Training Within the Firm

About this event

Training investments are critical for firm and worker productivity. However, the implementation of these generally centrally designed programs is fraught with difficulties, starting with low take-up and low worker engagement. Do middle managers impact training takeup and performance in their teams? We leverage rich administrative data from three firms, a car manufacturer, a fast-food chain, and a retailer, to study the role of middle managers in implementing internal training programs. We show that middle managers have different value added in take-up within the same firm. These differences matter for firm performance. When faced with an exogenous demand shock that increases the need for employee effort, workers reporting to low-training managers show higher absenteeism. Meanwhile, workers reporting to high-training middle managers show no change in absenteeism. We show that the role of middle management becomes more relevant for low-ranked workers, workers more affected by the demand shock, and branches with more competitive labor markets.