Relationship between economics and human resource management

When HR meets economics | Business Standard Column

relationship between economics and human resource management

My personal view would be that human resource management is a broad of the academic side with a strong linkage to Economics itself. This article discusses the implications of the Make or Buy concept to the economics of decision making. The key theme in this article is that when it is cheaper to. Read more about When HR meets economics on Business Standard. numerical relationship between good human capital management and.

This evaluation is based on what is known as an opportunity cost. In this case, if a Western firm feels that the time and money spent in making the goods or services in their country can be employed elsewhere leading to more profits, it would then outsource such activities. On the other hand, if the Western firms think that by outsourcing the activities, they stand to lose out economically, then they would rather make the goods or services in their own countries.

Economics of HR Decisions Similarly, HR managers have to decide whether they need to hire permanent staff or contract staff for particular jobs. If they hire a permanent resource, in addition to the basic salary and other allowances, they would have to pay social security, healthcare benefits, paid leaves, and other perks. However, hiring a resource on contract means that they would simply have to pay the agreed amount to the agency that is responsible for placing him or her.

Of course, the cost and the economics are not the only aspects as other variables such as the level in the hierarchy, the perceived value added by the resource in addition to the availability or otherwise of the skill sets are to be taken into consideration.

In addition, the relative costs of such value addition also form part of the economical matrix used for evaluation. The Economics of Full Time vs. Contract Hiring Increasingly, HR managers prefer to hire contract resources rather than full time employees because the ongoing economic downturn means that there are more workers in the market for even premium skills as well as the firms hiring such workers are also under cost pressures.

Indeed, the fact that firms are doing everything possible to cut down on additional costs means that the Make or Buy decisions are increasingly being skewed in favor of the Buy side. Countries such as Spain, less developed than other Western countries, face the task of guaranteeing that the birth of new industries and business activities is not going to be hindered by a scarcity of manpower or insufficient skills [64].

As [15] highlight in a study of the Spanish case, policies to increase workforce education levels are necessary. According to the study, Spain [39], inconsistent training of workers in ICT is one of the liabilities for Spanish firms that find themselves lagging behind European firms in this type of training.

relationship between economics and human resource management

Nevertheless, public policies of training in ICT that are being currently carried out in Spain through the Plan Avanza of the Ministry of Industry, Tourism and Commerce [62], among others, are examples of the efforts being made in this area. At the same time, many business strategists and human resources practitioners are working together to offer flexible solutions that allow firms to adapt to, and confront, the changes demanded by the new competitive environment.

Finally, we should point out that the lack of certain specific information limits the scope of this research. Available longitudinal series would certainly be helpful to examine organizational characteristics over a period of several years, which would allow us to offer not only empirical evidence of the relationship between human resource characteristics and ICT, but also to explain the direction of causality direction among them. Future research lines will seek to improve the amount of data available to us.

Nevertheless, our work here offers valuable evidence of significant relationships, through the statistical analysis of the differences between the firms investing in ICT, and those that do not.

We can affirm that significant interdependencies exist, and that they should be taken into account. There are many existing studies that present empirical evidence on the relationship between ICT investment and the human resource characteristics of the firm, using US datasets.

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In contrast, we enrich the set of studies in this field by offering evidence from a large sample of Spanish firms. Our paper presents the analysis of numerical data from a survey of business strategies, conducted in Spain, which allows us to add new empirical evidence to the rather limited existing literature pertaining to this country.

Our results indicate that the current digital revolution is slanted in favour of qualified workers, who at the same time receive more training on the job and reach superior average salary levels. Our statistical analyses indicate that these workers have a greater relative participation in the group of firms that incorporate new technologies.

relationship between economics and human resource management

Specifically, it is observed that firms adopting ICT require qualified and well-trained staff, capable of responding to the demands of flexibility and adaptation to new technologies, and to the new environments in which they are implemented, in order to achieve higher levels of productivity and efficiency.

In such environments, greater attention must be paid to questions of apprenticeship and continued improvement, since workers must adapt to changing situations imposed by new technologies, making specific investments to acquire knowledge adapted to the new necessities.

Additionally, we observe that firms adopting ICT offer average salary levels superior to those offered by the firms who make no such investments. This reinforces the idea that the workers who use ICT attain higher levels of productivity than are reflected in the salaries they receive as compensation for this efficiency. Finally, it is necessary to pay special attention to the differences in employability between the technology-savvy "haves" and the "have-nots," a phenomenon known as the "digital divide.

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Human Capital And Economic Growth

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relationship between economics and human resource management

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Human Resource and Economic Development: Where Does North-East India Stand?

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Economics of Human Resource (HR) Decisions

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relationship between economics and human resource management

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BA Economics & Human Resource Management | University of Strathclyde

These have been designed to provide support to the Curriculum for Excellence and the Widening Access to Higher Education programme. There are no formal classes for MDP3 although there is pathway support with the pathway leads and tutor support. Economics Microeconomics 3 Adam Smith's hidden hand - markets result in efficient outcomes - doesn't always work.

We seek to understand why through the study of market power, externalities and public goods, and then go on to apply these ideas to issues of education, healthcare provision and crime and punishment. Macroeconomics 3 This class builds on the Macroeconomics you studied in second year by covering four topics in detail: