Employers’ preferences for IT-retrainees: evidence from a discrete choice experiment

Abstract

Purpose: The purpose of this paper is to present the results of a discrete choice experiment (DCE) on the competencies of potential information technology (IT)-retrainees. The results give insights in the monetary value and relative returns to both soft and hard skills. Design/methodology/approach: The authors apply a DCE in which the authors propose seven pairs of hypothetical candidates to employers based in the municipality of Amsterdam, the Netherlands. These hypothetical candidates differ on six observable skill attributes and have different starting wages. The authors use the inference from the DCE to calculate the marginal rates of substitution (MRS). The MRS gives an indication of the monetary value of each skill attribute. Findings: Employers prefer a candidate who possesses a degree in an exact field over a similar candidate from another discipline. Programming experience from previous jobs is the most highly valued characteristic for an IT-retrainee. Employers would pay a candidate with basic programming experience a 53 percent higher starting wage. The most high-valued soft skill is listening skills, for which employers are willing to pay a 46 percent higher wage. The results of this paper show that both hard and soft skills are important, but not all soft skills are equally important. Originality/value: The results on the returns to skills provide guidelines to tailor IT training and retraining programs to the needs of the business environment. A key strength of this paper is that the authors have information on the preference orderings for different skills and kinds of experience.