What Are the Impacts of Companies Paying for Employees’ Education and Training on Employee Retention, Motivation, and Productivity?

Employer-funded education and training (EFET) has gained increasing attention as a strategic human resource practice for developing human capital and enhancing organizational performance. However, empirical evidence on its effectiveness remains limited in emerging economies, particularly within the Kingdom of Saudi Arabia (KSA), where workforce localization and human capital development are central to Vision 2030. This study examines the associations between EFET participation and three key employee outcomes: motivation, retention intention, and productivity. Using a quantitative research design, data were collected from 200 employees and managers across multiple sectors in KSA through a structured questionnaire. Structural Equation Modeling (SEM) was employed to test the hypothesized relationships while controlling for gender, age, sector, and years of experience. The results indicate that EFET participation is positively and significantly associated with employee motivation, retention intention, and self-reported productivity, with the strongest association observed for retention intention. Model fit indices demonstrate an excellent overall fit, supporting the proposed model’s robustness. By integrating Human Capital Theory with empirical evidence from the Saudi context, this study contributes to the literature by extending understanding of how employer-funded education functions within a non-Western labor market. The findings offer practical implications for organizations and policymakers seeking to optimize education and training investments in support of sustainable workforce development and Vision 2030 objectives.