Training and Performance in Small Firms

Abstract

This article explores the relationship between training and growth in small manufacturing businesses. Research on training undertaken at the macro-level highlights a series of earnings and productivity returns. However, firm-level research has generally yielded more ambiguous results. A review of small firms research indicates that the relationship between training and growth has rarely been considered within the wider context of other factors that may influence growth. Training literature also appears to be more concerned, perversely, with its impacts on firm inputs (employment growth) rather than output (sales) growth. Other considerations also complicate understanding of the relationship between training and performance, since training may be provoked by employment growth (but not theoretically by sales growth), and has a tendency to be associated with larger firms. These considerations are examined with respect to two types of training (in-house training and ex-house management training) using information from a sample of 114 small manufacturing firms in Wales.