Employee Training in SMEs: Effect of Size and Firm Type-Family and Nonfamily

TLDR

The study investigated how firm size and family versus nonfamily status affect informal and formal training programs in SMEs. The authors compared 448 family and 470 nonfamily SMEs across four size categories using multivariate ANOVA. Informal training is common across all SME sizes, while formal, structured training rises with firm size—particularly for 20–99 employees—though this trend appears only in nonfamily firms, whereas family firms increase formal training only during the 20–49 employee growth phase, resulting in the largest training gaps at 50–99 employees that narrow at 100–199 employees, reflecting family firms’ slower growth, informal management, limited resources, and efficiency focus.

Abstract

The study examined the main and interaction effects of size and firm type on a variety of informal and formal training programs in small and medium-sized enterprises (SMEs). Samples of 448 family and 470 nonfamily SMEs were separated into four size groups and differences were assessed using multivariate analyses of variance. The results point to prevalence of informal training for all sizes and an increase in adoption of formal, structured, and development-oriented training with increasing firm size (especially for firms with 20–99 employees). This pattern was evident for nonfamily but not for family firms. For family firms, formal training programs increased significantly during the critical growth phase only (20–49 employees). Gaps in employee training between the two types of firms were greatest at 50–99 employees but narrowed thereafter at 100–199 employees. The approach to employee training in family SMEs is in consonance with their slower growth, informal management styles, limited financial resources, and greater emphasis on efficiency compared with nonfamily SMEs.