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The Impact of Employees' and Managers' Training on the Performance of Small‐ and Medium‐Sized Enterprises: Evidence from a Randomized Natural Experiment in the UK Service Sector

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British Journal of Industrial Relations

Published online on

Abstract

We investigate the relationship between employees' and managers' training and firm performance using a policy intervention that randomly assigned training support to small‐ and medium‐sized enterprises in the UK accommodation and food service sector. Because the number of firms self‐selected into training exceeded available places, training was randomly assigned to some firms, resulting in a randomized natural experimental design that allowed us to identify the average effect of training on treated firms. Our empirical results suggest that employees' training had a stronger positive impact on firms' labour productivity and profitability than that of managers'.