Vocational training costs and economic benefits: exploring the interactions
Abstract
The aim of the article is to study the relationship between vocational training costs and economic benefits at different levels of economic relations. In the structure of labour costs in the EU, there was the highest share of vocational training costs in Ireland (2.79%), Great Britain (2.53%), France (1.51%), which is reflected in the economic success of these countries. A comparison with Ukraine, which has European integration intentions, confirms that the underestimated role of investing in lifelong learning has relevant links to economic performance. This study at the enterprise level (based on the survey of 356 employees) found that higher costs of vocational training are a sign of profitable enterprises. At the same time, employees’ interest in short-term training programs is higher, which they obviously assess from the standpoint of higher personal economic benefits in the short term. At the same time, the analysis performed by means of the Fechner correlation coefficient confirms the existence of a positive impact of vocational training costs on changes in the main macroeconomic benefits indicator – GDP per capita. This allows drawing conclusions about the need to develop professional training programs for staff as one of the drivers of macroeconomic development.
Keyword : economic benefits, correlation, labour costs, GDP, vocational training costs
How to Cite
Samoliuk, N., Bilan, Y., & Mishchuk, H. (2021). Vocational training costs and economic benefits: exploring the interactions. Journal of Business Economics and Management, 22(6), 1476-1491. https://doi.org/10.3846/jbem.2021.15571
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Grabara, J., Hussain, H. I., & Szajt, M. (2020). Sustainable university development through sustainable human resources and corporate entrepreneurship: The role of sustainable innovation and work environment. Amfiteatru Economic, 22(54), 480–495. https://doi.org/10.24818/EA/2020/54/480
Grenčíková, A., Kordoš, M., & Navickas, V. (2021). The impact of Industry 4.0 on education con-tents. Business: Theory and Practice, 22(1), 29–38. https://doi.org/10.3846/btp.2021.13166
Guan, X., & Frenkel, S. (2019). How perceptions of training impact employee performance. Personnel Review, 48(1), 163–183. https://doi.org/10.1108/PR-05-2017-0141
Islam, R., Ghani, A. B. A., Kusuma, B., & Theseira, B. B. (2016). Education and human capital effect on Malaysian economic. International Journal of Economics and Financial Issues, 6(4), 1722–1728. https://search.proquest.com/docview/1836597485?pq-origsite=gscholar&fromopenview=true
Krumbiegel, K., Maertens, M., & Wollni, M. (2018). The role of Fairtrade certification for wages and job satisfaction of plantation workers. World Development, 102, 195–212. https://doi.org/10.1016/j.worlddev.2017.09.020
Kruskal, W. H. (1958). Ordinal measures of association. Journal of the American Statistical Association, 53(284), 814–861. https://doi.org/10.2307/2281954
Kumar, R., Mandava, S., & Gopanapalli, V. S. (2019). Vocational training in India: Determinants of participation and effect on wages. Empirical Research in Vocational Education and Training, 11(3), 1–17. https://doi.org/10.1186/s40461-019-0078-y
Martins, P. S. (2020). Employee Training and Firm Performance: Quasi-experimental evidence from the European Social Fund (GLO Discussion Paper Series, No. 488). http://cver.lse.ac.uk/publications/abstract.asp?index=6941
Mason, G. (2020). Higher education, initial vocational education and training and continuing education and training: Where should the balance lie? Journal of Education and Work, 33(7–8), 468–490. https://doi.org/10.1080/13639080.2020.1755428
McGrath, S., & Powell, L. (2016). Skills for sustainable development: Transforming vocational education and training beyond 2015. International Journal of Educational Development, 50, 12–19. https://doi.org/10.1016/j.ijedudev.2016.05.006
Mira, M., & Odeh, K. (2019). The mediating role of authentic leadership between the relationship of employee training and employee performance. Management Science Letters, 9(3), 381–388. https://doi.org/10.5267/j.msl.2018.12.011
Mishchuk, H., Bilan, Y., & Pavlushenko, L. (2016). Knowledge management systems: Issues in enterprise human capital management implementation in transition economy. Polish Journal of Management Studies, 14(1), 163–173. https://doi.org/10.17512/pjms.2016.14.1.15
Mishchuk, H., Roshchyk, I., Sułkowska, J., & Vojtovič, S. (2019). Prospects of assessing the impact of external student migration on restoring the country’s intellectual potential (Case Study of Ukraine). Economics and Sociology, 12(3), 209–219. https://doi.org/10.14254/2071-789X.2019/12-3/14
Muehlemann, S. (2019). Measuring performance in vocational education and training and the employer’s decision to invest in workplace training. In The Wiley handbook of vocational education and training (pp. 187–206). John Wiley & Sons. https://doi.org/10.1002/9781119098713.ch10
National Centre for Vocational Education Research. (2020). Australian vocational education and training statistics: Apprentice and trainee experience and destinations – time series 2008, 2010 and 2019. https://www.voced.edu.au/content/ngv:86981
