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Avoiding Labor Shortages by Employer Signaling: On the Importance of Good Work Climate and Labor Relations

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  • Uschi Backes-Gellner
  • Simone N. Tuor

Abstract

Reversing the original signaling model, this study explains how employers signal the non-observable quality of their workplace and thereby reduce labor shortages. Based on a company data set of 204 German firms, the authors find, as predicted by their theory, that the existence of a works council, an apprenticeship training program, and a high-quality incumbent workforce significantly improves recruitment success because they all reliably signal appealing work places. At the same time, frequent hiring of workers with non-matching qualifications reduces recruitment success because it signals low-quality workplaces. The authors’ research reveals that certain aspects of labor relations and workplace characteristics exert a significant impact on recruitment success, which cannot be explained by conventional theoretical arguments.

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Bibliographic Info

Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 63 (2010)
Issue (Month): 2 (January)
Pages: 271-286

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Handle: RePEc:ilr:articl:v:63:y:2010:i:2:p:271-286

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References

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  1. Sonia Falconieri & Frédéric Palomino & József Sákovics, 2004. "Collective Versus Individual Sale of Television Rights in League Sports," Journal of the European Economic Association, MIT Press, vol. 2(5), pages 833-862, 09.
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  3. Mari Sako & Gregory Jackson, 2006. "Strategy meets institutions: The transformation of management-labor relations at Deutsche Telekom and NTT," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 59(3), pages 347-366, April.
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  5. Addison, John T. & Schank, Thorsten & Schnabel, Claus & Wagner, Joachim, 2005. "Do Works Councils Inhibit Investment?," IZA Discussion Papers 1473, Institute for the Study of Labor (IZA).
  6. Lutz Bellmann & Uwe Blien, 2001. "Wage curve analyses of establishment data from western Germany," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 54(4), pages 851-863, July.
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  10. Sloane, Peter J, 1971. "The Economics of Professional Football: The Football Club as a Utility Maximiser," Scottish Journal of Political Economy, Scottish Economic Society, vol. 18(2), pages 121-46, June.
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  12. John S. Heywood & Uwe Jirjahn, 2002. "Payment schemes and gender in Germany," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 56(1), pages 44-64, October.
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  17. repec:sae:jospec:v:1:y:2000:i:1:p:56-65 is not listed on IDEAS
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Citations

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Cited by:
  1. Jens Mohrenweiser, 2012. "Recruitment and Apprenticeship Training," Economics of Education Working Paper Series 0073, University of Zurich, Institute for Strategy and Business Economics (ISU).
  2. Simone Tuor & Uschi Backes-Gellner, 2009. "Time - Even More Costly Than Money: Training Costs of Workers and Firms," Economics of Education Working Paper Series 0046, University of Zurich, Institute for Strategy and Business Economics (ISU).
  3. Ben Kriechel & Samuel Muehlemann & Harald Pfeifer & Miriam Schuette, 2011. "Works councils, collective bargaining and apprenticeship training," Economics of Education Working Paper Series 0057, University of Zurich, Institute for Strategy and Business Economics (ISU).
  4. Hammermann, Andrea & Mohnen, Alwine, 2012. "Who Benefits from Benefits? Empirical Research on Tangible Incentives," IZA Discussion Papers 6284, Institute for the Study of Labor (IZA).
  5. Healy, Joshua & Mavromaras, Kostas G. & Sloane, Peter J., 2011. "Adjusting to Skill Shortages: Complexity and Consequences," IZA Discussion Papers 6097, Institute for the Study of Labor (IZA).

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