ABSTRACT
In this chapter the process of adjustment to labor market imbalance is examined. Both technological change and tightening labor markets pose essentially the same adjustment problem for internal labor markets. To an enterprise attempting to maintain a balance between its staffing requirements and the skills available on the external labor market, technological change is largely an exogenous factor affecting internal labor requirements; tightening labor markets are an exogenous change in the external availability of labor. In either case, manpower adjustment policies must be implemented to maintain a reasonably efficient balance between the internal and the external labor markets. Manpower adjustment policies are discussed in this chapter in terms of the problems posed by a tightening market, but the analysis can be generalized to include problems of adjustment to technological change. 1 Most of the materials relate to enterprise internal markets for blue-collar personnel. Except where indicated, the discussion is not necessarily applicable to other types of internal markets.
