Growing employees’ bargaining power: Organizational adaptation to the new trends of the labor market

Abstract

THE AIMS OF THE PAPER

The purpose of our study is to find out how organizations respond to labor shortages, what kind of retention and incentive measures are introduced in order to reduce turnover intention in the organizations and help increase employees’ job satisfaction.

METHODOLOGY

We have conducted our surveys with 54 employers, mainly with the HR staff or the head of the company based in Northern Hungary and in the North Great Plain regions. Organizations were included in the sample on a contact basis, and we have applied the snowball method to find them. We have conducted structured interviews with business owners or HR staff, and the results of previous studies on the same topic were taken into account in the design of the measuring instrument.

MOST IMPORTANT RESULTS

Nearly 80% of the organizations are struggling with labor shortages, both SMEs and large companies. The most serious is the situation in engineering and management and in most physical jobs that requiring some expertise. An average recruitment selection process takes about 3.5 months until the best candidate is founded. The average fluctuation rate was 15% in 2017, signifying an expressive deterioration compared to 2016. Turnover intention is mostly caused by wage problems, foreign employment and retirement; therefore organizations must develop their practices to keep employees and improve their commitment.

RECOMMENDATIONS

The pace of wage growth is related to the size of the business. Until then, it is difficult to increase the market dominance of SMEs while taking into account their financial potential, they do not use the labor market attractiveness and retaining power inherent in raising wage levels. At the same time, they mostly recognize that what kind of external and internal needs their employees can offer to their employees, but their development is only done if the shortage of work already threatens the daily operation. If this proprietary / managerial approach can change in a renewable culture and instead of responding to organizations 'responsiveness, we can talk about innovative solutions that support employees' commitments, and with a shortage, a competitive business environment could be created with the renewed management of human resources.