The labor market, usually referred to as the job market, is concerned with the supply and demand of labor, with the supply being provided by the employees and the demand coming from the employers.
It is an important part of every economy and is intimately related to the markets for commodities, services, and finance.
When the supply of jobs is low, the demand for jobs increases, and each position has many candidates that are interested in the same job.
When there are a lot of jobs available, the demand for each job decreases, so there might only be a handful of candidates for an individual job opening or none at all.
The labor market is crucial to an economy that runs smoothly. The labor market is the source of all the products and services offered to consumers. There might also be a lack of goods or services if there is a labor shortage.
When the labor market doesn't have many jobs compared to the number of people who want jobs, it causes a shortage. This can be a good thing for employers because they will get a better choice of workers as well as be able to limit benefits and salaries.
The external labor market is where people get hired and interviewed from outside the company. When a person is submitting resumes to different companies, they are participating in the external labor market.
The internal labor market is the labor force that currently works within a company and is looking to move up, down or laterally within the company.
In order to decide how much to pay for a position as well as how to evaluate, recruit, and advertise for candidates, a corporation will do a labor market analysis.
Many of the analysis is done through surveys that target the labor segment that applies to the company or to the area of the company for which they're staffing.