Ageing work force in several countries is one major challenge for the labour market. With labour force growth slowing down, and retirement age of existing labour force nearing, countries where manufacturing is prominent part of the economy are struggling to maintain the pace of the production. This factor has impacted the labour market to a great extent. Labour cost is also growing gradually which has increased the operational cost for a company.
Change in technology has several impacts on the way labour market has changed. For example, industries which were based on the concept of mass production have now been broken down in smaller production units through efficient use of modern technologies. This has severely impacted the labour force and their utilization. Organisations on other hand, are trying to reduce their dependence on labour market as much as possible. They are doing this through inclusion of technology in their production system. Another major impact of the technological change on the labour market has been that it has created demand for highly skilled class of labours, as compared to low skilled workforce which was dominant in mass production based system. This skill inequality has also created a wage difference among various categories of the workforce.
Rapid globalization has also impacted the labour market to a great extent. Today organisations are working towards building a business which is effective in terms of cost and economy. Due to this reason, organisations operating at global level, using technology to rationalize their work force structure. Globalization has also increased mobility of workforce today. Skilled, as well as unskilled labours are migrating to different countries in search of work. Although various regulations and laws have been implemented to govern these migrations, still there is major impact of globalization on the labour market.