IMPACT OF WORKERS' TRAINING ON PRODUCTIVITY IN SMALL AND MEDIUM ENTERPRISES IN NIGERIA

Abstract

Firm productivity has become a crucial component of competitive advantage in modern businesses, prompting concerted efforts towards understanding the underlying factors that drive it. In this study, the impact of workers' training on productivity in small firms is examined. It is argued that firms that regularly train staff members would more generally adopt better production techniques, especially the use of technology, which will aid labour productivity, thereby, boosting innovation and overall productivity. The survey research method was employed in the empirical analysis using data from the World Bank Enterprise Survey for small enterprises in Nigeria. Using the Generalised Method of Moments (GMM) modelling technique, the study found that workers' training is crucial in stimulating productivity among small enterprises in Nigeria. In particular, current training and long-term staff development are found to promote productivity among the firms. It is also shown that training enhances technology diffusion within small firms in Nigeria. These outcomes imply that SMEs that engage in direct training have better opportunities for productivity growth, especially in the long term in Nigeria. It is, therefore, recommended that targeted employee training programmes should be adopted by small businesses as part of their growth and development strategies.