Leading the Labour Market by the Laws of Supply and Demand

Our paper aimed at revealing and pinpointing the fact that labour market is guided and led by the laws of supply and demand. Moreover, it postulates on a quite obvious fact that the relationship between employers and employees is correlated with the relationship among consumers and producers. Consequently, there is a contract system in any organization or a business company that represents a written obligatory document binding by law which exposes the relationship among an employee and her or his employer. We show that a well-balanced and a healthy labour market is based on thorough and transparent competition as well as on the good and symbiotic relationships between the employer and employee. Human Resource Management (HRM) represents a leading tool in balancing these relationships and creating a win-win situation for both parties of this contract. Our results might be helpful for HRM specialists, business owners as well as state officials and stakeholders who seek to establish sound labour market rules and regulations in order to enhance social cohesion, wealth, well-being and economic development.