On-the-job training and firm productivity in Italy

The notion of human capital has been a prevailing issue in managerial and economic writings for the past several decades. In reality, ongoing employee learning is now a key component of corporate productivity improvement, as well as maintaining companies competitive in an increasingly rapid, technologically sophisticated environment. Although actual productivity gains from training are sometimes difficult to quantify and depend on several factors, such as the type of training, level of employee skills, and applicable economic conditions, the new digitalization and changing labor market needs call for more focus on training as a mechanism of innovation and adaptation. Perhaps the most contentious issue associated with workplace training is whether or not it is of any benefit to the individuals and to the companies that have sponsored such training. Thus training increases human capital for the worker. This in turn increases employability and the probability of promotion and may lead to greater prosperity. The argument rests on the economic theory of human capital hypothesis (Becker, 1964). Within the theory in which companies invest in training, there will be a contingent improvement in the productivity of that company, since one expects a more productive workforce to yield yet greater performance, innovation, and thus returns.