Addressing Labor Shortages and Surpluses: Exploring Your Options

Highlighting how the practice of offshoring spiked and then declined, as a means of meeting a company's supply of labor. We also followed this up with a discussion of all the other available means for matching one's demand for labor with the supply of labor, and how to recruit workers from different sources. We also showed how some companies are relying on enhanced training, outsourcing, automation, immigration, and offshoring of work to stay competitive and survive.

1. Discuss the advantages and disadvantages of hiring local workers versus offshoring versus bringing in immigrant labor. How does the nature of the product market affect what you might do in the labor market.

2. Assume you are a well-established company that, instead of facing labor shortage, is now facing a labor surplus in some job category. Why might it be in your best interest to use some method other than layoffs to reduce this surplus, and why are your options a function of how well you did in terms of forecasting labor demand and supply?

3. Discuss the advantages and disadvantages of promoting workers within your own firm versus going outside the firm to bring in external hires. How does the nature of the business situation affect this decision?