Novikova Olha, senior lecturer of the department of Economics and entrepreneurship, Sumy National Agrarian University, Ukraine

ORCID ID: 0000-0002-6999-9268
e-mail: novikova.css@gmail.com

Principles and Priorities of Labor Potential Management at the Enterprise

Abstract. Introduction. Labor potential constitutes an integral, important part of the potential of the company, being an attribute parameter, which predetermines the competitive success of the company either by accelerating it or leading to a complete failure in case of poor management.

Purpose. to redefine the definition and role of the labor potential in the company, their characteristics, and the main principles of development. Clarify the most essential characteristics of the employees, who are the key elements of labor potential for the employer, and preferences of the management to different methods of treating them in case of poor performance.

Results. Major characteristics of the labor potential were outlined. According to the survey provided at SMEs in Ukraine, employers put higher rank to professional skills, experience in the company, loyalty and dedication, prior experience in the sphere, qualifications obtained through formal education, ability to work in a team and cooperate. Less importance was assigned to psychological traits, temper, physical characteristics, health, physical strength, and marital status, family, moral principles. In the case of poor performance, 16% of the managers declared their desire to fire the worker but the real rate of termination of the employment amounted to 31.6% in 2018.

Conclusions. Labor potential of the enterprise is a critical element of the company’s potential due to the unique role in the economic activity, it can easily facilitate the increase of profit or otherwise lead a company to bankruptcy. It depends on a range of objective and subjective factors which include personal characteristics of the workers and their ability to cooperate and are strongly connected with material and information supply. Many of the components can be enhanced without the change of personnel composition through the training and self-improvement. But this will only happen if the company follows the correct principles and set distinct goals. Nevertheless, in the case of poor performance managers will consider layoffs with subsequent recruitment as a possible option with more than 30% of employees being fired during the year on average. Employee retention should be considered as strategic imperative and resources should be allocated for that.

Keywords: labor potential; human resource; turnover ratio; enterprise potential; personnel characteristics; principles of labor potential formation.

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