The effects of training on performance in service companies: A data panel study

Purpose – The aim of this paper is to determine whether the effort invested by service companies in employee training has an impact on their economic performance. Design/methodology/approach – The study centres on an intensive labor sector, where the perception of service quality depends on who renders this service. To overcome the habitual problems of transversal studies, the time effect has been considered by measuring data over a period of nine years, to give panel data treatment with fixed effects. Findings – The prepared models give clear empirical support to the hypothesis that training activities are a positive influence on company performance. Research limitations/implications – The results obtained contribute empirical evidence about a relationship that, hitherto, has not been satisfactorily demonstrated. However, there may be some limitations related to the use of a training indicator based on effort and not on results obtained, with low representation of what happens in the smaller companies that lack structured training policies, or with no differentiation between generic or more specific training. Practical implications – The results obtained can contribute towards increased manager awareness that training should be treated as an investment and not considered as an expense. Originality/value – The main contributions can be resumed in three points: a training measurement has been used, based on three dimensions, which presumes to be an improvement on the more frequent method of measuring this variable. A consistent methodology was used that previously was not applied in the analysis of this relationship, and clear empirical evidence has been obtained concerning a relationship that, frequently, is mentioned with theoretical arguments, but which needs more empirical evidence.