a result, there is a discrepancy between the increase in the number of vacancies and the increase in the number of unemployed. In addition, the lack of a legislative framework for regulating the relationships between subjects often leads to imbalance in the unified labor market system. Today, there is a need for a legislative basis for the relationship between employers and Social Security bodies. Applications for available jobs are not always objective and complete. According to expert observations, it was found that only less than 46% of employers in the Irkutsk region constantly submit lists of vacancies for jobs. More than half of the vacancies in the region are filled by employers themselves. In this case, it can be argued that currently in the labor market there is the formation of officially and unofficially declared demand, which are neither structurally nor qualitatively interconnected. This is caused by a whole range of reasons, among which are the following:
Lack of a unified classification system for professions, specialties and positions;
Various approaches to determining professionally qualified characteristics of labor supply and demand;
Different methodologies, forms and content of existing classifications of professions.
When filling a vacant position, the employer solves the problem of choosing between an already hired employee and an outsider (that is, located on the internal labor market external to the enterprise). The following approach is traditional: if it is necessary to fill a vacant position, first there is a search for candidates to fill it within the enterprise. In the absence of an employee with the appropriate characteristics, the enterprise has two main options:
Carry out retraining and advanced training of any of the existing employees;
Bring in an outside worker.
This task becomes more difficult the more a vacancy occurs at a higher level. Schematically it looks like this (Fig. 2.2).
Figure 2.2 Interaction of internal and external labor markets
The squares show the different positions, and the dotted lines separate the levels. Vertical arrows reflect possible options for employee promotion. Horizontal arrows characterize the attraction of workers to various levels of the hierarchy from the outside, and the thickness of the line is proportional to the complexity of the supply of labor from outside to a particular level of the internal labor market. Recruiting highly qualified employees for positions of responsibility and specialists is a difficult task for enterprise management, since they influence a number of lower-level employees. Therefore, the higher the vacancy is filled by an outside applicant, the more complex and lengthy this process is. At the same time, when attracting employees to the highest levels, a situation often arises when an enterprise finds it difficult to find a suitable candidate, while when searching for people to perform less responsible job duties, it is often necessary to choose from a large number of applicants who satisfy all the formal criteria. As a rule, it is easy to find only jobs that do not require high qualifications (for example: salesperson). Highly qualified specialists often look for work in several areas (HR manager, development specialist, personnel training, labor inspector, economist, labor protection specialist, etc.) and are even forced to change their place of residence in search of work. And as a rule, low-skilled workers look for jobs closer than highly-skilled workers.
The internal labor market can interact with several markets, each of which has its own group of professions with varying qualifications (Fig. 2.3).
Figure 2. 3 Spatial structure of the external labor market
The regional market includes workers whose professional occupations allow them to be mobile between local markets (for example: installers of high-tech equipment). National and international labor markets include engineers (engaged in the maintenance of oil production equipment), specialists (working in the field of programming), scientists who have shown high professional results, high-class managers, as well as representatives of rare specialties.
Clarifying the boundaries of the regional labor market is important for enterprise management because it makes it possible to identify important characteristics of competition for labor with other employers.
From the point of view of the management of an enterprise, the regional labor market represents its external environment, which has an impact on the personnel management of the enterprise. The following indicators can be used as the primary characteristics of such influence:
Economic activity of the population;
Unemployment rate;
Average actual prevailing salary level;
The state of the social guarantee system;
The degree of development of non-standard forms of employment.
The complexities of interaction between internal and external labor markets are reflected in the functioning of expanded internal labor markets.
The concept of expanded labor markets is based on the proposition that expanding the search scope and increasing the complexity of their selection require the implementation of a selective approach to attracting labor. This approach is implemented through the formation of an expanded internal labor market. It represents the unification of the internal labor market with independent institutions closely related to it on a non-market basis, which facilitate its interaction with other labor markets and adaptation to changes in the external environment. Such institutions are families (hiring relatives of company employees), professional associations (which recommend their members to fill vacancies). Naturally, each of these institutions can be associated with several internal labor markets.
Finally, the internal labor market of one enterprise may be located on the periphery of the expanded internal labor market of another (the flow of labor from one enterprise to another).
The expanded internal labor market can be represented as follows (Fig. 2.4)
Figure 2.4 Structure and interaction of expanded internal labor markets
The shaded pyramids reflect the hierarchy of the internal labor market. Each level of the internal labor market corresponds to a whole group of social institutions associated with it.
The transformation of the internal labor market into an expanded one overcomes their closed nature and helps to increase the degree of their sustainability.
Thus, studying the mechanisms of interaction between an enterprise and the external labor market is a complex task, especially in today’s complex Russian conditions. We have to take into account the fact that the internal labor markets themselves are experiencing the impact of the crisis, which significantly disrupts the mechanism of their functioning. Nevertheless, taking into account the state of the external labor market and organizing rational interaction with it is one of the foundations of effective personnel management.
