Internal labour market and training Available to Purchase

Skill shortages appear to be endemic in the engineering industry; CBI and Government surveys have consistently identified difficulties in acquiring skilled labour as a major constraint on the performance of the Industry. In investigating and trying to find solutions to skill shortages in individual companies, it has become evident that firms operating in the same geographical area and requiring similar types of skills vary in their ability to meet their labour requirements. The most obvious factor to look at as a cause and the one most often quoted, is differences in wage rates. Wage rates would appear to be a factor, but not necessarily a major factor. Our work to date has produced evidence to suggest that the way in which a company structures its internal labour market and the extent to which that structure is compatible with the external labour market within which it is operating can have a significant effect upon: • its ability to meet its labour requirements and adapt to sudden changes in the demand for, and availability of, labour • recruitment and training costs • opportunities which it can offer its employees to develop their full potential to the benefit of both the employee and the company.