Hiring_of_Temporary_Workers

Hermina Williams Hiring of Temporary Workers Professor Ruizhen Hardin Bus640 Managerial Economics January 1, 2012 Hiring of Temporary Workers A company should hire new workers to handle increased demand for products. This is so because hiring temporary workers reduces efficiency as a result of job instability. I have worked as a temporary employee at Raytheon since 2004 before becoming a permanent employee, and it was extremely difficult wondering each week if my job was going to continue or end. Employees are hardly guaranteed earning a basic pay at the end of the month and also fail to receive allowances accredited to permanent employees. This means that workers are less likely to take their work seriously due to the fear of losing their jobs anytime without consideration. At this rate, employees, tend to seek job opportunities elsewhere to sustain them. As a result, the workers may be unavailable when needed most to perform their duties at the company. Investments are made through allocation of a specific amount of money to be given out. The workers are released and given a chance to engage in other activities. It is also is a great method of saving for the company. This is also a motivation for the workers to realize that their hard work would be greatly rewarded upon completion of tasks. Their time is considerable consumed and they hardly feel denied because their expectations are low unlike those who are permanently employed. Research Question What are the intricacies involved in hiring temporary workers in response to demand in the company' This research will be concerned with performing an analysis of the advantages and disadvantages of hiring temporary workers according to demand. In addition, it will consist of analysis of the job environment as a way of providing good working conditions for the employees. Analysis of the managerial question, as well as an evaluation of opportunities and alternatives The managerial department is the highest level of management in any given company. It comprises of the managers as well as the board of governors. In consideration of whether to hire when there is demand for products or temporary workers, the managerial team ought to have a meeting where they discuss the availability of resources internally. The management level of a company keeps records of the cash flow and the total number of employees within the organization. It also records the amount of work to be done within the organization and the duration of time it would take to complete various tasks. With this kind of information, the management team is able to estimate whether there is enough money to pay hired workers to seek for other alternative to facilitate the process. The management team is also able to analyze the quantity of resources and raw materials required for the completion of a specific task. Notably, at specific times, there is a great demand for products manufactured by a certain company. Considerably, such a company would be aware of the fact that internally, it would be impossible for the available manpower to handle all the work. It is upon such predicament that the need to hire a few more workers for labor purpose would be greatly critical. The hired workers are mostly likely to be paid out the accumulated profits during the high season when they were hired. Nevertheless, their contract with the company would automatically end upon the end to high season. The managerial team should also come up with a short training program for the new workers so that quality results are achieved. This is so as to furnish them with enough information regarding the task at hand. However some companies may realize that they are incapable of providing an appropriate work environment for the workers and so opt to work with their current employees even when demand is high. This would force them to work overtime to achieve their intended results (Bell, 1987). Factors or costs that will influence the analysis of the questions Opportunity cost What do we mean when we talk about the cost of something' Isn’t it what we must give up—must forgo—to get that thing' The opportunity cost of the chosen item or activity is the value of the best alternative that is foregone. This is the main basis of benefit and cost of economic reasoning. It is the cost of the chosen activity weighed against the benefits of the sacrificed of the best next option to the chosen activity. It is the approximated value of the next best option that is a cost, because in selecting one thing, one is evaluating another choice. With regard to the research question, the best choice would be to hire workers when the demand is high, but the next alternative would be to hire temporary workers. A production possibility curve It measures the highest collection of outputs that can be attained from a specific number of inputs. It brings out the fact that there is a limit to what one can attain, given the current technology and resources, and that every decision made has an opportunity cost. One can acquire more of something only by sacrificing something else. By the company giving up some of their money, they would ensure that there is a higher investment of manpower that will make labor easier. This would improve efficiency and guarantee better quality results. Sacrifices have to be made to create better results and every company should focus on being able to use much to get good results that will push them higher. The law of one price This involves the wages of the same rank of workers in a specific nation, which would be indifferent from the wages of another nation. This law is all about sub standard prices that have been set generally, and employers know that whether they hire temporarily or on demand, the pay is the same. Workers therefore know what to expect and employees have the option to go for any choice (Edward, 2000). The law of supply As the price rises, considering all other factors are held constant, the supply in quantity also rises. There is therefore an immediate relationship between the quantity supplied and the price. As price falls, quantity supplied falls as well. When all other factors are held constant, higher profits are guaranteed due to higher prices. Changes in input prices spent in production of goods, states that if the profits go down then costs would have gone up. This is a major risk for the company. In making investment for new workers, the company is at a risk of spending money they may be incapable of compensating. This would cost the company a lot, in case of losses, and it is therefore crucial for the company to do enough research and analysis internally, to ensure that they are ready to take that step. Increasing marginal opportunity cost This notes that for one to attain the most of something there would be giving up of increasing quantities of something else. During production, there is a requirement of efficiency, which means attaining as much output as one possibly can from a particular number of resources or inputs. Efficiency involves accomplishing a target with as little as possible. To ensure efficiency for the hired workers, the company should be ready to invest in them and treat them as resources. They should be trained and given the right working conditions for them to deliver quality results. If the company decides to hire, then they should work towards realizing the worth of it, and ensure that the workers are attended to. The law of demand The prices fall when the quantity demanded rises, when all factors are held constant. There is an opposite relationship between the quantity demanded and the price. In the alternative of the fall of quantity demanded, a fall of prices is experienced. People are unlikely to buy goods whose prices have gone up. If a consumer hopes for his income to rise, he may spend less now, and later spend more. This means