The Effect of Enhancing Workers’ Employability on Small and Medium Enterprises: Evidence from Spain

Abstract

In this paper, we analyse the effect of promoting workers’ employability on labour productivity. To this end, we adapt a simple efficiency-wage model that includes the employer’s decision on the provision of opportunities for enhancing workers’ employment prospects in a context of job insecurity. We show that (i) by facilitating workers’ employability, the firm increases its labour productivity; and (ii) the higher the job uncertainty the higher the productivity gains due to the increase in employability. One of the advantages of our model is that it is simply enough to allow us to formulate two testable hypotheses, namely (i) the increase of jobs’ potential to enhance workers’ employability results in higher level of workers’ effort, and (ii) the provision of employability is more profitable for small and medium enterprises (SMEs) than for large firms. More precisely, SMEs should obtain higher effort levels from employees by fostering workers’ employability than large firms. We provide some evidence supporting these hypotheses from a highly representative sample of Spanish manufacturing firms. Copyright Springer 2007employability, worker effort, SMEs, Spain, J24, J31, M21,

A Matter of Learning: How Human Resources Affect Organizational Performance

“…One of the consequences of these changes is the undermined credibility of an employment model organized around the stability of the long-term relationship between employee and employer (Arocena, Nu´-n˜ez and Villanueva, 2007). Consequently, nowadays we frequently find stable and precarious employment in the same organization (Godin and Kittel, 2004).…”

The effect of high performance work systems on small and medium size enterprises

“…The current generalized increase in labor insecurity and precariousness affects SMEs (Arocena, Núñez, & Villanueva, 2007). Growing insecurity discredits the labor system, which arises from long-term stability (Cuyper, Van der Heijden, & De Witte, 2011).…”

Learning Atmosphere and Ethical Behavior, Does It Make Sense?

“…There is also very limited research on the effects of employability on what is a much more analyzed construct, individual task performance. These scarce empirical works suggest that employees with higher employability are more capable of doing their tasks and are more motivated to make an extra effort, so they will receive a better performance appraisal (Arocena et al, 2007;Villanueva, 2005).…”

“…Along these lines, research by Arocena et al (2007) has shown that employees increase their commitment to the organization when they perceive that firms invest in their employability. As recent research shows, employees may believe that due to current economic dynamics they need to remain organizationally mobile to maintain their job.…”

“…Such attention is largely due to the types of changes taking place in the labor market, which include deteriorating job security (De Witte, 2005), increased flexibility (Castells, 2000;Sundin and Wikman, 2004), and the trend toward greater individualization (Allvin, 2004). One of the consequences of these changes is the undermined credibility of a model of employment organized around the stability of the long-term relationship (Arocena et al, 2007). The focus has shifted from job security to employability.…”