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The monetary value of competencies: A novel method and case study in smart manufacturing

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  • Böhm, Robert
  • Letmathe, Peter
  • Schinner, Matthias

Abstract

Driven by technological transformation, changing competency requirements are receiving increased attention. Technological developments, such as digitization, automation, and cyber-physical systems, will change occupational requirements. Additionally, many companies are already confronted with a shortage of a skilled workforce due to demographic change. Companies can satisfy their demand for skilled labor through training or hiring. Both options are expensive and require careful planning. However, human capital is often neglected in this financial planning process. The aim of the present research is to devise and test a novel tool for companies to better plan the current and future organizational and employee competencies, and to coordinate their human and financial resources. Employing a budget-allocation approach, our exploratory study is based on a survey of 228 human resource and production managers. Respondents provide monetary valuations of competencies required by mechatronics technicians in the face of new technological challenges of smart manufacturing systems. Results show that managers are willing to allocate a relatively high budget to competencies such as complex problem-solving, analytical thinking, and troubleshooting. In addition, domain-based knowledge remains essential and valuable. We also find some differences in the monetary valuation between human resource and production managers.

Suggested Citation

  • Böhm, Robert & Letmathe, Peter & Schinner, Matthias, 2023. "The monetary value of competencies: A novel method and case study in smart manufacturing," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    • Handle: RePEc:eee:tefoso:v:189:y:2023:i:c:s0040162523000161
    DOI: 10.1016/j.techfore.2023.122331
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