that if there is a high demand for a product; a company should ensure by all means that the product is readily available in the right time. A high demand means that consumers have the money to purchase and therefore the company should hire as many employees as possible to ensure the work is done. Changes in taxes and subsidies to suppliers As taxes go up, then profits would decrease because of high costs, which would lead to a reduction of output for the suppliers. If subsidies by government increase, there will be a reduction of costs and a rise in profits, resulting to an increase in supplier output. The company would have to look into the tax system of the particular country to analyze how much they are willing to invest. High taxes would eventually reduce profits forcing the company to work within their current budgetary estimates. Equilibrium price This states that the pressure put on prices on the higher side, is precisely offset by the pressure on prices on the lower side. It involves the total amount sold and bought at an optimum price. If the quantity demanded is less than the quantity supplied, prices decrease, if quantity supplied is less than the quantity demanded then the prices increase. If the company tends to hire more workers than the labor involved, then work will be done but extra payments will be made causing a loss. Intervention in the market by government An imposed limit on how high a price chargeable is known as the price ceiling. A price ceiling on rents is known as the rent control and is set by governments. It is to be applied on the charge of rents. Failure to do so may cause some of the construction projects to be stopped. The government also imposes limits on landlords and how they should charge. A price floor on wages is also set to control employers and the amount of wages they should give. This would cause sensitivity to the managerial team, in coming up with a plan on how much should be set aside to pay the hired workers (Laurence, 1998). A rise in income causes a rise in demand for specific products This leads to a rise in the level of profits. This would make it easy for the company to take the initiative of hiring to come up with the products in a quick way so that, consumers do a purchase when the income levels are still high. How factors or costs are to be measured and the values used to do the analysis By forecasting economic activity In this case conclusions and assumptions are related. This means that every move taken by the company may cause a future consequence. An analysis is done on the level of supply and demand as per the target market, and a conclusion is deducted by telling whether profits would be made or losses encountered. Proposing economic policy to innovate future economic activity This involves an analysis of the future of the business. Some of the long term goals the company has are reviewed and discussed. The required resources for a certain task are set aside and the company finds options of acquiring them so that they are useful in the future. Predictive models in finance This is all about the financial plan of a specific company. Profits and losses experienced are written down and accounted for. With the profits at hand, the company is able to plan for the future and see what requires investment so that money is allocated to the new projects. In case of losses, some of the tasks to be embarked on are delayed and given attention later. A financial review of the company’s performance is critical if any planning is to be done. Planning and allocation In the case of management logistics and centrally planned economies and businesses, the company is able to predict the little details needed to enhance growth and success. The managerial team is criticized for any shortcomings, and those with poor performance are declared redundant. Active members are promoted as every department is allocated more resources and money to perform their tasks in a better way (Anderson 2008). Presenting arguments to politically justify economic policies at the national level This is to explain and influence company strategy at the level of the firm, or to provide intelligent advice for household economic decisions at the level of households. The company is allowed to seek professional advice from outside, for them to improve standards and have efficiency. Political stability is also analyzed and the future of the political outcomes in the particular country predicted in order to know how safe it is to make more investments. Applying economic reasoning enables one to make deductions that are effective and meaningful. Economic predictions in the future may be affected by several factors that would make the current assumptions unpredictable. Issues like increased taxes or the government setting price controls may affect the profits that the company would have predicted to make. Political instability may also arise and unpredictable clashes develop which would be a threat to the businesses and might cost them huge losses. Natural calamities like, earthquakes, floods or fires may cause a destruction of property and this would leave the company stranded. Some of the situations are unexpected and are beyond human control. On the same issue of economic reasoning, some of the profits that the company might have predicted to attain in the future could be affected by several factors. Some of the workers would experience redundancy due to lack of work in a specific season and this would cause losses for the company. As a result, some of the projects that were to be established could fail to. The levels of income amongst consumers could decrease, causing them to lower the purchase of some products, and this would cost the company and distract them from achieving a positive economic reasoning. Economic concepts Factors of production These comprises of land, which involves climate, weather patterns, topography, water and vegetation. The other factor is labor which involves manpower available to perform a specific purpose. Capital is also one of the factors without which no company can commence. These three factors determine whether one has the capability of starting any specific institution. Capital is required to purchase various things that would be necessary for the running of the business as well as pay those involved in running errands for the company. Manpower ensures that the goals are achieved within a specific period of time. Without people, no work can be done therefore results are unattainable. Land is important because this is where the business premise is established and structured, and a good working environment is provided (Harper, 2001). In conclusion, there are several factors that ought to be put in place for a company to be well established. Factors of production should be considered. In addition, the managerial team should come together and find sources of capital to establish the company. In the case of workers, the company can decide to have a maximum number of employees on a permanent basis where there is a basic pay, but on high demand of work, the company can either choose to have temporary workers, or hire for the task to be completed then later remain with a manageable number of employees within their business plan. In general investing in employees as resources ensures efficiency and quality results. References Bell, C. (1987). "Development economics." The New Palgrave: A Dictionary of Economics, v. 1, pp. 818–26. Edward, P. (2000). "Economic Imperialism." Quarterly Journal Economics, v. no 115, p. 99–146. Laurence, R. (1998). "Introduction to the Economics of Religion." Journal of Economic Literature, v 3, pp. 1465–1495. Anderson, E. (2008). "International trade theory." The New Palgrave Dictionary of Economics, 2nd Edition, p 71-73. Harper, D. (November 2001). Online Etymology Dictionary – Economy. New York: Cambridge publishers.