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

Uschi Backes-Gellner and Simone Tuor Sartore

ILR Review, 2010, vol. 63, issue 2, 271-286

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 workplaces. 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.

Date: 2010
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Related works:
Working Paper: Avoiding Labor Shortages by Employer Signaling - On the Importance of Good Work Climate and Labor Relations (2007)
Working Paper: Avoiding Labor Shortages by Employer Signaling - On the Importance of Good Work Climate and Labor Relations (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ilrrev:v:63:y:2010:i:2:p:271-286

DOI: 10.1177/001979391006300205

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