Labor Relations Recommendations

Introduction

This research paper is based on the analysis of labor statistics from various countries. This analysis is essential in recommending an overseas manufacturing site for a selected company. The company of my choice is known as Compass Components, Inc., and I have chosen it for the presentation of overseas expansion with a particular focus on three countries. These countries include Philippines, Taiwan, and Japan. Typically, the countries are recognized as the popular sites for electronic manufacturing. These countries, labor relations are compared against the United States. It is worth noting that electronic manufacturing is one of the Compass Components’ major objective. The most recent data was collected from International Labor Organization (ILO) regarding each country’s labor force, average monthly earnings, unemployment rate, employment –to-population rate, fatal injuries and social security benefits per a hundred thousand employed persons, and hours worked per and individual per week. The data obtained is shown in the table below.   

(ILO, 2017)

In the competitive business environment, business organizations tend to look for cheap and affordable labor so that they can effectively carry out their operations at minimum operations costs. This practice helps any business organization to perform the assigned tasks while ensuring that the desired outcome that meets the market demand is achieved. Notably, many countries across the world provide a number of investment opportunities, but the majority of investors tend to be reluctant in investing in some those countries due to the unfavorable labor forces and business policies in such countries.  Therefore, business companies always look for the business-favoring policies that to effectively and conveniently undertake their business activities.  Most of the companies strive hard in flowing and adhering to the labor rules as established in the international market. Following the labor rules helps in promoting in promoting the business activities and operations in the host countries, hence making the business more effective. 

With regards to the to the applicable business policies and labor rates in japan, Taiwan, and Philippines, Compass Components Inc. is likely to expand its operations to a country with favorable conditions. Selecting a country with cheaper labor rates can definitely help Compass Components Inc. to increase its business opportunities in the selected country. As the manufacturing industry plays a vital role in the development of a business organization, the country that appears to have a higher manufacturing rate can help Compass Components Inc. to meet the people’s growing demands in the market, as well as achieving a competitive advantage. 

Organizational Management Recommendations

According to the data ILO data obtained from Taiwan, japan, and Philippines, the countries have a significant number of similarities and differences across the board.  Labor cost, working time, and unemployment rates are the key data points that will be reviewed and help in determining the optimal location for the selected company. While Japan and Taiwan are 3.1 percent and 3.9 percent respectively at unemployment rate, Philippines is at 2.7 percent.  The working hours’ data for Taiwan is not provided. Japan’s working rate averages at thirty-nine hours per week for each working person. Working hours in Philippines averages at forty-two hours per week for every working person. The average monthly earnings of employees in japan is 393,000 Japanese Yen. This amount is equivalent to the monthly earning of $3,506.35 in the manufacturing industry. The average monthly earnings of employees in Philippines is 8990 (local currency). This indicates that labor costs in Philippines are relatively lower in Philippines than in japan Taiwan’s average monthly earnings of employees are not indicated. Labor force factor in Philippines, Taiwan, and japan is 61.5, 58.7, and 60.0 respectively.  This indicator that Philippines has a favoring advantage over the other countries. 

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Oversea seas Labor solution

With regards to the labor cost, it is quite beneficial to move manufacturing from either plaint situated at New Mexico or California to the Philippines. The Trade Union Density (TUD) rate is at 8.5 percent compared to the Japan’s 17.8 percent. 

Proposal

A well-elaborated PowerPoint presentation document has been prepared for the proposal. 

Resolve Business Needs

It is necessary to use various Human Resource strategies in resolving business needs to help in minimizing labor costs while ensuring high workforce efficiency and a high employee retention rate. Low labor costs enable an organization to commit some money to benefits. The social security in Philippines is 0.00, and this implies that if the Compass Inc. will provide some social benefits in the area, it would help gaining a significant advantage to the existing companies. As a result, the company would attract more and qualified employees that will play an important role in achieving the company’s objective. Obtaining a qualified staff reduces the company’s training costs as the employees are already experienced in their field of operation.  

Management Decision-Making

The analysis of the key data points clearly shows that the Philippines is the best option of the three countries. Youth participation is rated 42.7 percent, which is lower than Taiwan and Japan.  However, there is no significant data for Taiwan to support or make any suggestion. Moreover, it is much easier to relocate some of the staff members to Philippines because section 9 (g) of the US’ Immigration Act provides that foreigners can freely move and work in Philippines or engage in any ancome-generating activity. With regards to this, the US embassy has given priority in issuing a work visa to people relocating overseas.   

The decision to select Philippines as the best option among the three countries is influenced by a number of reasons. Philippines provides a great support to overseas investors and customers so that they can invest in the country. Being one of the countries that are densely populated, labor costs tend to be relatively lower than Taiwan and Japan because human labor can be easily accessed. Business policies are also favorable and this provides overseas investors with more benefits. In the same way, Philippines offers products at cheaper rates as compared to Taiwan and Japan. This makes operational costs in the country to be relatively lower. 

Conclusion

The analysis of data obtained from ILO website regarding Taiwan, Japan, and Philippines shows that Philippines is the best option for relocating overseas. However, it is highly recommended to carry out multiple site visits to obtain more and the most recent data to help in making appropriate decisions that best suits the company. In this case, Philippines provides suitable labor conditions for relocation.