Training Older Employees – What is Effective?

Thomas Zwick, LMU Munich and ZEW Mannheim

Cedefop Conference “Learning Later in Life“

Brussels, 21/22 September 2011

Prof. Dr. Thomas Zwick

2Training for Older Employees 2

Motivation

• Literature on life-long learning concentrated on declining participation rates by age and the reasons for that (Lois, 2007)

• Given employees participate in training, its effectiveness seems to decline by age ► Training of older employees does not increase relative productivity of this employee group on establishment level (Göbel and Zwick, 2010) ► Personnel managers think that training of older employees is not effective (Boockmann and Zwick, 2004)

• This contribution compares training motivation of older and younger employees, their training patterns and their (self-assessed) effectiveness

Prof. Dr. Thomas Zwick

3Training for Older Employees 3

Differences in Training Motivation by Age

• Motivation for long-run and abstract investments declines with age and motivation for activities that prevent losses increases with age (Hertel and Stamov-Rossnagel, 2010) ► Training effectiveness is higher if training is practical, internal, on the job, and not concentrated on new skills

• Older employees have disadvantages in fluid cognitive ability and they do not like direct comparisons with younger employees (Kanfer and Ackerman, 2004)

• Older employees are more interested in improving the quality of work than their relative position in the working group► Training effectiveness is higher when it demands crystallised skills and improves working climate (social and managerial skills) and lower when it demands fluid intellectual abilities and mainly offers long term career chances (new information technologies)

Prof. Dr. Thomas Zwick

4Training for Older Employees 4

Empirical Strategy to Assess Training Efficiency

• Analyse various dimensions of training patterns by age• Older employees differ from younger employees with respect to

training-related characteristics – for example qualification, tenure or health (Gallenberger, 2002) ► Include only employed ► Multivariate approach to identify role of age including individual and establishment characteristics ► Differentiate between training contents, forms, and effectiveness ► Take into account firm-specific effects

Prof. Dr. Thomas Zwick

5Training for Older Employees 5

Data- Professional training as part of lifelong learning data set (WeLL)- Detailed questionnaires for employees in firms that indicated in representative establishment

panel that they are active in training- Two waves 2007 and 2008- Combine both waves and take one observation per training participant, final sample consists of

6349 employees from 149 enterprises- Use four age group indicators and concentrate on differences between oldest age group

(about 56 years or older) and other age groups- Dependent variables: training goals and effectiveness, training characteristics and contents- Explanatory variables: qualification (3), tenure (4), health, high probability to quit working

during the next year, East Germany, employer size (3), and sector (2) dummies- Adjust for employer clusters

Prof. Dr. Thomas Zwick

6Training for Older Employees 6

Older employees (reference group 55+) have modest training goalsTraining Goals Higher

ProductivityAdoption Promotion Higher

EarningsJob Security

New Orientation

Realschule 0.12*** 0.11*** 0.03 0.02 0.05*** 0.01Gymnasium 0.24*** 0.21*** 0.08*** 0.01 0.03 0.04***Female -0.00 0.01 -0.05*** -0.04*** 0.02 -0.01Birth years 1952-61 0.06*** 0.06*** 0.08** 0.06*** 0.07*** 0.02*

Birth years 1962-71 0.04** 0.05*** 0.11*** 0.10*** 0.05*** 0.05***

Birth years 1972 and younger 0.09*** 0.08*** 0.21*** 0.16*** 0.10*** 0.10***

Tenure 2-5 years 0.06** 0.06** 0.03 0.03 0.06** 0.04*

Tenure 6-15 years 0.05*** 0.06*** 0.05*** 0.05*** 0.06*** 0.03*

Tenure more than 15 years 0.05*** 0.05*** 0.04*** 0.04** 0.05*** 0.01

Good health 0.05*** 0.04** 0.04*** 0.05*** 0.04** 0.01High probability to quit working -0.11*** -0.11*** -0.08** -0.08*** -0.12*** -0.03

East Germany -0.01 -0.00 -0.02* 0.00 0.01 -0.01Employer 200-499 employees 0.01 0.03 0.02 0.01 0.01 0.03**

