Strategic Link Between Training and Profitability

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Linking training to strategic business goals has a clear impact on productivity and profitability, a major new skills survey shows today.

The survey by EEF, the manufacturers’ organisation, shows widespread acceptance of the link between a more highly skilled workforce and improved performance, with two-thirds of companies saying improving productivity was the main reason for increasing training.

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

The report Skills for Productivity: can the UK deliver? also showed that firms had increased their training spend over the previous 12 months and were planning to do so over the coming year, despite their margins being under intense pressure.

According to the survey, manufacturers that place greater importance on business plan than available budget when planning training, and target the right types of training across the whole business get more out of their training efforts.

EEF director general, Martin Temple commented: "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."

Ruth Spellman, chief executive of Investors in People UK said that the report confirmed what she already knew to be the case.

“There is good evidence from this work and our own research to suggest that companies who invest in their staff's training and development enjoy lower employee turnover, higher productivity and improved staff morale," she said. "All of these elements affect a company's financial performance and can make the difference between business success and failure."

The survey also showed that manufacturers still face a range of barriers to increasing their investment in training. These include the bureaucracy associated with the current system of funding training and a lack of clear information on training courses and providers.

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