Company‐based determinants of training and the impact of training on company performance

Abstract

Purpose The purpose of this study is to use an international dataset to examine what determines employee training from an organisational perspective, and to what extent training investments enhance company performance. Design/methodology/approach Data from 5,824 private‐sector organisations are used to examine determinants of training and the connection between training and profitability. OLS regressions and Probit estimates are used in the statistical analyses. Findings The results indicate that the provision of company training is largely determined by firm‐specific factors, such as human resource management (HRM) practices. The results further show that two widely used measures of training – incidence and intensity – are largely determined by different factors. Staff turnover (mobility) does not appear to be a decisive factor in explaining the provision of training on a national or company level, although it is associated with lower profitability to some extent. However, the single most important factor associated with profitability is how much is invested in training (intensity), suggesting that the economic benefits of training outweigh the cost of staff turnover. Originality/value This study contributes to the existing training literature by offering extensive access to internal measures of training, profitability, HRM practices, workforce characteristics and staff turnover for companies in 26 countries worldwide.

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