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RSI - Executive Search Firm News | Company Newsletter, June 2011

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RSI Executive Search Firm Company Newsletter, June 2011

Issue: #31
Date: June 2011


Newsletter: Employment and Productivity Enhancement PDF Version
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This Month in the RSI Newsletter
» Employment and Productivity Enhancement

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Employment and Productivity Enhancement

With technology evolving every day, the world is quickly changing. People are being replaced with machines, which are therefore enhancing productivity and profits. The opposite seems to be happening with sectors where there is an increase in employment. With more people employed, the productivity is going down. Although it may look like increasing productivity in the workspace causes lower employment in the United States, many argue that this is not the case.

The Arguments at Hand

The relationship between employment and productivity is a popular issue to debate. Some people believe that the lowering of employment in the United States over the past few years, or even decade, is not because of higher productivity growth within the country. Instead, people are thinking that it may have something to do with higher productivity growth and more declines in price with foreign companies that compete against companies in the United States. For foreign companies, especially in China, productivity is rising and costs are declining faster than in the United States.


 

 


Continued...

During the recession, many companies laid-off employees and now that the economy is bouncing back, these same companies are hesitant in hiring again. Although some workers struggled with completing double the work they were hired to do, they felt lucky to have jobs and consistent paychecks. Many companies came up with more cost efficient ways to run their businesses and found avenues where they could do more with less. Throughout United States history, companies generally hung onto their employees, even through the rough times. Employees were kept on the payroll, which did not help productivity.

William Nordhaus, a researcher for NBER (National Bureau of Economic Research) stated that, “For individual companies or industries, higher productivity growth may lead to a loss of jobs.” He cited the example of the “decline in employment in the typewriter manufacturing industry following the advent of the personal computer. But from the perspective of manufacturing as a whole, or of major manufacturing industries, the lower prices that result from higher productivity have increased demand growth and more than offset the employment-lowering effect of higher productivity.”

 


Continued...

An Ongoing Issue

Overall, the issue of employment and productivity enhancement is an ongoing debate for researchers and analysts in the United States and around the world. Although this is the case, most people believe (and can come to a consensus) that productivity will not harm or cause a massive explosion in unemployment. The recession has caused much to go wrong, yet it has also helped companies discover ways to become more efficient and smart with where they are spending their money.

 

 

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