Businesses that invest in training increase their profits nearly twice as fast as those that don't, a study has revealed.
The strong links between increasing employee skills and bottom line performance are highlighted in research published by the Learning and Skills Council.
The report, People and Profit, finds that the difference between those firms that do and don't make financial gains out of training can be an investment of as little as £50 a week.
Bryan Sanderson, chairman of the LSC, said, "Some businesses still question the impact of training on the bottom line. This research will pull them up short. It shows that without training profits and growth are significantly lower.
"The responses of businesses that took part in our research shows that fresh investment in training, typically just an extra £2,500 a year, reaps rewards."
Independent researchers carried out 800 interviews to match the training budgets and attitudes of SMEs to their profits and growth.
They found that companies that increased their annual training budgets saw profits rise on average by 11.4 per cent compared to an increase in profits of only 6.3 per among firms which did no invest in training.
Sanderson added, "We've put numbers on the small cost and huge reward to companies of investing in training. Businesses simply cannot afford not to invest in new skills.
"Businesses make all the right noises about training except for saying yes when it comes to investing. No fine words will keep your business and your people competitive - it's money that talks, in training as in most things."
A nationwide programme to improve knowledge and skills in the workplace is being introduced by the new Learning and Skills Council. It aims to attract 50,000 adults into further education (News, 3 April).
By Ben Willmott