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The purpose of this paper is to provide a better methodology for evaluating the value of corporate training to make it easier to compare with other organizational investments. The paper also seeks to propose and demonstrate how “time value of money” and “hurdle rate”, which are significant components of traditional investment valuation methods, can and should be incorporated into the valuation of organization training.

The training investment evaluation methods most commonly used by the training professionals were identified and compared to investment evaluation techniques used to measure the value of other investments made to improve and expand business activities.

The survey of training investment evaluation literature showed that there are two major problems in the methods utilized by the training professionals. One of the problems was associated with the measurement and monetization of costs and benefits of the training activity. The other was the non‐comparable return values’ generated by the non‐uniform methodologies used by the training professionals. Both of these issues were addressed and shortcomings of the currently used methodologies where changes should be made to improve this process were identified. A new methodology, which will make the evaluation process more acceptable to the company management, was developed and its use was demonstrated.

Unfortunately, the issues associated with monetization of costs and benefits could not be fully addressed. This is much more organization specific and specific to the type of training provided. However, some examples were provided of how this activity could be uniformly applied.

The paper provides a new and more acceptable methodology for the use of training professionals and organizations to evaluate the value of training.

This paper applies a “financial analyst” or a Chief Financial Officer perspective to organizational investment in training and provides a tool for evaluating its value the same way organizations evaluate their other investments (e.g. acquisitions, factory expansions, product development).

Human capital is acquired not only through formal education (e.g. general skills) but also through training at the workplace. Prior studies have ignored the role of government subsidies explicitly for on-the-job training, which may influence firm training decisions and firm innovation performance. Hence, the authors establish a comprehensive theoretical framework to consider these issues and fill these gaps.

Considering the Chinese manufacturing firms listed in the Shanghai and Shenzhen Stock Exchange from 2010 to 2017, the authors investigate the influence of training investment on innovation performance by illustrating the role of human capital updating in enhancing firm innovation. The authors also explore serval mechanisms on how training investment influences innovation performance.

The authors propose that training investment promotes firm innovation performance, whereas government training subsidies negatively moderate this relationship. The authors also reveal how technicists' involvement and corporate culture mediate the relationship between training investment and innovation performance.

This study provides policy implications for stimulating firm innovation by improving learning and absorption ability, strengthening cultural identity and implementing system norms. Effective policies should be adopted to provide subsidies for on-the-job training of enterprises, particularly for firms with technical executives and firms in diversified life-cycle.

This work contributes to the literature on the role of on-the-job training in promoting firm innovation and reveals the crowding-out effect of subsidies. This study also shows the heterogeneous effects of training investment on firm innovation.

Few people would contest the statement that ‘training is an investment’. It is an investment in the future, one which it is essential for industry to undertake in order to meet the continually growing demand for skilled personnel to handle the ever increasing pace of change. Rightly, then, training as an investment is emphasised on basic training officer courses, it is the subject of many a Government exhortation and prominent businessmen go out of their way to emphasise their belief in it. It is widely publicised by the Industrial Training Boards. The slogan ‘train and gain’ was not coined by an Industrial Training Board simply to advertise the fact that they had been throwing money around as though it were going out of fashion, it was also intended to emphasise the long term gains to be made by investing in training. Looking even further back to the discussions which preceded the passing of the Industrial Training Act, one of the objectives much stressed when the levy and grant system was established was to spread the costs of this investment evenly across industry. The firms who undertook training were to be subsidised by those who benefited from it but did not undertake it. Talking and listening to training practitioners it seems axiomatic that training is an investment and equally axiomatic that, due to the inexplicable failure of management to recognise this, it is one which is in danger of being seriously neglected. To doubt what is so evidently the case is something which, in the training field, amounts to nothing less than heresy.

This paper explores the role of effective resource and knowledge management capabilities on product innovation capabilities of the small and medium-sized enterprises (SMEs). Specifically, the authors research the role of the human resource investments in the form of employee training in developing firm's innovation capabilities and how SMEs manage these investments when we account for the boundary conditions such as the level of employee education, SME size and the frequency of investments in research and development (R&D).