Improving the regulatory mechanism market labor in the modern Russian economy. THEORETICAL ASPECTS MARKET LABOR Concept And essence market labor Market labor- this is a system...
There are external and internal labor markets.
Foreign market covers the relationship between sellers and buyers of labor on a national, regional, and industry scale. These are relationships that arise regarding the hiring of workers of the corresponding profession, specialty, and therefore require a strict classification of work and a clear definition of their content.
In the foreign market there are sectoral trade unions that unite workers in individual industries, as well as trade unions that unite workers by profession. The foreign market is characterized by significant staff turnover, that is, it assumes the possibility of free transition from one place of work to another.
Domestic market involves the movement of personnel within the enterprise, moving from one position (job) to another. This movement can occur both horizontally and vertically. Horizontal transfer to another workplace without changes in qualifications, without promotion. Vertically - transfer to another workplace with a promotion or to a job requiring higher qualifications.
The development of the domestic market helps reduce staff turnover, since the enterprise is interested in retaining employees who know the specifics of its production.
Trade unions unite enterprise employees regardless of their professions. Employment here is guaranteed to a greater extent than on the external labor market, and this, in turn, helps to increase the efficiency of using labor potential.
Labor market segmentation, its assessment
The labor market is limited to a certain economic space, which has clear territorial, sectoral, demographic, social, national and other parameters.
Labor market segmentation is the division of the labor market into separate groups according to certain criteria, depending on the goal of study, analysis or management.
The labor market is segmented according to the following principles: territorial (geographical), professional and qualification, social, by units of social production, by the quantitative ratio of buyers and sellers of goods (“labor force”), on competitive terms.
From point of view territorial approach The following labor markets are distinguished:
Internal - local, regional, national;
External - transnational and global.
From point of view level of social production labor markets are distinguished:
In-house;
Industry;
National.
Depending from professions highlight the market:
Workers (primarily manual workers);
Specialists and managers.
By demographic principle The labor market is divided:
By gender - men, women;
By age - youth, people of working age, people of pre-retirement age.
By national principle:
Ukrainians, Russians, Moldovans, Bulgarians and others.
By level of education :
With higher, specialized secondary, secondary and incomplete secondary education.
By temporary principle:
Temporary (hourly, daily, monthly, seasonal), permanent (summer).
By legally legal aspects:
Official (registered), informal (open or black) labor market.
Functions of the labor market
The labor market influences the development of the economy and acts in certain directions; manifests itself in various forms and performs different functions. The latter refers to the type and type of activity. The modern labor market fulfills the following functions:
1) social division of labor. The labor market differentiates between the employee and the employer, distributes employees by profession and qualification, industry and region;
2) informational. Provides participants in the process of purchasing and selling goods and labor with information about employment conditions, salary levels, job offer, quality of labor, etc.;
3) intermediary. The labor market establishes a connection between employers and employees who enter the labor market to satisfy mutual interests and needs;
4) pricing. This is the main function of the labor market, establishing a balance between the demand and supply of labor. Only in the labor market is there universal recognition of the labor costs for the reproduction of the commodity “labor power” and its value is determined;
5) stimulating. Thanks to the mechanism of competition, the labor market stimulates more efficient use of labor resources in order to increase the profitability of production, and also stimulates hired workers to improve their professional and qualification level;
6) healing. Thanks to competition, social production is freed from economically weak, unviable enterprises. The labor market allows workers with the highest quality indicators of the labor force to gain an advantage in competition. It is the market that creates such labor motivation, which, on the one hand, forces workers to hold on to their jobs in conditions of fierce competition, and on the other, financially interests and stimulates their initiative, competence, and qualifications;
7) regulating. In many ways, the market influences the formation of the proportions of social production and the development of regions, facilitating the movement of labor from some regions of industries to others, more efficient ones. The labor market regulates surplus labor resources, their optimal placement, and, consequently, their effective use.
Labor market flexibility
Labor market flexibility - this is his ability to quickly adapt to changes in the relationship between demand and supply of labor due to high levels of: general and vocational education, activity and mobility of the workforce and changes in regulated working hours (day, week, year). Labor market flexibility- this is at the same time the flexibility of labor relations that take place there.
Labor market flexibility is characterized by the following elements:
High territorial and professional mobility of workers;
Flexibility of employers' labor costs, including mobility of the level and structure of wages in accordance with the economic situation;
Flexibility in personnel management at enterprises (hiring, rotation, dismissal, setting working hours);
Democratization and diversity of forms of employment, including non-standard forms (self-employment, on-call work, home workplace, part-time work, etc.);
A highly developed system of professional training and retraining, in particular adult education.
Flexible forms of organization of the labor market allow society at the macro level to reduce the severity of unemployment problems, providing the most vulnerable segments of the population with the opportunity to earn income, maintain their level of qualifications and performance, and maintain social status; at the micro level, they allow the enterprise to manipulate the volume of labor that is used without creating social tension due to the dismissal of workers when production needs for labor change.
