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Training and Hiring Strategies to Improve Firm Performance

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  • Maliranta, Mika
  • Asplund, Rita

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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Bibliographic Info

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: 2007
Date of revision:
Handle: RePEc:rif:dpaper:1105

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

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References

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Cited by:
  1. Jones, Derek & Kalmi, Panu & Kauhanen, Antti, 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.
  2. Hyytinen, Ari & Maliranta, Mika, 2011. "Firm Lifecycles and External Restructuring," Discussion Papers 1253, The Research Institute of the Finnish Economy.

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