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Training plays a crucial role in employment in SMEs, says study


Training in small and medium-sized organisations plays a significant role in helping them to survive and thrive by stimulating employment growth, according to recent research undertaken by Cambridge University on behalf of the Department for Education and Employment.

The Centre for Business Research looked at the role training played in stimulating employment growth in small and medium-sized enterprises (SMEs) between 1987 and 1995, and found that those companies which undertook staff training on a regular basis benefitted most from the effect, with training costs as a percentage of total sales reflecting positively and significantly to growth in employment.

The study found that the positive effect of training had been greatest between 1987 and 1990, and then decreased slightly over the next five years, probably due in part to changing economic conditions having a greater effect on the ability of smaller companies to survive. The study also revealed that company HR practices were also influential in affecting the impact of training, in that a greater impact was found in companies where other policies such as total quality management, quality circles, job rotation and performance-related pay were also in place.

The analysis was based on responses from 768 firms who were questioned in 1991 and again in 1997. Half of those questioned were training on a regular basis over the seven year period.


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