Employer 500-1999 employees 0.05* 0.05** 0.04* 0.04** 0.05** 0.03**

Services sector 0.04** 0.04** 0.00 -0.00 0.02 0.01R-squared 0.03 0.04 0.04 0.02 0.02 0.02

Comments: OLS regressions, clustering adjusted for 149 enterprises, number of observations: 5303, reference categories: Hauptschule, birth year 1952 or older, employer with less than 200 and more than 50 employers, tenure less than 2 years

Prof. Dr. Thomas Zwick

7Training for Older Employees 7

Older employees assess training efficiency worseEffects of training Higher

ProductivityAdoption Promotion Higher

EarningsJob Security

New Orientation

Realschule 0.09*** 0.06 0.01 0.00 0.03** 0.01Gymnasium 0.17*** 0.04*** 0.04*** -0.00 0.02 0.07***Female 0.02 -0.02*** -0.02*** -0.01*** -0.02* -0.01Birth years 1952-61 0.05** 0.04** 0.02** 0.00 0.02 0.02*

Birth years 1962-71 0.03 0.03* 0.05*** 0.01 0.02 0.04***

Birth years 1972 and younger 0.06** 0.09*** 0.11*** 0.05*** 0.06*** 0.11***

Tenure 2-5 years 0.06** 0.05** 0.02* 0.01 0.04 0.03**

Tenure 6-15 years 0.08*** 0.07*** 0.02** 0.01 0.03* 0.02*

Tenure more than 15 years 0.06*** 0.05*** 0.02** 0.01 0.03** 0.01

Good health 0.05*** 0.03 0.02*** 0.02*** 0.04*** 0.01High probability to quit working -0.10*** -0.09*** -0.04** -0.01 -0.06** -0.00

East Germany -0.01 -0.00 -0.01 -0.01 0.01 -0.02**Employer 200-499 employees 0.01 0.03 0.01 0.00 0.01 0.00

Employer 500-1999 employees 0.05* 0.06** 0.03*** 0.01 0.02 0.01

Services sector 0.04** 0.05** -0.00 -0.02*** 0.00 0.00R-squared 0.03 0.03 0.03 0.01 0.01 0.03

Comments: OLS regressions, clustering adjusted for 149 enterprises, number of observations: 5303, reference categories: Hauptschule, birth year 1952 or older, employer with less than 200 and more than 50 employers, tenure less than 2 years

Prof. Dr. Thomas Zwick

8Training for Older Employees 8

Self-assessed effectivity of different training forms by ageEffects of training Higher

ProductivityAdoption Promotion Higher

EarningsJob Security

New Orientation

SeminarBirth years 1952-61 0.08* 0.09** 0.03* 0.01 0.09*** 0.07***

Birth years 1962-71 0.09** 0.11** 0.09*** 0.03* 0.10*** 0.13***

Birth years 1972 and younger 0.04 0.09* 0.15*** 0.05* 0.09** 0.21***

Training on the job

Birth years 1952-61 0.01 0.02 0.03* 0.01 -0.01 0.02

Birth years 1962-71 0.01 0.04 0.04** 0.02 0.00 0.06**

Birth years 1972 and younger 0.07* 0.09** 0.11*** 0.05*** 0.02 0.12***

Self-managed learning

Birth years 1952-61 0.02 0.01* 0.03 -0.01 0.04 0.04

Birth years 1962-71 -0.01 0.08 0.05 0.01 0.02 0.08***

Birth years 1972 and younger 0.07 0.09*** 0.09*** 0.05* 0.06 0.17***

Comments: OLS regressions, clustering adjusted for 149 enterprises, covariates identical to previous regressions

Prof. Dr. Thomas Zwick

9Training for Older Employees 9

Self-assessed effects of different training contents by ageEffects of training Higher

ProductivityAdoption Promotion Higher

EarningsJob Security

New Orientation

Information and communication technologyBirth years 1952-61 0.04 0.08* 0.01 0.02 -0.02 -0.00

