Globalization and the Employment Market, Essay Example

Introduction

There are several theories related to implementing changes in companies in order to maximize the benefits and successfully address the challenges of globalisation. The below essay is attempting to review recent publications that examine the benefits and negative aspects of globalised workforce. As one of the main perquisites of the current research is that it is based on an assumption that globalisation is a multifaceted phenomenon, affecting the society, individuals, companies, and governments alike, while creating economic opportunities, as well as an increased competition. Based on the above assumption, it is important to examine the impact of the globalisation of workforce, the question of culture, education, equal opportunities, and nations’ competitive advantage on the global market of workforce.

Employment, Work, and the Impact of Globalisation

According to Douglas & Wind (1987), globalisation is a trend that has never been seen before in history. While trade arrangements between countries have been around for a long time, and international expansion of national companies have been present for centuries, the scale of the economic and labour market internationalisation is unique to today’s age. At the same time, Douglas & Wind (1987) find that there are two unique features of globalisation that impact economic activities and labour markets: the “greater interdependence and interconnectedness”(p. 14) of regions and companies, and the de-localisation of markets. Low-cost imports from developing countries drive large multinational companies’ profits, and recently, thanks to the advancement of communication technologies, many companies have moved their operations overseas in order to reduce their operational expenses related to labour costs. On the other hand, one of the impacts of the “de-localisation”, according to Douglas & Wind (1987) is that it destroys collective labour organisation.

The Impact of Globalisation on Gender Equality

Standing (1999) examined whether or not globalisation resulted in the “feminisation” of the international labour market. The follow-up research of an earlier study created in 1988 takes into consideration the international trend of companies providing more flexible and less secure working arrangements. At the same time, the author (Standing, 1999) finds the main trends in the global labour market as “erosion of protective and pro-collective labour regulations, decentralization of wage determination, erosion of employment security and a trend to market regulation” (p. 584). This trend has an immediate impact on gender equality at work. The author states that males are more likely to have a “protected” and secure employment than women. This, in turn, means that when companies decide to “downsize” their home teams and move their operations to a developing country where labour costs are lower, women are more at risk of losing their jobs. Informal work arrangements are, according to Standing (1999, p. 585) are generally “presumed to be associated with women workers”.

Reviewing the labour activity rates of males and females between 1975 and 1995, the researcher found that women’s participation in labour activity increased in the majority of both developing and developed countries. However, more relevant to the current research, the author also created a table reviewing the impact of globalisation on employment of women through flexible labour. Wages of women were found to be significantly lower in South Asia, and this indicates that global companies seeking female workers are likely to move their operations to this region. The above assumption seems to be confirmed by the research finding that unemployment among women in the region fell in the past few decades.

One of the main implications of the above findings is that women are more likely to be employed in insecure positions, and in the developing world, they have a disadvantage on the labour market. At the same time, in the majority of developing countries, there is a great difference between the wages of women and men; while in the West there are several quotas and anti-discrimination legislations in place, their lack in the developing world makes it possible for global companies to take advantage of the low wage expectations of women.

The Impact of Globalisation on Work-Life Balance and Job Satisfaction

As it has been noted above, Standing (1999) found that many companies started to create flexible, and non-standard employment opportunities. This has increased women’s participation rate in employment, however, reduced job security as well. Sweeney (2014) also concludes that there is an increased insecurity at work, which affects not only low-skilled workers, but professionals as well (p. 30). The issue of work-life balance is approached from a unique perspective by Sweeney (2014). Reviewing the results of employee surveys in the United Kingdom, the majority of workers felt that they did not have enough time to get all their work done, while an even greater proportion stated that they could not use all their skills and abilities. The above findings have a negative impact on people’s job satisfaction. Those who feel like they cannot complete their job in the given time might need to take on overtime, which would negatively impact their work-life balance.

One of the negative effects of workforce globalisation, according to Sweeney (2014) is that the “integration of global supply chains have put downward pressure on wages”. At the same time, the author finds  – confirming the previously quoted assumption of  Douglas & Wind (1987) that there is a general decline in the collective bargaining coverage (Sweeney, 2014, p. 46).

Overall, based on the above review of Sweeney’s work, it is important to note that national labour markets are influenced by international trends, and there is a great labour competition, which drives wages down, changes companies’ expectations of domestic workers. Globalisation has created an increased competition for companies, making them continuously seeking ways of reducing overhead costs. Therefore, the worker of the developed world needs to compete with millions of global potential employees. That, combined with the lower collective bargaining power has a negative impact on both job satisfaction and work-life balance.

Developing Countries’ Upward Labour Mobility

The above review of Sweeney about the labour trends of the Western world in relation with globalisation have revealed that there is an increased competition among workers worldwide. However, employing low-cost workers overseas is not simple, and companies are selective with regards to countries, skills, and types of workers. Beerepoot & Hendriks (2013) created a review of companies’ offshore employment activities, in order to reveal whether or not overseas workers have a competitive advantage over higher cost domestic employees, and how the skills of workers match the requirements of companies looking to outsource operations overseas. The main question of the research is whether or not workers of the Philippines have a real opportunity for career progression, just like employees in the Western world, or are they denied the same chances of development as those living in developed countries.

