What is the Labour Market?
A labour market is a place of interaction between employers and workers. Employers are on the lookout for hiring the best workers suitable to the employment opportunities offered, and workers look for quality employment opportunities. As a whole, the labour market functions on the laws of demand and supply of labour, further influenced by the dynamics of inflation, varying availability of technically-skilled workers, evolving technologies and the depth of their impact on human lives, etc.
Depending on the conditions of the demand and supply, labour market affects the human resource planning (HRP) within organizations, depending on current factors like education level, knowledge, skills, etc. Staffing decisions made by the HRM are affected by the pool of applying candidates whose decisions depend upon the wages offered, benefits and work conditions offered by the organization.
On the other hand, labour market also impacts HRP, as business growth increases the chances of landing jobs, thus decreasing unemployment. Continuous business growth may lead to reallocation of staff, thus creating specialised job vacancies and furthering employment prospects in the market.