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LABOR MARKETS
Why is a geographic salary structure necessary? Because the headquarters office, branch offices, manufacturing plants, warehouses, and remote employees may work in different labor markets.
The Meeting of Supply and Demand
The demand for and supply of jobs intersect in labor markets.
Labor markets
Employers provide the demand for labor
Employees provide the supply of labor
The labor market determines the market value for jobs AND connects employers and applicants in the marketplace.
| Market | An area across which prices normalize through regular interaction between a set of buyers and sellers exchanging goods, services, or information. |
|---|
In labor markets, the size of the area may range from a city to the global marketplace.
The size of the labor market also varies with the KSAs (knowledge, skills, and abilities) of the labor supply such as:
- KSA type
- AND
- KSA level
Recruiting for various levels of positions depends on the labor supply. The variation usually goes something like this:
| National/International Market | Regional Market | Local Market |
A labor market contains many specialized markets for various occupations. These markets are linked by the possibility of transfer between jobs.
Each organization can be considered a separate "internal labor market" for two reasons:
- Organizations often promote from within for jobs higher in the hierarchy of jobs.
- AND
- Organizations create jobs that are organization specific; the organization provides training for the employee so that the skills obtained may have little transferability to the outside labor market.
Memory Jogger
Note: Memory Jogger questions are not scored. They serve only to help you remember some of the course material covered thus far. You must select the correct answer in order to proceed to the next section.
The area in which employers and employees are in close enough communication that the market value of jobs tends to be the same throughout the area is called the: