What Role Did Management Practices Play in SME Growth Post-Recession?

Small and medium-sized enterprises (SMEs) contribute significantly to aggregate economic growth but little is known about the role played by management practices in SME growth since recession. We link detailed information on SME management practices from the 2011 Workplace Employment Relations Survey (WERS) to firms’ employment and turnover taken from the UK’s Business Structure Database (BSD) to examine links between managerial practices and SME growth over the period 2011-2014. We find off-the-job training is the only management practice that is robustly and significantly associated with higher employment growth, increased turnover, and a decline in closure probabilities, over the period. The findings suggest SME investment in off-the-job training is sub-optimal in Britain such that firms could benefit economically from increasing the amount of off-the-job training they offer to their non-managerial employees.