The authors use survey data conducted by The Centre for European Economic Research (Zentrum für Europäische Wirtschaftsforschung – ZEW). The final sample for analysis includes 983 SMEs from Germany that belong to 13 different industries. The authors use hierarchical OLS regression to test the hypotheses presented in this paper.

The authors find a positive association between increased investments in employee training and product innovation capabilities in the context of SMEs. More specifically, the authors’ findings support that (1) the relationship between employee training and innovation capabilities is weaker in industries with greater proportion of employees with university degrees, (2) the effectiveness of investments in employee training is lower among larger SMEs than smaller SMEs, and (3) continuous R&D weakens the relationship between training expenditure and innovation capabilities. While on the one hand the authors’ findings contribute to the debate of whether employee training is necessary for SMEs by affirming this notion, on the other hand the authors show that investments in employee training have differing implications for small and large SMEs within boundary conditions. Moreover, these findings have practical implications for the managers of all SMEs in terms of management of their knowledge resources.

The authors’ research makes important contributions to the study of innovation in SMEs. First, the authors contribute evidence to the debate whether employee training is necessary for SMEs by showing that employee training is particularly important for SMEs that are smaller in size, have lower proportion of employees with university degrees and when they invest in research and development in a targeted manner. The authors also demonstrate that investments in employee training is not a waste, rather such investments can increase the likelihood of survival for many of these firms through its positive impact on product innovation.

For managers of SMEs, the authors’ findings suggest that while investments in employee training are important, the managers of particular SMEs with above-mentioned qualities should be persistent in such investments and must make deliberate efforts to reap the benefits in terms of innovative capabilities. Unlike large firms, who have the financial means to carry out investments in an abundant manner, SMEs appear to be more enterprising with their scarce resources when we also consider the role of investments in human resources.

The authors’ research makes important contributions to the study of innovation in SMEs. First, the authors contribute evidence to the debate whether employee training is necessary for SMEs by finding that employee training is particularly important for SMEs that are smaller in size, have lower proportion of employees with university degrees and when they do not invest in R&D continuously. The authors also demonstrate that investments in employee training is not a waste, but such investments can increase the likelihood of survival for many of these firms.

Given the rapid changes in economies, labour organisations and production processes and technologies, investment in training and in developing human resources becomes more important than ever. One of the core issues in the present debates, however, concerns the issue of the funding. The increasing pressure on public funds clearly delineates that expanding investments should not be expected from this side. Governments are already seeking alternative funding mechanisms for education to decrease costs and increase individual responsibility for one's own human resources. An increased investment should therefore come from enterprises and individuals. Disparities in investment between different categories of enterprises and in participation between different groups of (un)employed indicate, however, that there are still market imperfections. This raises the issue of the adequacy of existing instruments for stimulating investment in human resources and actually raising the level of investment.

Addresses the question of whether a high turnover of staff is accompanied by lower investment in company‐training. By means of a written questionnaire, data were collected from 223 companies in four different sectors: the food sector, the wholesale trade, the printing industry and the software sector. Besides the turnover of staff, introduces the degree of contractual flexibility and the existence of an internal labour market as explanatory variables in the discussion. In contradiction to most labour economic thinking on training, finds a positive relationship between fluctuations in the number of employees and the investment in training. The findings indicate that company training is particularly concentrated on inflow and replacement problems. Therefore, concludes that financial support measures of governments might benefit more the recruitment policy of companies instead of the high ideal of “lifelong learning”.

The main aims of this paper are to determine the extent to which experienced traders in investment banks based in London are learning by informal methods, which methods are to the fore, and whether HRD staff are providing support for informal learning. It also seeks to find evidence that such investment banks were attempting to become learning organisations.

Empirical research was conducted involving in‐depth semi‐structured interviews with experienced traders, line managers of traders, and HRD professionals involved in the training of traders in London based investment banks.

