Supported by Lloyds Banking Group Centre for Business Prosperity, Enterprise Research Centre & Regional Studies Association (West Midlands), a special four paper workshop on Training and Productivity presented by Dr Bochra Idris, Dr Susan Schwarz, Dr Maria Wishart and Dr David Morris took place on 5 November 2020.

Chair: Professor Jun Du (Aston University), Chair RSA West Midlands Branch
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Speaker: Dr Bochra Idris (Aston University)
Title: Training and Performance in SMEs: Empirical Evidence from Large-Scale Data from the UK
Abstract: This paper examines the link between training and (perceived) actual/intended performance of small and medium-sized enterprises (SMEs) in the UK. We use the UK’s 2015 Small Business Survey containing largescale data from more than 15,000 owner-managers of SMEs. Using the ordered probit analysis to test our hypothesis, we find that there is a positive and significant relationship between training and SMEs’ performance. When differentiating between training according to its type, we find that on-the-job and off-the-job training are positively and significantly related to performance, however, when these types of training are received simultaneously, the combined association becomes stronger than their individual effects.
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Speaker: Dr Susan Schwarz (King’s College London)
Title: Investing in Employees’ Human Capital: The Effect of Managerial and Staff Training on Firm Productivity.
Abstract: Given economic uncertainty, productivity is a crucial goal for firms worldwide, yet training investments to boost productivity face increased scrutiny. We aim to understand conceptually and empirically the relationship between skills, training, and productivity, applying a resource management perspective to examine strategic investments in human capital. Specifically, the differential effects of managerial and staff-level training on firm productivity are investigated, using measures of training coverage and quality drawing on 16,284 observations from the UK-based Employer Skills Survey and Investment in Training Survey linked with Office of National Statistics data 2011-2017. We examine the impact on productivity of firms’ deviation from industry training rates to understand benefits to competitive advantage from training employees. Results indicate that the proportion of managers trained and the quality of staff training increase firm productivity, with the interaction of the two generating further gains. This finding illustrates the value of developing synergistic competence between managers and staff at a time when employers are striving to combat disengagement within organizations. In addition, managerial training benefits smaller and younger firms, while staff training benefits larger and older firms. The findings expand understanding of the gains to productivity from both quantity and quality of training and how firms can make wise training investments.
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Speaker: Dr Maria Wishart (Warwick University)
Title: Employee Well-Being, Mental Health and Productivity in Midlands Firms: The Employer Perspective
Abstract: This study explored the prevalence and nature of poor mental health in the workplace and the impact on business performance and productivity, through a survey of 1,899 private sector establishments in the Midlands and in-depth interviews with 20 survey respondents.

31% of firms surveyed reported mental health sickness absence, of which 55% reported an impact on firm performance. The type of impacts typically reported in the survey included effects on the workload and morale of the team, the cost of replacing absent staff, reduced service levels and reduced efficiency. However, we noted a reluctance among firms to formally measure the productivity impacts of poor mental health, which indicates that these impacts are probably under-recorded.

Our analysis of the survey data found that sickness related to mental health was associated with productivity which was lower by 18.3 per cent, and that mental health impacts were associated with productivity which was lower by 24.5 per cent. These are significant associations between productivity and mental health sickness absence, but our research suggests these costs may not be known to many employers.

Although most of our respondents felt that they do have a role to play in supporting the mental health of their employees, proactive activities to support mental health and well-being were found in only 44% of firms, and only 22% had a mental health plan. Most appeared not to be aware of the best sources of help and advice with putting the right activities into practice.

The study outlined implications for policy and practice, including the need for clear messaging for employers, signposting to relevant resources, and greater partnership working between employers, HR professionals, sector bodies and mental health charities.
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Speaker: Dr David Morris (Nottingham University)
Title: Towards a Regional Approach for Skill Policy.
Abstract:Despite the growing evidence that skill deficiencies have spatial implications and the role of policy frameworks for skill mismatch across Europe, there is still limited attention regarding the role of skills in regional studies. In particular, while the renewed attention towards industrial policy acknowledges the presence of regional divides and skill imbalances, skill policy remains focused on place-neutral provision of vocational education and training. Similarly, regional development policies do not fully consider the role of skills, relying mainly on education levels or sectoral employment as proxies for regional capabilities. This paper aims to provide a critical discussion of skills policy following a regional perspective offering novel insights for a regional approach in skill policy along two main elements. First, we underline the risk of place-neutral skill policy in fostering migration of skills to strong areas and the persistence of skill gaps in struggling areas, calling for a broader perspective on the role of skills beyond traditional education policy and vocational training. Conversely, we renew the case for a place-based perspective for skill policy and argue that a systemic approach connecting different levels of governance and localised stakeholders is necessary to recognise and connect the demand and supply of skills which address the specific needs of diverse regional economic structures. This implies a shift in policy intervention from just supply towards both skill demand and utilisation. Second, we discuss the need to transition from static to dynamic perspectives where regional skill policy does not simply focus on addressing current gaps. Instead, we build on the literature on relatedness and smart specialisation to highlight how skill policy needs to become an integral part of regional transitions, enabling processes of adaptation through upskilling in related areas and advanced competencies. We argue this framework for regional skill policy offers important elements for fostering greater regional balance, facilitating technological upgrading in lagging regions as well as supporting initiatives for greater intra-regional and inter-regional collaboration through enhanced local business ecosystems.
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