The UK has experienced persistently weak productivity growth since the 2008 financial crisis, with annual growth averaging just 0.5 per cent since.
However, according to a major new research programme from Aston University's Centre for Business Prosperity, the issue is not that UK businesses train too little, but that training investment is often directed in the wrong way.
The research identifies which types of workplace training generate the strongest productivity gains and quantifies their potential impact on the wider economy.
Drawing on datasets covering 19,289 UK firms between 2011 and 2019, the research provides one of the most detailed analyses to date of the relationship between workforce training and business productivity.
The findings reveal that the intensity and quality of training matter significantly more than simply increasing participation.
Researchers found that deeper investment in training generates productivity gains of between 5.5 per cent and 10.8 per cent, while broad but shallow training programmes deliver far more limited returns.
Training professional and technical staff was found to have the greatest impact, producing productivity improvements almost double those associated with general workforce training.
The study also found that businesses achieve the strongest results when they invest in both manager and employee development simultaneously, with combined training generating productivity benefits 20 to 25 per cent greater than investment in either group alone.
The research programme includes two complementary publications. An academic paper presents extensive econometric analysis using advanced statistical techniques to isolate the causal impact of training on productivity.
A companion insight paper translates those findings into practical recommendations for policymakers and explores their implications for national economic performance.
Researchers estimate that relatively modest improvements in training effectiveness could generate between £44 billion and £46 billion in additional economic output, equivalent to around 1.5 per cent to 1.6 per cent of UK GDP.
Under more ambitious scenarios, where firms expand training coverage while increasing investment in professional and technical roles, gains could reach between £245 billion and £265 billion, representing up to 9.2 per cent of GDP and making a significant contribution towards closing the UK's productivity gap.
Among the key findings were that staff training expenditure generates approximately 2 per cent productivity gains for every 20 per cent increase in spending.
Manager training generates productivity gains of approximately 3.6 per cent, while professional and associate professional staff training delivers productivity improvements of 10.8 per cent for every 10 percentage-point increase in coverage.
The research also highlights several barriers that prevent organisations from investing in the most effective forms of training, including financial constraints, concerns over employee turnover, organisational capability gaps and limited information about what works.
The authors argue that policymakers should focus on strengthening the evidence base around training interventions and evaluating which policy mechanisms are most effective for different sectors and types of business.
Lead author of the research Professor Jun Du said: “The UK's productivity challenge has been debated for many years, but our findings show that the solution is not simply more training.
“What matters is investing in the right people, with sufficient intensity and in ways that develop capability throughout the organisation.
“Businesses that combine workforce and management training achieve significantly greater returns than those focusing on either area in isolation.”
