SOAS Research Online

Abstract

This study focuses on the extent and adjustment to labour shortages in a large, publicly owned, Industrial holding company (INDECO) operating in an underdeveloped economy---Zambia---whose labour market experiences severe shortages of skilled manpower. In taking an empirical approach, we sought to test the applicability of the conventional labour market adjustment theory in the context of an underdeveloped economy. It is suggested that a systematic management of human resources through manpower planning can help to reduce the incidence of either labour shortages or surplus and thereby minimise the implied costs of either situation. We, therefore, sought to find out whether the concept of manpower planning has been adopted in INDECO and, if so, how it is viewed and practised and the problems which are encountered in its implementation. Evidence presented in this thesis suggests that skilled manpower shortages, as exemplified by recruitment difficulties and high labour turnover, are experienced in technical, engineering, accounting and managerial occupations. Skill deficiency problems also obtain among existing employees, especially those in direct production occupations. The causes of such shortages are historical, technical and institutional: colonial educational and labour policies; high demand from increased manufacturing activity after independence; inelastic supply; poor manpower utilization policies; and, for parastatal companies, a bureaucratic pay structure. In addition to reduced efficiency, the shortage of local skilled manpower have forced many companies to depend on expatriates. This is costly both in terms of foreign exchange and its distortional effects on the economic structure. While many companies favour increased supply (training) as the main adjustment instrument, the relatively cheaper forms of increasing supply (on-the-job and local training) are, however, underrated when compared to foreign training. In most companies manpower planning is synonymous with training and development. We attribute such a narrow view to the government's indi-genization policy, the lack of appropriate manpower planning skills, and that increasing supply may be the most effective way of adjusting to labour shortages. Implementing comprehensive manpower planning is also constrained by the bureaucratic pay structure, government intervention, foreign exchange problems, and, the lack of suitable manpower data. Given such constraints, we suggest some approaches to manpower planning which the INDECO companies could adopt.