Working Papers in Economics and Statistics,
Linnaeus University, School of Business and Economics, Department of Economics and Statistics

Abstract: The existence of skills shortages in labour markets is a widespread phenomenon observed in various economies and employment sectors. This study explores the relationship between companies' skills shortages and their HR policies and practices targeting older workers, which constitute a part of their overall age management strategy. The study addresses the following key questions: How do skills shortages affect personnel policies and practices for older workers? What are the plausible explanations for the presence or absence of a dependency between skills shortages and HRM strategies tailored for older workers? This study uses data that originates from a web-survey in 2015 among 6 000 establishments in Sweden with at least 10 employees. The survey included questions about the characteristic of the surveyed firms/establishments and HRM policies towards older employees. We perform regression analysis where the outcome variable is coded as a dichotomous variable (logit regression), which allows us to estimate the probability that an employer use a certain age-management measure as a response to the presence of skill shortage, when controlling for the possible effect of the control variables (firm size and industry). We find that skills shortages in combination with an expected firm growth in terms of number of employees increases the probability of measures that aim to delay retirement, by asking workers to delay retirement and/or to restricting early retirement and part-time retirement. When firms do not expect to grow, skills shortages increases the probability of reduced workload for older workers and reduces duties and salary, but this effect is restricted to firms that report a high level of skills among their employees. Other HRM policies are also increasing with skills shortages, such as age limits for irregular working hours, flexible working hours, but in this case only in firms that report a low level of skills among their employees. The results highlight that skills shortages affect firms’ age-management, and that measures are sensitive to firms’ growth-expectations and skill level. The study illuminates the nuanced relationship between skills shortages and specific HR approaches, providing valuable insights into the considerations that shape professional practices within the realm of HR management.

Keywords: Skills shortages; HR policy; Older workers; Retirement

JEL-codes: J24; J26; J53

Language: English

28 pages, November 26, 2024

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