Training: A Strategic Enterprise Decision?
This paper analyses the training behaviour of German establishments on the basis of representative and topical data. Especially large and co-determined establishments, investors and establishments bound by collective wage agreements train. In addition, es
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Abstract
This paper analyses the training behaviour of German establishments on the basis of representative and topical data. Especially large and co-determined establishments, investors and establishments bound by collective wage agreements train. In addition, establishments with apprentices and a large share of vacancies are more inclined to train. Also worker characteristics play a role: establishments with a high share of qualified employees train more often while establishments with a high share of employees leaving train less. A participative work place organisation and a state-of-the-art technical equipment have a positive impact on the willingness of the establishment to invest in training. In addition to comparable empirical studies, this paper also includes variables that indicate at which time establishments invest in training. It argues that establishments invest strategically when they expect additional skill demand and when profits allow investments in human capital.
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lntroduction
Human capital, knowledge, and skills are increasingly important competitive assets within establishments. Continuous employee training sponsored by the establishment is therefore perceived as one of the most important measures to gain and keep productivity. Especially the German economy that is based on a relatively high share of well qualified employees who frequently work in flexible, complex and diversified quality production derives its main competitive advantages from human capital and therefore has a large demand for continuous training (Roth 1997). In 1998, German firms accordingly invested on average the substantial amount of 1128 EUR per year per employee in continuous training (Institut der deutschen Wirtschaft 2002: 99). It is not clear, however, in which economic situations firms offer training. Although the importance of training is a widely accepted fact, firms may be tempted to reduce costs in a temporary crisis by cutting G. Fandel et al. (eds.), Modern Concepts of the Theory of the Firm © Springer-Verlag Berlin Heidelberg 2004
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training expenditures first because the negative effects will be feit only in later years whereas the positive cost effects are immediate. This would imply that firms train when they can afford this investment in human capital, i.e. in good economic times. On the other hand, training may be a measure to regain competitiveness. This is a possible interpretation of the fact that especially firms with productivity disadvantages train (Bartel 1994; Zwick 2002). This means that firms invest in training in bad economic circumstances. Training is therefore seen as a strategic attempt to regain competitiveness, because training increases productivity at least during the two following years (Zwick 2002). A third theoretical possibility for the timing of training is that investments in training are a necessity when the workforce is not adequately qualified and firms are forced to retrain workers intemally instead of facing high labour turnover costs and a shortage of skilled worke
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