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Reed, D., Cook, K., & Aloe, A. (2018). A cost-benefit analysis of summer reading programs implemented under state guidelines. Educational Policy, 34(4), 594–618. https://doi.org/10.1177/0895904818802112
Saksiriruthai, S. (2018). Impact of media technology on wage changes: The case of Thailand. Journal of International Studies, 11(4), 69–78. https://doi.org/10.14254/2071-8330.2018/11-4/5
Shah, C. (2017). Employers’ perspectives on training: Three industries (NCVER Research Report). National Centre for Vocational Education Research (NCVER). https://eric.ed.gov/?id=ED577694
Starr, E. (2019). Consider this: Training, wages, and the enforceability of covenants not to compete. ILR Review, 72(4), 783–817. https://doi.org/10.1177/0019793919826060
State Statistics Service of Ukraine. (2020). Labour cost-surveys 2010, 2014 and 2018. http://ukrstat.gov.ua/
Suharno, S., Pambudi, N. A., Widiastuti, I., & Harjanto, B. (2019). Apprenticeship implementation of productive teacher at Vocational School in Indonesia. In 5th UPI International Conference on Technical and Vocational Education and Training (ICTVET 2018) (pp. 88–95). Atlantis Press. https://doi.org/10.2991/ictvet-18.2019.20
Sułkowski, Ł., & Patora-Wysocka, Z. (2020). International entrepreneurship of universities: Process-oriented and capabilities perspectives. Entrepreneurial Business and Economics Review (EBER), 8(3), 175–188. https://doi.org/10.15678/EBER.2020.080310
Tvaronavičienė, M., Tarkhanova, E., & Durglishvili, N. (2018). Sustainable economic growth and innovative development of educational systems. Journal of International Studies, 11(1), 248–256. https://doi.org/10.14254/2071-8330.2018/11-1/19
United Nations Development Programme. (2019). Human development report 2019. Beyond income, beyond averages, beyond today: Inequalities in human development in the 21st century. New York. https://doi.org/10.18356/838f78fd-en
Varma, N. S., & Kataria, N. (2018). Sustainable growth through vocational education: Analysis of its impact on Indian economy. International Research Journal of Marketing and Economics, 5(8), 58–70.
Wang, C., Zhang, B., Oláh, J., & Hasan, M. (2021). Factors influencing the quality of life of empty nesters: Empirical evidence from Southwest China. Sustainability, 13(5), 2662. https://doi.org/10.3390/su13052662
Yusoff, M. N. H., Al Mamun, A., Ibrahim, M. D., & Hassan, H. (2018). Measuring and comparing functional business skills and knowledge among Asnaf community in Malaysia. Economics and Sociology, 11(2), 229–247. https://doi.org/10.14254/2071-789X.2018/11-2/16
Al Mamun, C. A., & Hasan, M. N. (2017). Factors affecting employee turnover and sound retention strategies in business organization: a conceptual view. Problems and Perspectives in Management, 15(1), 63–71. https://doi.org/10.21511/ppm.15(1).2017.06
Al-Ajlouni, M. I., Nawafleh, S., & Alsari, H. (2019). The moderating effect of electronic-HRM on training and employee performance relationship: a moderated model. International Journal of Management Practice, 12(4), 511–532. https://doi.org/10.1504/IJMP.2019.102572
Australian Government. (2020). Productivity commission, national agreement for skills and work force development review (Interim report). https://www.pc.gov.au/inquiries/current/skills-workforce-agreement/interim
Avis, J. (2018). Socio-technical imaginary of the fourth industrial revolution and its implications for vocational education and training: a literature review. Journal of Vocational Education & Training, 70(3), 337–363. https://doi.org/10.1080/13636820.2018.1498907
Bhorat, H., Cassim, A., & Tseng, D. (2016). Higher education, employment and economic growth: Exploring the interactions. Development Southern Africa, 33(3), 312–327. https://doi.org/10.1080/0376835X.2016.1161501
Bibi, M. (2018). Impact of talent management practices on employee performance: An empirical study among healthcare employees. SEISENSE Journal of Management, 2(1), 22–32. https://doi.org/10.33215/sjom.v2i1.83
Bilan, Y., Mishchuk, H., Roshchyk, I., & Joshi, O. (2020a). Hiring and retaining skilled employees in SMEs: problems in human resource practices and links with organizational success. Business: Theory and Practice, 21(2), 780–791. https://doi.org/10.3846/btp.2020.12750
Bilan, Y., Mishchuk, H., Samoliuk, N., & Mishchuk, V. (2020b). Gender discrimination and its links with compensations and benefits practices in enterprises. Entrepreneurial Business and Economics Review, 8(3), 189–204. https://doi.org/10.15678/EBER.2020.080311
Boadu, F., Xie, Y., Du, Y. F., & Dwomo-Fokuo, E. (2018). MNEs subsidiary training and development and firm innovative performance: The moderating effects of tacit and explicit knowledge received from headquarters. Sustainability, 10(11), 4208. https://doi.org/10.3390/su10114208
Choi, S. J., Jeong, J. C., & Kim, S. N. (2019). Impact of vocational education and training on adult skills and employment: An applied multilevel analysis. International Journal of Educational Development, 66, 129–138. https://doi.org/10.1016/j.ijedudev.2018.09.007
Chung, T. A., & Tseng, C. Y. (2019). The knowledge intensity and the economic performance in Taiwan’s knowledge intensity business services. Economic Research-Ekonomska Istraživanja, 32(1), 797–811. https://doi.org/10.1080/1331677X.2019.1583586
Cochran, W. G. (1977). Sampling techniques (3rd ed.). John Wiley & Sons.
