Labor markets: preventing rivalry and myopia through HRM

The purpose of this paper is to extend the concept of myopia and introduce the concept of labor market myopia (LMM), as well as the role that human resources management (HRM) plays in its prevention and resolution. LMM, a more specific form of factor market myopia (FMM), is a myopic view of labor needs. LMM is only going to increase as human capital becomes increasingly scarce due to labor shortages.

This conceptual review focuses on research on factor market rivalry (FMR) in the supply chain. Using three sample job categories, the concept of myopia is applied toward the human resources context to propose a new term describing a failure to consider future labor needs.

The authors position HRM/talent management as critical in preventing and addressing LMM at both firm and industry levels and the critical role of labor markets in FMR. HR strategies are suggested to prevent LMM include: expansion of the available workforce; increasing current workforce productivity, economic remedies like paying higher wages and proactively assessing and forecasting the current and future human resource capacity and needs.

Labor needs to be considered as a factor in the same realm of importance as other resources. The HR strategies discussed are key to preventing LMM and improving organizational performance and effectiveness.

The authors argue that organizations not only compete for resources downstream (i.e. customers and markets) but also upstream, such as with human resources. The authors introduced a new concept/term to frame the effect on organizations when supply chain planning and HR strategy do not take labor into consideration. This was accomplished by first narrowing the concept of marketing myopia to FMM, and in this conceptual paper, it was subsequently narrowed to introduce the term LMM.