Planning Employee Training: Who Should Learn What, and Why

Why training in small businesses often follows chance

Anyone who asks in a business with 20 employees why someone attended a particular training often hears the same answers. The course happened to be on offer. The colleague wanted to go. There was still budget left in December. Rarely is the answer that the business will need a capability in two years that is missing today.

That is understandable. Small businesses have no HR department, and every hour of training is missing from daily business. At the same time, requirements change faster than they used to: new software, new regulations, new customer expectations. And experienced employees retire and take knowledge with them, as the article securing knowledge before experienced employees leave describes.

This guide therefore answers one question: How does a small business plan training so that the right people learn the right things and it arrives in daily work? To answer it, I first clarify the terms, present human capital theory as a mental model, weigh the concern about training people for the competition, summarize the findings on impact and transfer, and finally build a one-page plan.

What is meant by training

Training here means any planned learning by employees after their initial education that the business initiates or supports. This includes seminars and courses, but also learning on the job, for example when an experienced colleague introduces a younger one to a machine, or a supplier gives a product training. It must be distinguished from onboarding, which describes a new person's path to full independence and is covered in the guide onboarding new employees.

A second important term is transfer. Blume, Ford, Baldwin, and Huang (2010) understand it to mean that what was learned is applied to the job and maintained there over time. A training after which nobody does anything differently has no transfer, even if everyone liked it.

The mental model: general and firm-specific knowledge according to Becker

In his human capital theory, the economist Gary Becker introduced a distinction that is useful for every training plan. General human capital is knowledge that is equally valuable in many businesses, such as a welding certification, a spreadsheet course, or a forklift license. Firm-specific human capital is knowledge that counts mainly in one's own business: the processes, the machines, the customers, the in-house software.

An uncomfortable consideration follows from this. According to Becker, businesses have little incentive to pay for general knowledge, because employees can take it to another employer who then pays them better. Konings and Putseys (2026) cite exactly this consideration as the reason why many countries subsidize training. For firm-specific knowledge the incentive is greater, because it is worth little outside.

For an owner, the model is not an argument against general training. It helps to ask the question correctly: what knowledge does the business need, how much of it is general, and how can the risk that someone leaves with what they have learned be shared?

Are you training people for the competition? Two views

The first view is that of many owners, and it corresponds to the model. Whoever invests heavily in training an employee makes them more attractive to other employers. In a tight labor market, this can mean that the business pays for the training and another reaps the benefits. From this perspective, restraint with general courses is reasonable.

The second view draws on findings from practice. Konings and Putseys (2026) evaluated the “SME e-Wallet” funding program in Flanders, which reimburses small enterprises 30 and medium-sized ones 20 percent of the cost of external training, up to 7,500 euros a year. Their sample comprised 172,039 companies. Over four years, employment, value added, wages, and productivity rose in subsidized businesses. The effect came almost entirely from very small firms with up to five full-time employees; larger ones showed hardly any effect.

In the very small firms, training expenditure rose by 217 percent and training hours by 55 percent in the year of the subsidy. Three years later there were 50 percent more trained and 29 percent more skilled employees. The authors explain this by very small firms being more financially constrained and finding it harder to retain good people. A second study points in the same direction: Georgiadis and Pitelis (2016) used a funding program in the United Kingdom in which places were assigned at random because there were more applicants than places. In small and mid-sized businesses in accommodation and food services, the training of employees had a stronger effect on productivity and profit than that of managers.

I consider the second view the sounder one, with one condition from the first. The risk of leaving is real, but it is smaller than the risk of working with outdated knowledge. The article employee retention in small businesses shows that people stay when they experience links, fit, and development. Training that fits the position and opens up a perspective strengthens exactly that. Protection against leaving therefore does not lie in forgoing training, but in linking it to a task for which what was learned is needed.

The most expensive training is the one after which nobody does anything differently. The second most expensive is the one that does not take place.

Making learning stick: transfer

Whether a training works is largely decided after the training. Blume, Ford, Baldwin, and Huang (2010) analyzed 89 studies on transfer in a meta-analysis. Characteristics of the participants, such as ability, conscientiousness, and motivation, and a supportive work environment were positively associated with transfer. Most of these associations were stronger for open skills such as leadership or customer conversations than for closed ones such as operating a particular piece of software.

The authors point to a limitation that matters in practice. When participants rate their transfer themselves, in the same questionnaire as the other characteristics, the associations come out too high. Anyone who wants to know whether a training works should therefore not only ask how it was, but observe what changes.

For evaluation, a simple scheme going back to Donald Kirkpatrick has proven itself. It distinguishes four levels of impact.

The one-page training plan

A plan for a small business needs no software and no HR department. It fits on one page and is created once a year, ideally together with annual planning as described in the guide annual planning in the business.

1. Derive needs from strategy

   Which capabilities will the business need in two years that are missing today or depend on one person? Examples: a second person who can calculate quotes, knowledge for a new machine, handling e-invoicing.

2. Determine the gap per person

   One line per employee: what can they do today, what should they be able to do in a year? The answer emerges in conversation, not at the owner's desk.

3. Choose the format

   Not every gap needs a seminar. Often, learning on the job with an experienced colleague, a manufacturer's training, or an online course is enough. Seminars pay off mainly for general knowledge and certificates.

4. Agree on transfer

   Before each measure, set a task in which what was learned will be applied, and a date for a short conversation afterward.

5. Check impact

   After eight weeks check the behavior level, after a year the results level. Do not repeat measures without impact.

• For every key capability there are at least two people who master it or are learning it.
• Every training in the plan is justified by a need of the business.
• Every employee has at least one learning goal for the next year.
• For expensive general courses there is a written agreement on costs and retention, reviewed by an expert.
• Funding options were checked before booking.

Funding: what the state covers

Especially for small businesses, public funding can share the risk of leaving from the Becker model. In Germany, the Federal Employment Agency (Agentur für Arbeit) funds the training of employees under Section 82 of Social Code Book III (SGB III) under certain conditions. The measure must go beyond a short, purely job-related adjustment, last more than 120 hours, and be approved for funding. For businesses with fewer than 50 employees, an employer contribution to course costs is generally not required. In addition, a subsidy toward wages for the training period is possible, up to 75 percent for fewer than 50 employees.

There are also programs run by the federal states and funding for advanced vocational training such as the master craftsman qualification. The conditions change, so before any larger measure it is worth talking to the employer service of the Federal Employment Agency or the chamber. This overview is not legal or funding advice.

What you can put into practice right away

Getting started with a plan takes a single question to yourself and one to each employee.

1. Write down three capabilities your business will need in two years that are missing today or depend on a single person.
2. In your next one-on-one conversations, ask each employee: what would you like to be able to do in a year that you cannot do today?
3. For the next planned training, set an application task and a follow-up conversation date.

How you as owner learn alongside daily work is described in the guide learning as an owner. How employees develop their own solutions in conversation instead of merely receiving knowledge is shown in the guide the owner as coach.

Conclusion: who should learn what, and why?

We began by asking
a small business plans training so that the right people learn the right things and it arrives. The answer starts with the business's needs, not the seminar catalog: what capabilities will it need in two years, and who lacks them? The concern about training people for the competition is justified according to Becker, but the findings from Flanders and the United Kingdom show that small businesses in particular benefit measurably from training, especially when funding shares the risk.

What determines impact is what happens after the training. Whoever has what was learned applied immediately, provides support, and checks after a few weeks whether something has changed turns an expense into an investment. A one-page plan is enough for that.