The authors (Beerepoot & Hendriks, 2013) examine data processing and call centres in the Philippines, and calls them “electronic sweatshops”. Indeed, the workplaces and employment arrangements clearly resemble the textile industry’s offshore operations. In many cases, according to Beerepoot & Hendriks (2013, p. 824) “workers carry out relatively well-paid activities (e.g. call centre work) for which they are over-qualified and this leads to an educational mismatch”. The main beneficiaries of service off-shoring are India and the Philippines, and most employees work based on a narrow job description. Business process outsourcing to overseas is a common cost-reduction strategy of companies in the west, however, workers are not provided with continuity of employment, and are often managed by a third party company that assigns them with jobs. At the same time, it has been found by Beerepoot & Hendriks (2013), this trend disadvantages lower skilled employees of large companies working in back office operation, while does not seem to affect those who are in a managerial position. The above finding indicates that workers in India and the Philippines in data centres and call centres have limited ability to gain further skills during their employment and obtain a recognition or promotion. Some skills are interchangeable, while others require the person to live in the country where the company’s headquarters are located.  At the same time, the research created by Beerepoot & Hendriks (2013) found that BPO workers successfully implemented career self-management strategies to secure long term employment within the industry.

The implication of the above research is that business process outsourcing, as a generally used cost-reduction strategy disadvantages employees in the home country who have low skills. Therefore, those looking for increased job security need to engage in proactive learning and career progression strategies.

Addressing Labour Diversity through Motivation and Norms

One of the impacts of the outsourcing trends described above have an impact on labour diversity and companies’ ability to connect with and motivate employees. Bolton & Boyd (2003) evaluated the emotional aspects of managing employees. The main finding of the study is that the emotional settings of the organisation has an impact on the communication methods and effectiveness within the company. This statement is extremely relevant to the diverse workforce of today. Sweeney (2014, p. 15) found that “Work is a social activity and maintaining good relationship builds trust and helps people (individually and in teams) respond to the challenges they face”. Consequently, addressing and respecting diversity of global teams is a challenge for many organizations. Cultural differences, as well as variations of preferences and value systems affect the quality of relationships, as well as the effectiveness of communication and collaboration. Therefore, companies that engage in outsourcing and creating global skills, it is important to understand the culture of the target country, as well as government initiatives and employment legislation.

Globalisation and Changing Economies

Apart from employment and social trends, economic demands shape the course of globalisation, as well. Indeed, one of the main drivers of globalisation is companies’ and nations’ demand to create a competitive advantage. McMillan & Rodrik  (2011) state that developing economies have a large productivity disadvantage compared with developed countries. On the other hand, developing countries have more regulated labour markets, stricter policies, and higher property, labour, and energy costs. The demand for higher productivity and lower costs, as well as a competitive advantage was the main reason why many companies historically only operating in their home country decided to move their operations to overseas. According to McMillan & Rodrik (2011, p. 12), “globalization has exerted a significant impact on all developing nations”, therefore, the trends should not be examined from only one perspective. There is an active interaction between the developed and developing world. Not all the impacts of Western companies’ presence in Asia and Africa are negative. As the authors (McMillan & Rodrik) state, developed countries are not the only economic beneficiaries of globalisation. Indeed, the investments made in the developing country by the company can have a positive impact on the overall society. Introducing Western approaches towards productivity and utilization of technologies can help nations define their targets and improve their national companies’ processes. The overall labour productivity of the country can be increased through the presence of the Western organisation in the region, and this creates long term benefits for the country where the investment was made. Structural changes and ideological shifts can also create a more positive economic environment for the host country, promoting skills development, education, a and investment. Increased competition created by globalisation has also been one of the main drivers of productivity. As  McMillan & Rodrik (2011, p. 27) confirm: “firms that are exposed to foreign competition have had no choice but to either become more productive or shut down”.

Conclusion

The above review of literature and research regarding the impact of globalisation on the labour market, economic development, gender equality, social trends, and productivity has revealed that outsourcing operations and processes has the potential to drive growth, support regional development, and increase gender equalities. However, there are also some challenges associated with the globalisation of workforce, such as the need for addressing cultural and skills diversity, and engage with employees creating a culture and value system that engages and motivates workers.

Bibliography

Beerepoot, N., & Hendriks, M. (2013). Employability of offshore service sector workers in the Philippines: opportunities for upward labour mobility or dead-end jobs?. Work, Employment & Society, 0950017012469065.

Bolton, S. C., & Boyd, C. (2003). Trolley dolly or skilled emotion manager? Moving on from Hochschild’s Managed Heart. Work, Employment & Society,17(2), 289-308.

Douglas, S. P., & Wind, Y. (1987). The myth of globalization. Columbia Journal of World Business, 22(4), 19-29.

McMillan, M. S., & Rodrik, D. (2011). Globalization, structural change and productivity growth (No. w17143). National Bureau of Economic Research.

Standing, G. (1999). Global feminization through flexible labor: A theme revisited. World development, 27(3), 583-602.

Sweeney, E. (2014) Making work better: An agenda for government. Smith Institute.