Birth years 1962-71 0.03 0.09** 0.04** 0.03** 0.01 0.03

Birth years 1972 and younger 0.03 0.13** 0.10*** 0.03 0.05 0.10***

Technical contents

Birth years 1952-61 0.09* 0.10** 0.05** 0.00 0.03 -0.00

Birth years 1962-71 0.07 0.11** 0.06*** 0.03** 0.02 0.06**

Birth years 1972 and younger 0.07* 0.04 0.11*** 0.04** 0.05 0.15***

Management and communication

Birth years 1952-61 -0.06 0.03 0.04 -0.02 -0.01 -0.00

Birth years 1962-71 -0.12** -0.02 0.06** -0.02 -0.02 0.04

Birth years 1972 and younger -0.04 0.07 0.08* -0.01 0.06 0.08*

Comments: OLS regressions, clustering adjusted for 149 enterprises, covariates identical to previous regressions

Prof. Dr. Thomas Zwick

10Training for Older Employees 10

Training effectiveness by age and training characteristics

• For almost all training contents lower effectiveness for oldest age group • Exception: group and communication training – here same effectiveness except for

promotion and better productivity assessment of older employees• More abstract training forms (formal seminars) are less effective for older

employees• More practical training forms (self-managed training and training on the job) are

more effective for old age groupsBut: • Incidence of training contents and extent offered similar for all age groups (for group

and communication training just two percent higher incidence for oldest group)• Significantly more seminars and significantly less training on the job for oldest age

group

Prof. Dr. Thomas Zwick

11Training for Older Employees 11

Conclusions

• No age differences in crucial training characteristics (number of training spells, training duration, initiative, cost sharing)

• Some differences in contents and training forms (positive age correlation: general human capital, seminar; negative age correlation: internal training, training on the job)

• On average older employees are as satisfied with training as younger employees,

• They have more modest training goals and they are more sceptical with respect to training efficiency

• Training efficiency is higher for group and communication training, for internal training, training on the job and self-managed training

Prof. Dr. Thomas Zwick

12Training for Older Employees 12

Lessons training older employees

• Lower training participation and training effectiveness might be a consequence of wrong training contents and formats instead of lower trainability or interest in training

• Far more establishments include older employees in training than offer specific training measures for older employees (Göbel and Zwick, 2010)

• Manager should take into account:

age shift in motivation from building a career to loss aversion and labour quality/flexibility

disadvantages of old employees in fluid cognitive skills and advantages in crystallised cognitive skills

► offer personalised training measures by age

Prof. Dr. Thomas Zwick

13Training for Older Employees 13

No differences between training extent by age

Training Dimension Entire Sample Birth Year 1951 or older Birth Years1952-1961

Birth Years1962-1971

Birth Year1972 or younger

Duration in hours 44.57(104.32)

41.71 (87.87)

47.77(115.28)

43.30(101.07)

42.36(97.79)

Period in months 2.32(1.89)

2.29(1.87)

2.31(1.87)

2.34(1.91)

2.34(1.93)

Number of trainings 1.77(1.12)

1.77(1.39)

1.74(1.13)

1.78(1.26)

1.80(1.25)

Costs borne by participant

0.16(0.36)

0.15(0.35)

0.15(0.37)

0.16(0.36)

0.17(0.38)

Initiative by participant 0.41(0.49)

0.41(0.49)

0.42(0.49)

0.41(0.49)

0.42(0.49)

Initiative by employer 0.23(0.42)

0.23(0.42)

0.23(0.42)

0.23(0.42)

0.22(0.41)

Training necessary by law

0.17(0.38)

0.16(0.37)

0.18(0.38

0.18(0.38)

0.17(0.37)

Training satisfaction 5.74(2.64)

5.58(2.77)

5.74(2.69)

5.73(2.60)

5.92(2.50)

Descriptive Differences between Training Dimensions and Age Groups

Prof. Dr. Thomas Zwick

14Training for Older Employees 14

Some training characteristics differ by ageSelf-induced learning Seminar Training on

the jobICT Training

Technical Training

Birth years 1952-61 0.01 -0.01 0.04* -0.00 -0.00Birth years1962-71

-0.02 -0.01 0.08*** -0.00 -0.01

Birth years 1972 and younger -0.01 -0.04** 0.12*** -0,01 -0.02R-squared 0.03 0.08 0.01 0.00 0.00

Obs. 5590 5590 5590 5590 5590

Comments: OLS regressions, clustering adjusted for 149 enterprises, number of observations: 5303, reference categories: Hauptschule, birth year 1952 or older, employer with less than 200 and more than 50 employers, tenure less than 2 years