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Analysis of the Relationship between Training & Business Performance

Aims & objectives

This research was based on a series of successive projects funded by the DfES between 1998 and 2001 which were concerned to establish findings on the relationship between training and firm performance.

Results & dissemination

The evidence on the impact of training by businesses on subsequent business performance is generally considered to be partial, indirect and inconclusive.  This is due to a number of reasons, including: the relative paucity of data available on a consistent basis on training and/or performance; limited methodological and/or inferential analysis of the relationship between training and performance; and the relatively limited scope of research in this field.  Much of the latter examines only intermediate effects of training on individuals, such as acquisition of qualifications or earnings. This may be due to the fact that many surveys and databases just collect information on either business training activity or performance or, if on both, only at a relatively superficial level.  Another difficulty lies in the need to take account of heterogeneity in the characteristics and behaviour of businesses which train and those which do not.  A further difficulty lies in differentiating the effects of training from the potential myriad of others impacting on performance.  These methodological issues have been addressed in an initial methodological paper (Hughes and Weeks ‘Methodological Approaches to the study of the Impact of Training on Firm Performance’, March 1999) and in an initial empirical project funded by the then DfEE, Cosh, A.D., Hughes, A. and Duncan, J. (1998) Investment in Training and Small Firm Growth and Survival, Department for Education and Employment Research Report No RR36. On the basis of this work a third project developed the CBR panel survey dataset to analyse a) the extent to which firms differ in terms of employment growth according to whether or not they train; b) how much additional information is contained in data which records a measure of the intensity of training; and c) whether firms which persist in training are different from those where training is a temporary activity.  Finally it considers the implications of our results for future research strategies and data collection in relation to evaluating the impact of training on firm performance. A further DfES project led to the commissioning of the CBR by DfES to carry out a customized survey of the training and performance characteristics of a specially drawn sample of 2500 UK firms, complemented by a sample of interview based case studies.

This project  reported to the DfES on its findings and a report was published by the DfES in 2003. Download The Relationship between Training and Business Performance

Working papers

Cosh, A., Hughes, A. and Weeks, M. (2000) 'The Relationship Between Training and Employment Growth in Small and Medium-Sized Enterprises'. Centre for Business Research Working Paper No. 188.

Reports

Cosh A and Hughes A with Bullock A and Potton M (2002) 'The Relationship between Training and Business Performance', Report to DfES.

Cosh, A., Hughes, A. and Weeks, M. (2000) ‘The Relationship Between Training and Employment Growth in Small and Medium-Sized Enterprises’.  Department for Education and Employment, Research Report No. 245, Sheffield.

Datasets

Cosh, A and Hughes, A with Bullock, A and Potton, M (2002) Creation of dataset of 2,500 UK firms with detailed information about their training and performance.

Project leader

Alan Hughes

Other principal investigator

Andy Cosh
Melvyn Weeks

Survey & database manager

Anna Bullock

Junior research fellow

Margaret Potton (2000-2002)

Project status

Completed