Can Employers be Persuaded that Training Pays

Futureskills Scotland’s surveys of Scottish employers show that:

• Around two-thirds of Scottish employers provide or arrange training for staff each year
• That two employees in every five receive off-the-job training each year
• Employers who do not provide such training may have good reasons for not doing so – for instance, they may consider that all staff are fully proficient

A common response to these results amongst Scottish stakeholders has been:

• That there is ‘not enough’ training going on in Scotland’s workplaces and, indeed, that there can never be enough
• That some employers are unaware of the benefits of training and should be convinced and actively encouraged to train more staff
Futureskills Scotland commissioned respected academics, Professor Ewart Keep - of the Warwick Business School, University of Warwick - and Dr. Ken Mayhew - Department of Economics, University of Oxford - to investigate the feasibility of generating evidence about the returns achieved by employers from investing in training.  This work showed that:
• There is no suitable, official source of robust data on employer spend on training
• Employers find it very difficult to accurately estimate the cost of training – for instance, if someone spends an hour showing a colleague how to make better use of word-processing software, how is that informal training activity captured and costed?
• It is difficult to isolate the benefits which accrue to an employer from specific staff training

Without such information, it is impossible to calculate the rate of return to employers from investing in training.  These obstacles are not insurmountable – it is possible to begin collecting survey information which would shed light on these topics.  However, such an approach would take many years to generate appropriate data and would be extremely expensive.

Perhaps more importantly, Keep and Mayhew reviewed how organisations and investors would deal with any such evidence.  They suggest that large firms face little external pressure from investors to focus on investment in staff training. Additionally, they suggest that many management teams are likely to rely on their own experience and knowledge in setting training requirements, rather than being influenced by objective research.  That is, even if robust evidence on returns to training could be generated, its impact on business behaviour and investment in training in such companies is likely to be limited.

The research has highlighted the importance of government gathering evidence about its investment in workforce skills – which sectors, types of workers or types of firms have greatest need?  Where is the return on public investment likely to be greatest?

Finally, the point needs to be reinforced that most Scottish employers invest in staff training.  For the minority of Scottish employers who do not provide such training, exhorting them to do so on the basis that ‘training is good’ and ‘more training is better’ is unlikely to be successful.

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