Cost, skills, supply
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increased Globalisation → more competition in the marketplace globally
- ← managing HR is more complex
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Issues:
- high domestic labour costs
- a skills shortage
- → therefore, improving workplace productivity is essential
- the shortage is often blamed on the education system
- and importing cheap labour (& outsourcing)
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To overcome the skills shortage:
- ==Australia introduced the Temporary Work Visa== (Subclass 457)
- allows skilled migrants into Aus, sponsored for 4 years.
- ==Australia introduced the Temporary Work Visa== (Subclass 457)
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Australia’s higher living standards → expectations for better wages
- But businesses face additional entitlements and on-costs
- These higher labour costs → reduced Aus international competitiveness
- tempting businesses to restructure workforces with overseas outsourcing, via offshore subsidiaries (low labour costs and interest rates)
- a subsidiary is :: a company that is owned by another company (referred to as the parent) and it is often located in another country (offshore)
- tempting businesses to restructure workforces with overseas outsourcing, via offshore subsidiaries (low labour costs and interest rates)
-
China’s comparative advantage with secondary production
- → common outsourcing partner
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India serves as an outsourcing partner for basic accounting, legal & insurance work
- ← due to highly literate, skilled - and cheap - labour.