LABOR MARKET :-

The market in which

workers compete for jobs and employers
compete for workers. It acts as the external
source from which organizations attract
employees. These markets occur because
different conditions characterize different
geographical areas, industries, occupations,
and professions at any given time.
Labor Market Related Terms

1- Labor Market:
A labor market is defined as a pool of all potential workers who
compete for jobs. It also includes the employers who compete
for workers. Labor markets are based on the supply and
demand of labor in a country or a specific location that are able
and willing to work.
2- Labor Force:
Labor force includes all persons classified either as employed or
unemployed during a specified period of time, usually a day or
a week. Labor force can be categorized as self-employed, wage
and salary earners, casual workers and unemployed.
3- Casual Workers:
Casual workers are those workers who are generally employed by
small entrepreneurs on daily or weekly basis on a low wage rate.
They are not entitled to any paid holiday leave or paid sick leaves.

4- Unemployed persons:
The persons in the labor market who are without work, that is, without
paid employment or self-employment and are currently either
available for work or are seeking any work are considered to be
unemployed.

5- Employment rate:
It is ratio of employed persons to the total labor force. It is the
percentage of working age people who have jobs or are employed.
6- Labor force participation rate:
It is the number of persons in the labor force as a percentage of the working-age
population. The working-age population is the population above a certain reference
age like 15 years old and over or 15–64, etc
7- Unemployment rate:
It is the ratio of unemployed people to the total labor force
8- Underemployed persons:
who are employed, but not in the desired capacity, whether in terms of compensation,
hours, or level of skill and experience. The skills of such persons are underutilized,
for example paying low wages to a highly skilled employee. Underemployment
also refers to a situation where a major portion of labor force is unemployed.
9- Underemployment rate:
It is the ratio of underemployed to either total labor force or total employment.
Labor Market in India
The Indian labor market can be categorized into three
sectors:
 Rural workers, who constitute about 60% of the workforce
 Organized of the formal sector, that constitutes about 8% of the
workforce.
 Urban unorganized or informal structure which represents the
32% of the workforce.

Categories of Labor force

 Self Employed Workers
 Wage And Salary Earners
 Casual Workers
 Unemployed Workers
Estimated Increase In Labor Force
The chart below describes the estimated increase in the number of labors from
1977-78 to 2004-05. The labor force has grown from 276.3 million to 385.5
million between 1977-78 and1993-94 showing an annual growth rate of 2.1%.
During the year 1999-2000, the workforce was estimated to be 407 million. In
2004-05 the labor market consisted of 430 million workers and has grown up to
500 million in 2006.
The Labor Force In Year 2006
It has grown up to 509.3 million out of which 60% are in
agriculture, 12% are employed in industries and the
residual 28% are in services.
LABOUR TURNOVER :
Turnover means “change”. A change in the financial
status of an organization is called “the financial
turnover”. A change in the number of employees of
an organization is called “The labor turnover”

REASONFOR LABOUR TURNOVER:

 Avoidable Reasons
(low job satisfaction, low pay, risky or repetitive work
etc.).
 Unavoidable reasons
(death, retirement, accident, poor health etc.).
Methods Used To Estimate Turnover:
Every good organization prepares a report of labor turnover to refer and rectify the
avoidable causes of turnover. Below are methods used to estimate turnover:

Average No. = (No. of employees at start + No. of employees at end) / 2

1- Separation Method/Rate:
(Number of employees separated in a period / Average number of employees in the
period ) * 100
2- Replacement Method/Rate:
(Number of employees replaced in a period / Average number of employees in the
period) * 100
3- Flux Method/ Rate:
(No. of employees separated + No. of employees replaced) / Average number of
employees in the period } * 100
Factors could be the cause of a high level of Labour
Turnover :

a) Dissatisfaction on account of insufficient wages leading to

employees moving to competitors
b) Low level of motivation from employers’ side and poor
morale within the workforce in a specific industry.
c) Recruiting and misplacement of employees resulting in
their mobility in search of suitable employment.
d) A floating local labour market offering better and
more attractive opportunities to employees. 
HOW TO REDUCE LABOUR TURNOVER
Following action may be taken to reduce labour turnover:
 Pay Problem – increasing pay scale & improving pay structure to
remove inequities
 Employees Learning to further their Career – providing better career
opportunities& ensuring the job, opportunities for training &
development program, implement promotion
 Employees Leaving due to Conflict – more effective procedure for
handling grievances & improving communication, using resolution &
teambuilding techniques, reorganisation of work.
 The Induction Crisis – improving recruitment & selection process,
ensure job requirement, developing better induction & initial training
program
 Shortage of Labour – improving recruitment , selection & training,
intoducing better method of planning & scheduling work smooth out
peak loads.
PRESENTEEISM
Presenteeism is a term used by human resource
professionals to describe circumstances in which
employees come to work even though they are
ill, posing potential problems of infection and
lower productivity. When employees go to work
sick they risk infecting their co-workers and will
most likely not be as effective or productive in
their work
Stress
Shift work
ABSENTEEISM :
In every organisation an employee / worker has some definite
working hours with certain responsibility (work assigned)
and if the worker is not present in their working hours that
called absenteeism in the organisation.

FACTORS IN ABSENTEEISM :
 Moral

 Work schedule flexibility

1- Alternative Work Arrangements

2. Compressed Work Week
3. Job Sharing, and
4. Telecommuting
CAUSES OF ABSENTEEISM :
Personal Factors - age, marital status, health, education, hobbies,
extra curricular actitvites.
Work Environment – working conditions, ralation with
coworkers & seniors and their attitude
Home Conditions – distance from residence, mode of conveyance,
family size, family problems & responsibilities
Economic Issues – subsidiary economic interests
Regional Aspects – legislations, politics, geographical situations
Organisational Features – type & size of company, work load,
nature of work, shift arrangements, management attitude,
personnel policies, leave facilities and medical benefits
Social Reasons – religion, community obligations, customs
festivals, marriage and death