Companies Waste Money on Training of Older Employees

Older employees assess the return of their training measures lower than younger employees in German companies. Although companies spend approximately the same amount of money per participant on the training of older employees as on the training of younger employees, they do not adequately take into consideration the specific interests and preferences of older employees. Therefore, the investments in training do not pay off as much as they could. These are the findings of a current study by the Centre for European Economic Research (ZEW) in Mannheim.

Due to the demographic change, older employees become more and more important for companies. An increasing number of companies realisesthis and is willing to also invest in employees older than fifty five. However, the return of training measures for older employees is frequently lower than the return of training for younger ones. One of the reasons for this is that only around one fifth of the companies including older employees in training measures consider their special interests and needs. When participating in training programmes, older employees often pursue less ambitious goals and their self-assessment of the training is significantly less optimistic compared to younger employees.

"Companies should consider that older employees prefer training measures that are tailored to their practical work environment, enabling them to put newly gained knowledge into practice quickly. In contrast, they are more doubtful about formal and more abstract training forms because implementing knowledge acquired this way usually takes longer and the benefits are mainly indirect," says Prof. Dr. Thomas Zwick, research associate at ZEW and professor at Ludwig-Maximilians-University Munich. Training-on-the-job and self-induced training are more effective forms of learning for older employees than for younger employees. Older employees prefer a strong practical orientation because their remaining time at the company is shorter and they have less career opportunities. Therefore, long-term measures do not reach their maximum effectiveness and are less appealing.

Zwick’s study also shows that older employees prefer training programmeswhere they can score with experience and that result in a fast improvement of their work environment, such as training in communication and management. During training featuring completely new and abstract contents older employees often lag behind younger participants. This impairs their motivation for taking part in training programmesfocusing on these contents. Therefore, the return of abstract and technical or information technology training courses is lower for older employees than for younger ones.

The ZEW study analyses a survey of over 6,000 participants in training measures from around 150 companies in Germany. Apart from training form and training content, age, the time worked at the company, health, qualification, gender and the attachment of employees to the job market are also taken into account to explain the effectiveness of training.

For further information please contact

Prof. Dr. Thomas Zwick, Phone +49 89-2180-5616 , E-mail zwick@bwl.lmu.de