Employee Ownership and the Development of Human Capital

An article in the current issue of Economic and Industrial Democracy (vol. 32, no. 3) draws on data from the British Workplace Employment Relations Survey to examine whether employee ownership companies invest more in skills training for their employees. The researchers, Andrew Pendleton and Andrew Robinson, find that "the use of share plans and high employee involvement in them is associated with high training coverage." They suggest that employee owners are more likely to invest in increasing their firm-specific skills because share plans "generate employee commitment and function to lock employees into the firm." As a result, employers are also more likely to invest in training because they face less risk that their investments in training will be lost to employee turnover.