Companies that train are more profitable and productive


There is a clear link between the productivity and profitability of manufacturers who not only place a high priority on training but, more importantly, relate their training plan to their strategic business goals, new research has suggested.

The report, Skills for Productivity: can the UK deliver?, by manufacturers' organisation EEF is the first of a two-part analysis of current and future skills, education and training in UK manufacturing.

It has revealed widespread acceptance of the link between a more highly skilled workforce and improved performance, with two thirds of companies polled saying improving productivity was the main reason for increasing training.

As a result, over the past year half the companies surveyed by EEF had improved their productivity, suggesting the gap with their competitors may be closing.

Encouragingly, the survey also showed that firms had increased their training spend over the previous 12 months and were planning to do so over the coming 12, despite their margins being under intense pressure, said EEF.

Companies that placed greater importance on business plan rather than available budget when planning training, and which targeted the right types of training across the whole business, tended to get more out of their training efforts.

Of companies with the Investors in People benchmark standard, almost two thirds had seen an improvement in productivity in the past year compared with only 20 per cent without the standard.

In addition, just under 30 per cent of companies with IiP had improved their profitability compared with just over 10 per cent without.

The survey also showed wide variation by company size, with only 10 per cent of small and medium sized companies adopting the standard, compared with almost a third of larger companies.

These figures suggested that there is a renewed need to promote the benefits of Investors in People more widely, said EEF.

EEF director-general Martin Temple said: "This report demonstrates that increasing the amount spent on training is not enough on its own to improve performance.

"The companies that are able to steal a march on their competitors are those with a business culture which clearly aligns their investment in skills and training to their overall business goals," he added.