Employers' Willingness to Invest in the Training of Temporary Workers: A Discrete Choice Experiment

Abstract

Employers' willingness to invest in the training of temporary workers: a discrete choice experiment*Various studies have shown that temporary workers participate less in training than those on permanent contracts. Human resources practices are considered to be an important explanation for this difference. We develop a theoretical framework for employers' provision of training that explicitly incorporates the costs and benefits associated with training investments in employees with different types of employment contracts. Our framework not only predicts employers to be less willing to invest in temporary workers due to the shorter time horizon associated with such an investment, but it also provides insights into how this willingness depends on characteristics of the training that are related to the expected costs and benefits of the training investment. A discrete choice experiment is used to empirically test the predictions from our theoretical framework. In line with our theoretical framework, we find that employers are less likely to invest in the training of temporary workers. This particularly holds when temporary workers do not have the prospect of a permanent contract with their current employer. Furthermore, we show that employers' likelihood of investing in temporary workers indeed depends on aspects related to the costs and benefits of training, that is, a financial contribution to the training costs made by employees, a repayment agreement that applies when workers leave the organisation prematurely, and the transferability of the skills being trained. Our findings can be used to increase employers' willingness to invest in temporary workers. However, similar effects are observed when looking at employers' willingness to invest in permanent workers, suggesting that it will be difficult to decrease the gap in employers' willingness to invest between temporary and permanent workers.

Managers' Risk Preferences and Firm Training Investments

“…Each additional job change in the previous five years decreases the chances a job candidate is selected for training by around 6.5 percentage points. This is consistent with recent evidence that Dutch managers are less willing to train workers in temporary contracts, especially if they are unlikely to have an ongoing attachment to the firm in the future(Poulissen et al, 2021). Decision makers are also morereluctant to choose training options involving general rather than specific training.…”

“…One key advantage of our data is that they provide information about managers' personality traits and economic preferences. Previous vignette studies of worker training have either focused solely on the attributes of training scenarios themselves (see Fleischmann and Koster, 2017;Poulissen et al, 2021) or accounted only for managers' age, education, and organizational position (Karpinska et al, 2015). Our data include among other things, measures of locus of control, Big-5 personality traits, patience, and, most importantly for our analysis, attitudes towards risk.…”

Training of third-party employees and its outcomes: a systematic literature review

“…Researchers have concluded that organizations do not invest in training temporary employees, regardless of how much they identify with their client organizations (Manelkar et al ., 2023; Bosmans et al ., 2016). Due to the temporary nature of their jobs, TPEs do not guarantee commitment which acts as a barrier to their training (Poulissen et al ., 2021). In other words, their payback period for the investment is low (Fugate et al ., 2021) due to frequent shift in organizations, for better projects.…”