Internal and External Factors of Labour Market Essay

Internal and External Factors of Labour Market - Essay ExampleLabour market of Europe is torture for aging workforce issues. Study suggests that there will be 4% hike in aging population deep down next eight old age (Krenn and Oehlke, 2001). Companies are aware of the fact but they do not have much choice left due to following reasons The world is going by dint of one of the most turbulent financial period in the history of mankind. Companies are struggling due sluggish growth rate and low final payment on investment. They are not ready to invest money on recruiting new staff and designing training & development. Companies like P&G utilization Build from within strategy in order to give new job responsibility to existing employees without hiring external candidates. Many companies use Build from within strategy in order to reduce cost of developing untrained and fresh human resource pool. In 1993, Polachek and Siebert proposed Human Capital theory in order to address aging popu lation issue (Polachek and Siebert, 1993, pp. 23-67). They have pointed out that life can be segregated into two kinds. In the first phase unsalted people develop human capital in terms of skill, knowledge and education while in the second phase they earn transaction on the basis of developed human capital. The study suggests that substandard aging population has less human capital in comparison to talented young human resource. Human capital decreases due to aging. Labour market is heterogeneous because employers can never forecast accurately future productivity of particular employee.