Labour Market Regimes and Worker Recruitment and Retention in the European Union: Plant Comparisons

We analyse worker recruitment and retention outcomes, contrasting production worker skill profiles in the UK subsidiaries of five multinationals with, in each case, a matched plant in another EU state. From personnel records we build up plant distributions of worker pay, age, schooling, prior experience and tenure. We find evidence of local management discretion, with differences in unit labour costs and in recruitment/retention outcomes between the matched subsidiaries. UK plants have a 'hire and fire' environment and a less skilled worker mix. Such outcomes can be linked to the UK's lower labour costs and less regulated labour market.