The desire to improve living conditions and provide necessary goods is typical of human beings. Constant development and innovative activity made the production process in our economy highly technological: people are now often substituted by machines, although human factor stays irreplaceable. Labour is generally thought to be one of the three main factors of production along with land and capital.
Labour market is a place where potential employees and employers interact in the process of job research for the former and workforce research for the latter. This market has no determined physical location and primarily its participants contact through the Internet or telephone. Like any other market, labour market functions in accordance with the forces of supply and demand, where demand is defined by the quantity of vacancies and supply – by the quantity of job seekers. In fact, potential employees are sellers of workforce, so they are interested in receiving the highest possible price for it. Companies are the buyers at labour market and, as any other buyer, prefer paying less for better product, although can raise wages for highly productive workers. Thus, labour market creates certain conditions for these two groups to meet and spend much less time on the research in both cases.
Another important function of labour market is price fixing: when supply and demand interact, they form prices at any market; labour market is special from this point of view, because price is expressed by the wages for workers. Here well-known rules of supply and demand work just like at other markets. For example, if the quantity of vacancies increases, the prices will also rise and so do wages, and vice versa. When supply increases, the prices fall and general level of wages decreases.
Such fluctuations are specific for modern labour market, they mean that the market is quite sensitive to changes and accommodates to them quickly. Labour market flexibility is typical for all regions and countries, although it is developed to different extents depending on local conditions. When labour market adjusts to various changes, it increases the productivity of the whole economy, because it supplies more appropriate human resources that can fulfil necessary functions. Thus, it is important to study the fact of labour market flexibility, its causes and possible consequences, because it may be one of the definitive factors of the nearest future of global economy.
A subject can be called flexible if it is able to adapt in response for changing conditions, this characteristic may refer to qualitative as well as to quantitative changes. Nowadays we can hear the word “flexible” referring to different consumer products, political ideas, laws, timetables and, first of all, people. Logically, any feature is caused by something: environment determines many and influences almost all of them.
Modern world is a highly complicated and permanently changing system, especially referring to economy. Labour market as a part of economy is by default flexible, because historically the production process has changed many times and each stage of its development required different specialists. The society accepted …