Labor market impacts and human resource management practices: Croatian manufacturing companies perspective

The purpose of this paper is to examine how impacts from the labour market affect human resource management (HRM) practices in Croatian manufacturing companies. The goal of this paper was to find out do companies acknowledge labour market impacts; with what intensity mentioned impacts are related to HRM practices and do companies have developed practices of dealing with such issues. The research was conducted during 2021 and 2022 on the sample of 31 large Croatian manufacturing companies. Four labour market impacts were observed: population ageing, deficiency of vocationally educated employees, deficiency of highly educated employees in specific deficit occupations, automation and robotization, and young employees’ characteristics. The results showed that the companies did not acknowledge the presence of these impacts and/or did not react adequately to them by specially designed HRM practices. Since the research on relationship between labour market impacts and HRM practices are rare in the Croatian context, and wider, the insights of this paper could be a unique contribution to new knowledge enhancement. This paper showed that the companies’ acknowledgment of certain negative labour market impacts was poor and accordingly have undeveloped strategic HRM. The stated results are not in accordance with the theoretical assumptions and data on the unfavourable impacts from the labour market in Croatia. A pro-active approach of companies was expected in the application of various activities available to them, in the form of their independent practices, and in the use of stimulating legislation, which was also not determined by the results of this research. The reasons for this should be determined by some future research, with the expectation that there have been some recent changes in this area. The small research sample oriented only on one industry and only one country is the first research limitation. Additional limitation is the self-created questionnaire and self-reported measures. The cross-sectional analysis is also a research limitation. The awareness of these limitations could be additional base for further research in order to clarify the meaning and importance of strategic HRM.