Della Torre, E. (2019). Collective voice mechanisms, HRM practices and organizational performance in Italian manufacturing firms. European Management Journal, 37(3), 398–410. https://doi.org/10.1016/j.emj.2018.09.001
Dincă, V. M., Dima, A. M., & Rozsa, Z. (2019). Determinants of cloud computing adoption by Romanian SMEs in the digital economy. Journal of Business Economics and Management, 20(4), 798–820. https://doi.org/10.3846/jbem.2019.9856
Efobi, U., & Orkoh, E. (2018). Analysis of the impacts of entrepreneurship training on growth performance of firms: Quasi-experimental evidence from Nigeria. Journal of Entrepreneurship in Emerging Economies, 10(3), 524–542. https://doi.org/10.1108/JEEE-02-2018-0024
Eurostat. (2020a). Database on Gross domestic product (GDP). https://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=sdg_10_10&plugin=1
Eurostat. (2020b). Database on Labour cost surveys 2008, 2012 and 2016. https://ec.europa.eu/eurostat/data/database
Falola, H. O., Salau, O. P., Olokundun, M. A., Oyafunke-Omoniy, C. O., Ibidunni, A. S., & Oludayo, O. A. (2018). Employees’ intrapreneurial engagement initiatives and its influence on organisational survival. Business: Theory and Practice, 19, 9–16. https://doi.org/10.3846/btp.2018.02
Görlitz, K., & Tamm, M. (2016). The returns to voucher-financed training on wages, employment and job tasks. Economics of Education Review, 52, 51–62. https://doi.org/10.1016/j.econedurev.2016.01.004
Grabara, J., Hussain, H. I., & Szajt, M. (2020). Sustainable university development through sustainable human resources and corporate entrepreneurship: The role of sustainable innovation and work environment. Amfiteatru Economic, 22(54), 480–495. https://doi.org/10.24818/EA/2020/54/480
Grenčíková, A., Kordoš, M., & Navickas, V. (2021). The impact of Industry 4.0 on education con-tents. Business: Theory and Practice, 22(1), 29–38. https://doi.org/10.3846/btp.2021.13166
Guan, X., & Frenkel, S. (2019). How perceptions of training impact employee performance. Personnel Review, 48(1), 163–183. https://doi.org/10.1108/PR-05-2017-0141
Islam, R., Ghani, A. B. A., Kusuma, B., & Theseira, B. B. (2016). Education and human capital effect on Malaysian economic. International Journal of Economics and Financial Issues, 6(4), 1722–1728. https://search.proquest.com/docview/1836597485?pq-origsite=gscholar&fromopenview=true
Krumbiegel, K., Maertens, M., & Wollni, M. (2018). The role of Fairtrade certification for wages and job satisfaction of plantation workers. World Development, 102, 195–212. https://doi.org/10.1016/j.worlddev.2017.09.020
Kruskal, W. H. (1958). Ordinal measures of association. Journal of the American Statistical Association, 53(284), 814–861. https://doi.org/10.2307/2281954
Kumar, R., Mandava, S., & Gopanapalli, V. S. (2019). Vocational training in India: Determinants of participation and effect on wages. Empirical Research in Vocational Education and Training, 11(3), 1–17. https://doi.org/10.1186/s40461-019-0078-y
Martins, P. S. (2020). Employee Training and Firm Performance: Quasi-experimental evidence from the European Social Fund (GLO Discussion Paper Series, No. 488). http://cver.lse.ac.uk/publications/abstract.asp?index=6941
Mason, G. (2020). Higher education, initial vocational education and training and continuing education and training: Where should the balance lie? Journal of Education and Work, 33(7–8), 468–490. https://doi.org/10.1080/13639080.2020.1755428
McGrath, S., & Powell, L. (2016). Skills for sustainable development: Transforming vocational education and training beyond 2015. International Journal of Educational Development, 50, 12–19. https://doi.org/10.1016/j.ijedudev.2016.05.006
Mira, M., & Odeh, K. (2019). The mediating role of authentic leadership between the relationship of employee training and employee performance. Management Science Letters, 9(3), 381–388. https://doi.org/10.5267/j.msl.2018.12.011
