Training and Hiring Strategies to Improve Firm Performance

Mika Maliranta and Rita Asplund

No 1105, Discussion Papers from The Research Institute of the Finnish Economy

Abstract: We study how upgrading the skills of the personnel affects a firms 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.

Keywords: productivity; profitability; training; education; hiring (search for similar items in EconPapers)
JEL-codes: D2 J24 M5 O3 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2007
New Economics Papers: this item is included in nep-bec, nep-cse, nep-eff and nep-hrm
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Citations: View citations in EconPapers (4)

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