Business cycle management and company performance hiring habits

Abstract

Purpose: the purpose of the research paper is to observe and analyse how major companies in the Baltic States (Latvia, Lithuania and Estonia) behaved during the last business cycle in terms of hiring management in order to identify different management hiring strategies across various countries and industries in different business cycle phases. The paper analyses whether companies adopt counter-cyclical or cyclical behaviour during different business cycle phases taking into account GDP indicators for each country.

Approach: statistical analysis from 2007 to 2012 encompassing the 1334 largest (large and medium-size enterprises) businesses in the Baltics by operating revenue. In the research paper clustering and comparison methods are applied in order to identify how businesses react to different business cycle phases.

Findings: the research findings show that companies in the Baltic States mainly behave cyclically and have very balanced counter-cyclical and cyclical behaviour with some industries that stand out. Overall the results show that hiring management in the Baltic States is carried out quite conservatively and there are few exceptions in counter-cyclical behaviour of hiring management.
Research implications: the research paper demonstrates that various industries adopt different strategies during the business cycle and there are differences on both country and industry levels, which opens a door for further research in order to develop a holistic instrument for how to adapt to different business cycle phases.

Originality: the first research paper that summarizes major Baltic companies’ behaviours during the last business cycle on both a country and industry level and provides a comparison between them.