Training as a Human Resource Strategy: The Response to Staff Shortages and Technological Change

This paper examines the ways that innovation status as opposed to technology use affects the training activities of manufacturing plants. It examines training that is introduced as a response to specific skill shortages versus training that is implemented in response to the introduction of advanced equipment. Advanced technology users are more likely to have workers in highly skilled occupations, to face greater shortages for these workers, and they are more likely to train workers in response to these shortages than are plants that do not use advanced technologies. The introduction of new techniques is also accompanied by differences in the incidence of training, with advanced technology users being more likely to introduce training programs than non-users. Here, innovation status within the group of technology users also affects the training decision. In particular, innovating and non-innovating technology users diverge with regards to the extent and nature of training that is undertaken in response to the introduction of new advanced equipment. Innovators are more likely to provide training for this purpose and to prefer on-the-job training to other forms. Non-innovators are less likely to offer training under these circumstances and when they do, it is more likely to be done in a classroom, either off-site or at the firm. These findings emphasize that training occurs for more than one reason. Shortages related to insufficient supply provide one rational. But it is not here that innovative firms stand out. Rather they appear to respond differentially to the introduction of new equipment by extensively implementing training that is highly firm-specific. This suggests that innovation requires new skills that are not so much occupation specific (though that is no doubt present) but general cognitive skills that come from operating in an innovative environment that involves improving the problem-solving capabilities of many in the workforce. These problem-solving capabilities occur in a learning-by-doing setting with hands on experience.