Structural changes take place in an increasingly complex economic environment by reallocating micro units. With the first waves of the IAB establishment panel for Baden-Wuerttemberg available it is now possible for the first time to analyse changes on an individual firm level with a representative micro-panel database. As a basic principle businesses are confronted with a variety of strategies to cope with structural change. Two of these strategies, namely, the further training of employees on the one hand and the decisions on recruitment and dismissal of workers on the other hand, are analysed using econometric panel data methods. In the project’s first phase the question if and how far training schemes on a business level affect the productivity of these businesses is evaluated. In the second phase the dynamics of labour, which determine the level of employment, are to be analysed in order to provide an insight into the flexibility and adaptability of firms. For example a small change in a company’s stock of labour can be the result of a high labour turnover rate meaning inflow and outflow of employees. Thus on the one hand the kind and magnitude of the reallocation of employees are investigated while on the other hand the interrelations between fluctuations of employees and firm specific factors is estimated.