Mishchuk, H., Bilan, Y., & Pavlushenko, L. (2016). Knowledge management systems: Issues in enterprise human capital management implementation in transition economy. Polish Journal of Management Studies, 14(1), 163–173. https://doi.org/10.17512/pjms.2016.14.1.15
Mishchuk, H., Roshchyk, I., Sułkowska, J., & Vojtovič, S. (2019). Prospects of assessing the impact of external student migration on restoring the country’s intellectual potential (Case Study of Ukraine). Economics and Sociology, 12(3), 209–219. https://doi.org/10.14254/2071-789X.2019/12-3/14
Muehlemann, S. (2019). Measuring performance in vocational education and training and the employer’s decision to invest in workplace training. In The Wiley handbook of vocational education and training (pp. 187–206). John Wiley & Sons. https://doi.org/10.1002/9781119098713.ch10
National Centre for Vocational Education Research. (2020). Australian vocational education and training statistics: Apprentice and trainee experience and destinations – time series 2008, 2010 and 2019. https://www.voced.edu.au/content/ngv:86981
Ogundari, K., & Awokuse, T. (2018). Human capital contribution to economic growth in Sub-Saharan Africa: Does health status matter more than education? Economic Analysis and Policy, 58, 131–140. https://doi.org/10.1016/j.eap.2018.02.001
Reed, D., Cook, K., & Aloe, A. (2018). A cost-benefit analysis of summer reading programs implemented under state guidelines. Educational Policy, 34(4), 594–618. https://doi.org/10.1177/0895904818802112
Saksiriruthai, S. (2018). Impact of media technology on wage changes: The case of Thailand. Journal of International Studies, 11(4), 69–78. https://doi.org/10.14254/2071-8330.2018/11-4/5
Shah, C. (2017). Employers’ perspectives on training: Three industries (NCVER Research Report). National Centre for Vocational Education Research (NCVER). https://eric.ed.gov/?id=ED577694
Starr, E. (2019). Consider this: Training, wages, and the enforceability of covenants not to compete. ILR Review, 72(4), 783–817. https://doi.org/10.1177/0019793919826060
State Statistics Service of Ukraine. (2020). Labour cost-surveys 2010, 2014 and 2018. http://ukrstat.gov.ua/
Suharno, S., Pambudi, N. A., Widiastuti, I., & Harjanto, B. (2019). Apprenticeship implementation of productive teacher at Vocational School in Indonesia. In 5th UPI International Conference on Technical and Vocational Education and Training (ICTVET 2018) (pp. 88–95). Atlantis Press. https://doi.org/10.2991/ictvet-18.2019.20
Sułkowski, Ł., & Patora-Wysocka, Z. (2020). International entrepreneurship of universities: Process-oriented and capabilities perspectives. Entrepreneurial Business and Economics Review (EBER), 8(3), 175–188. https://doi.org/10.15678/EBER.2020.080310
Tvaronavičienė, M., Tarkhanova, E., & Durglishvili, N. (2018). Sustainable economic growth and innovative development of educational systems. Journal of International Studies, 11(1), 248–256. https://doi.org/10.14254/2071-8330.2018/11-1/19
United Nations Development Programme. (2019). Human development report 2019. Beyond income, beyond averages, beyond today: Inequalities in human development in the 21st century. New York. https://doi.org/10.18356/838f78fd-en
Varma, N. S., & Kataria, N. (2018). Sustainable growth through vocational education: Analysis of its impact on Indian economy. International Research Journal of Marketing and Economics, 5(8), 58–70.
Wang, C., Zhang, B., Oláh, J., & Hasan, M. (2021). Factors influencing the quality of life of empty nesters: Empirical evidence from Southwest China. Sustainability, 13(5), 2662. https://doi.org/10.3390/su13052662
Yusoff, M. N. H., Al Mamun, A., Ibrahim, M. D., & Hassan, H. (2018). Measuring and comparing functional business skills and knowledge among Asnaf community in Malaysia. Economics and Sociology, 11(2), 229–247. https://doi.org/10.14254/2071-789X.2018/11-2/16