Influence costs and the reporting of skill deficiencies

Abstract

There remains a conventional wisdom amongst economists that the UK suffers from a seriously under-skilled workforce and that an effective increase in the provision of training is key to economic regeneration. This article, while accepting the link between an underskilled workforce and economic performance, questions the reporting of skill shortages by personnel departments. This is based upon the notion that employees can spend considerable time attempting to influence decision-makers over and above their actual worth. We investigate whether personnel departments use concerns, and the ambiguous nature of, skill shortages to manipulate the reporting of skills at the organizational level.