One thing is obvious, everybody working is not in the same market. If they were, then everyone could move into any job which is clearly not true. There are many divisions within the overall labour market and it is worthwhile seeing these divi- sions so that we can understand patterns of mobility and recruitment opportunities and constraints.
So far, the emphasis of this analysis has been on what goes on in the unit and this is an appropriate starting point to understand segmentation in the actual labour market. Already we have suggested that there are two types of job in the unit - skilled and unskilled. This division suggests that the market may have a dual character with a primary and a secondary sector. Primary markets are usually described as requiring edu- cation, having careers and being well paid in contrast to sec- ondary markets which contain jobs not careers, low levels of attachment, plenty of mobility and low pay. This picture does not quite fit the hotel and catering industry, but there are cer- tainly two markets.
The skill model suggests a hierarchy of skills within the unit and a hierarchy of units. In such circumstances one would expect the skilled to be paid more than the unskilled in each unit and the skilled to be paid more the higher the unit in the hierarchy. The factor which determines the pay differentials between skilled staff is the level of service, that is the level of
skill demanded by the customers’ ability to pay. This factor is crucial to understanding the relationship between the two markets. If, for some reason, customers demand a lower quality product, then the skills required would be less. This would tempt management to de-skill the job which means that they would then recruit in the lower, cheaper secondary market. In other words, the proportional size of the two markets is depen- dent on the tastes and ability to pay of customers.
By far the strongest influence on segmentation is the func- tional or occupational rigidity within the unit. While most skilled jobs require a period of training it is, therefore, reason- able for people to want to recoup their investment by staying in the occupation. What is surprising is that occupational rigidity also applies to unskilled jobs. The effect of this is to make those who want to change their occupation compete in the external market where there is likely to be a surplus supply anyway. It simply keeps people in one job type.
The important question of the division of the market by social hours has already been discussed, but its contribution is mainly in inducing mobility. There are three major ways in which hotel and catering labour markets can be segmented as shown in Figure 17.5.
Finer graduations of these divisions and their practical implications will be discussed in Chapter 12 on recruitment.
Social hours
Summary
Unsocial hours
m
k
Skilled Unskilled
I
OccupationsI
U z a
Figure 17.5
influences on the rate of pay and pay differentials (Figures 17.6 and 17.7).
0 The likelihood of a surplus supply caused by the high pro-
0 The need for short-term adjustment in labour supply con-
0 The ample opportunities available to de-skill labour with or
0 The opportunity to use mobility to accumulate skills.
0 The supply of skilled labour from vocational education.
The transferability of skills between sectors of the industry
0 As productivity is not related to job tenure, there is no
0 Promotion opportunities are an alternative reward system to portion of unskilled labour required.
necting earnings rather than pay to demand.
without technological substitution.
with different employment conditions.
incentive to reward long service.
Pay.
Figure 17.6 Influences on the rate of pay
Levels of service - pay differentials are created by skill dif- ferentials which follow directly from levels of service demanded by consumers.
0 Functional or occupational rigidity - apparently operating for both skilled and unskilled labour. If there is a weak inter- nal labour market people are forced out on to the external market where segmentation reinforces the differentials.
For all types of work, personal effort and character actually count producing individual differences.
0 Different training and education duration for different occupations.
~~ ~ ~~~
Figure 17.7 Influences on pay differentials
One thing is clear from the analysis of pay influences and the skill model and that is that the economic interests of each unit conflict with the overall skill need of the industry. It has been
argued that in all but a few circumstances it is in the interests of management to form weak internal labour markets. That being so, skill development is left to either vocational educa- tion or mobility around the hierarchically-structured units.
Figure 17.8 conceptualizes the motives for forming a type of internal labour market and the consequent effect on the exter- nal labour market.
~
Influence towards weak internal labour market (ILM) Fluctuating consumer demand.
High proportion of unskilled workers.
Surplus supply of unskilled workers.
Influence towards strong ILM
0 Skill shortage created by consumer demand (de-
0 High proportion of skilled to unskilled workers.
Long duration for unskilled training.
skilling not an option).
Consequent behavioural characteristics of external labour market (ELM)
0 High labour turnover.
0 Skills accumulation mobility.
0 Wide distribution of pay.
0 Dependency on vocational education for basic skills
training. cn
t;
Consequent behavioural characteristics of ELM
3
Low labour turnover. CT
0 Greater differential between skilled and unskilled labour.
Low dependency on vocational education.
Greater unionization.
Y K
3
3
P
Figure 17.8
J W