The links between training and profit are revealed in research commissioned by the Learning and Skills Council. It found that small or medium-sized organisations that invested an average of pound;7,250 a year in training typically grew by 13 per cent. Those that did not grow at all invested an average of pound;4,750.

Bryan Sanderson, chairman of the council, said: “Some businesses still question the impact of training on the bottom line. This research will pull them up short. It shows that without training, profits and growth are significantly lower.

“Extra money spent on skills training has a high gearing in terms of profit growth. It makes good business sese.”

The research was conducted among 800 businesses across the UK. Seventy-five per cent of companies which have seen measurable staff improvements following training also saw profit increases.

Nearly all companies were in favour of training - but only half had increased their budget - the key measure that links training strategy to profit-making.

* New figures released this week show that employers last year spent pound;23.5 billion on training - more than ever before. There has been a 25 per cent increase in real terms since 1993 in the amount that employers spend on training courses, according to the Learning and Training at Work 2000 report.

The figure is made up of more than pound;14bn for off-the-job training and pound;9bn for on-the-job. It includes cash and opportunity costs.