Financial Principles and Techniques Report - Semester 1

This report focuses on managing financial principles, specifically addressing the issue of labor shortages within an organization. It explores various strategies to mitigate the impact of labor scarcity, including the implementation of alternative solutions, fostering a safe and eco-friendly work environment to enhance employee retention, and providing incentives for high performance. The report also suggests outsourcing production to reduce the workload and costs, relocating production facilities to diversify labor needs, and utilizing existing employees for extra work. Additionally, it highlights the importance of innovation, training programs, and strategic labor planning to effectively manage and overcome labor shortages, providing a comprehensive overview of the challenges and potential solutions in the financial context.

Running Head: Managing Financial Principles 1
Managing Financial Principles and Techniques
Student Name
3/5/2020

Running Head: Managing Financial Principles 2
Question (ii)
Answer:
Labour Shortage is a huge problem that every organization is facing. The reduced income growth
has caused the shortage of labour and this affects organization as well as the economy. There are
direct effects of labor deficiency on the profitability of an organization. The organization must
adopt structural changes to diminish labour scarcity. However, there are some steps which can
address the issue of labour shortage in an organization are as follows:
 The organization must focus on alternatives to replace labour needs. There are many
other substitutes available in the market therefore, the organization should search for
them.
 Create a healthy and safe environment to engage more employees, a safe and eco-friendly
environment will increase more employees’ retention and will lead to improvements in
the profitability of an organization. Moreover, an eco-friendly workplace will make
workers comfortable in their work.
 At regular intervals, an organization should appreciate their employees with rewards or
incentives for their performances. This will motivate employees and they will perform
their best. This is the best strategy to retain an employee for a longer period.
 Managers should outsource the production to a third party or outsiders. This will reduce
the workload in an organization and will make employees relax. Also, there will be no
burden on the hands of employees and they will free. The outsourcing of production will
estimate low cost which means profit will increase (Bateman, and Weiss, 2017).
 Moreover, an organization can relocate its production structure at some other place. This
will diversify the work into many other places. Thus, at each place, the requirement of
labour will be minimized and this will lead to smooth and fast work.
 The organization should utilize its existing workers for extra work by paying them an
extra amount. The already trained workers will work more efficiently instead of new
workers therefore; work will be conducted effectively and efficiently.
 The organization should explore different avenues and ways to manage things. There are
high complexities in working conditions therefore, the organization must try new things

Running Head: Managing Financial Principles 3
and should innovate new methods to operate projects. They should divert towards
different ways and methods to complete the operations.
 Establish training programs to train employees. An organization should launch training
and orientation programs to introduce new employees with their work and give them
knowledge. This will provide employees concise information and encourages them.
Moreover, it will help in improving the retention ratio of workers.
 Furthermore, the organization must prioritize strategic labour planning as it will
anticipate the current and future requirements and also will aid in meeting the goals of the
business. Organizations having a proper plan and strategy for its labour will not face this
much scarcity of labour (Ayentimi, Burgess, and Dayaram, 2018).

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References
Ayentimi, D.T., Burgess, J. and Dayaram, K. (2018) Skilled labour shortage: a qualitative study
of Ghana’s training and apprenticeship system. Human Resource Development
International, 21(5), pp.406-424.
Bateman, F. and Weiss, T. (2017) A deplorable scarcity: the failure of industrialization in the
slave economy. United States: UNC Press Books.
Joshi, A.T. (2019) Status of agriculture labour scarcity in North Eastern Karnataka. International
Research Journal of Agricultural Economics and Statistics, 10(1), pp.108-114.