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Training and Hiring Strategies to Improve Firm Performance

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Author Info
Mika Maliranta
Rita Asplund

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Abstract

ABSTRACT : We study how upgrading the skills of the personnel affects a firm’s performance. Two different strategies are examined : 1) providing formal training and 2) strategic recruitment and separation policy. The use of register-based longitudinal employer-employee data supplemented with a survey on vocational training provides an opportunity to shed fresh light on the issue and allows us to address the usual econometric problems. We find that internally (but not externally) organized training stimulates subsequent growth of performance but only when combined with the implementation of new process or product technology. Hiring highly skilled workers is initially costly to firms but is productivity-enhancing in the long run.

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Paper provided by The Research Institute of the Finnish Economy in its series Discussion Papers with number 1105.

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Length: 45 pages
Date of creation: 16 Nov 2007
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Handle: RePEc:rif:dpaper:1105

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Related research
Keywords: productivity; profitability; training; education; hiring;

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Find related papers by JEL classification:
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
M5 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics
O3 - Economic Development, Technological Change, and Growth - - Technological Change
D2 - Microeconomics - - Production and Organizations

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Derek Jones & Panu -Kauhanen Kalmi, 2009. "The Effects of General and Firm-Spesific Training on Wages and Performance: Evidence from Banking," Discussion Papers 1184, The Research Institute of the Finnish Economy. [Downloadable!]
  2. Antti Lönnqvist, 2007. "Intellectual Capital and Productivity: Identification and the Measurement of the Relationship at Company-level," Discussion Papers 1108, The Research Institute of the Finnish Economy. [Downloadable!]
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