Effects of Employee Training and Development on Firm Performance: Evidence from Successful Companies in the Republic of North Macedonia

Abstract

Employee training is an indispensable strategic tool for enhancing business performance and creation of a sustainable competitive advantage. The main purpose of the training is to develop employee's knowledge, skills and abilities, which eventually results in improved organizational and financial performance. The present study examines the association between employee training and firm performance in the best performing companies in the Republic of North Macedonia. We specifically suggest that investments in employee training, by adopting various sets of training practices, may have a positive effect on firm profitability. The research hypothesis was empirically tested on a sample of 59 private sector companies in diverse industries. The sample was drawn from the target population of the 200 most successful companies in the Republic of North Macedonia. Data collected from the respondents was analysed by applying statistical methods. The results indicated weak but a statistically significant positive correlation between the two researched variables. Moreover, the research results show some evidence that employee training is confirmed as a predictor of profitability. Also, findings revealed that the various aspects (practices) of the overall employee training and development construct have a significant strong positive correlation with each other, suggesting that the effects of training practices are stronger when used simultaneously, in combination with each other. The research highlights the need for businesses to be focused on and invest more in building employee competences in order to attain better bottom-line results.