Most of the ongoing learning conducted by traders was informal, and on‐the‐job in nature. This informal learning was ad hoc, poorly recorded, and limited in scope. Support of line managers to learning by their subordinate traders was patchy, with little accountability. HRD professionals were almost entirely concerned with organising formal training courses, and had little knowledge of, or involvement with, informal learning by traders. There was very little evidence of investment banks striving to become learning organisations.

The research study was limited to those investment banks willing to take part in the study, and by the banks selecting those to be interviewed.

Investment banks have become a powerful component of the UK economy, and the ways in which their traders learn, or could learn, effectively in terms of competence improvement is key to the performance of these banks.

Informal learning by traders in investment banks in the UK has been little researched to date. This paper addresses this inadequacy.

The purpose of this paper is to examine the relationship between training and development investment and financial performance over time. Human capital literature suggests that training and development investment may not immediately affect financial performance but may instead create effects that are realized over time. However, most existing cross-sectional research explores the influence of training and development investment on performance while overlooking training and development investment’s long-term effects.

This study focuses on the recovery period following the Great Recession circa 2008 in the South Korean business context. Longitudinal data from 312 firms, including four distinct waves, were used. Latent growth modeling was used to help identify a pattern of reciprocal relationships between training and development investment and financial performance over time.

The results indicate that even though growth in training and development investment is stable over time, there are significant between-firm differences in training and development investment trajectories over time. Prior financial performance was shown to be positively related to higher levels of training and development investment, but it was not related to growth in training and development investment. The initial level of training and development investment did not predict subsequent profit, but growth in training and development investment was positively related to future financial performance.

This study suggests that as an organization’s training and development investment increases over time, a delayed effect on financial performance may emerge because of this accumulated investment. Ultimately, the results highlight the importance of having a stock of human capital, rather than concentrating upon momentary flows that yield immediate effects.

The purpose of this paper is to examine empirically the impact of human capital development in organizations. It is based on some conceptual aspects of human resource accounting and considers how investments in the development of human capital can be measured in order to investigate the financial returns for organizations.

The study is exploratory in nature as this is the first of its kind in the Pakistani manufacturing sector. The technique of convenience sampling was used to collect the data due to time and resource limitations. The sample comprises of 30 leading companies in the Pakistani textile sector. A self‐administered postal questionnaire was designed for the research survey. The results focus on the benefits derived by using the capital investment appraisal techniques of human resource accounting including: return on investment, benefit to cost ratio, weighted average cost of capital, and bottom line evaluations.

The results provide evidence of an association between investment in the development of human capital and the benefits, which organizations can reap from such investments. It further finds that the organizations investing in training and development programs provide high employee productivity that ultimately contributes towards high‐organizational performance.

Owing to the research design, the results may exhibit a lack of generalizability to other sectors. As the results cannot be applied to other organizations, further research can be done by using the same techniques.

This paper is a groundbreaking work in Pakistan and thereby an addition to the existing global literature on human resource accounting. This research provides new directions for the literature in this area, by encouraging a debate about the importance of investing in the development of human capital.

The purpose of this paper is to derive an empirical method to identify different types of training strategies of companies based on publicly available company data.

Using a ten‐year panel, the within‐firm retention rate, defined as the average proportion of apprentices staying in a company in relation to all apprenticeship graduates of a company over several years, was analyzed. The within‐firm retention rate is used to identify these companies' training strategies.

It was shown that companies' motivation for apprenticeship training in Germany is not homogeneous: 19 percent of all companies follow a substitution strategy and 44 percent follow an investment strategy. The determinants of the substitution strategy were estimated and, for example, sizeable differences were found between sectors with different skill requirements and between firms' coverage of industrial relations.

The method is well suited to classify substitution‐motivated training firms but it is less precise in identifying the investment motivation. Moreover, very small firms which train only one apprentice need longer panel duration for precise results and therefore the classification results are less precise for very small firms.

The classification can be used to identify determinants of company participation in apprenticeship training and to predict changes in demand for apprentices.

A simple and innovative method of identifying different types of training motivation with publicly available company data was derived, which has so far been possible only with very detailed company‐specific apprenticeship surveys.