Factors Affecting My Demand for Labor
One of the factors that could affect my demand for labor is a change in the demand of the output. The reasoning here is that if the demand for the output or final product increases, the output’s price shall also follow suit and increase and in that regard, my firm would have to hire a higher number of workers to produce the extra demanded units of the product.Further, the profits will be enhanced due to two main things i.e. the higher quantity of the final product sold and secondly, the higher margins realized as a result of an increase in the price of the output. Essentially, with the increase in profits, the firm shall be able to sustain an additional number of workers who shall be hired to work on or complete the additional units to be produced.
Further, this has an effect of shifting the labor demand curve rightwards (Parkin 2008). The other factor that would affect my demand for labor is the availability of cheap labor. When labor is cheap, this essentially means that I can hire more employees at low cost and hence it’s more economical for my firm to maintain a higher number of employees.
Effects of an increase in the price of a good or service on demand for labor
If the market price of the good or service that my firm produces increases, my demand for labor would increase. Essentially an increase in the market price of the goods and services shall be informed by an increase in the demand of the same in the market. In that case, I would need more workers so as to produce more units to satisfy the raising demand of the output. Similarly, the increase in the price of the output could have an impact on the profitability of my firm. The impact in this case is positive. That is, an increase in the price of the output would mean a higher margin for each unit sold and hence more profit.
Secondly, an increase in the price of the goods and services as a result of an increase in demand would mean that more goods are bought and hence the benefits of economies of scale. Higher profits in this case shall be able to sustain a bigger workforce and hence this is the other reason why an increase in the market price of the good my firm produces would inform an increase in my demand for labor.
Specific skills and capabilities my workers should process
The specific skills my workers should have are many and varied. First, we have the technical skills which essentially mean they can be able to produce superior goods and services for my firm to remain relevant in the marketplace.
Secondly, they should have people skills, that is, they should be able to elate well with all the stakeholders with whom he firm interacts with including customers and clients, suppliers as well as regulators. This will go a long way to enhance the relationship of my form with the various stakeholders and hence amongst other benefits; attain customer royalty and be able to negotiate for better deals with suppliers etc.
Parkin, M. (2008). Economics. Pearson Addison-Wesley