MIT Sloan Study Looks at How Soft Skills Boost Productivity and ROI

Business Schools lay particular emphasis on students developing soft skills along with theoretical knowledge and technical skills to succeed in the global marketplace. Essentially, these skills are about being a team player, strong communicator, a good listener and one who is able to manage time and priorities.  

Namrata Kala, an assistant professor of economics at MIT Sloan, along with colleagues at the University of Michigan and Boston College, conducted a study on whether such skills could be taught to adults who lack them and the benefits brought to the workplace.

Initially, it was not clear whether soft skills would have any relevance in a garment assembly line given the repetitive nature of the work. “It wasn’t immediately obvious that soft skills were going to matter in this setting,” said Kala.

The study was conducted at five factories of Shahi Exports Private Limited, an Indian garment manufacturer in Bangalore. The researchers found that a 12-month soft skills training program had delivered substantial returns. The training dealt with improving the communication skills, problem-solving and decision-making abilities, time and stress management, financial literacy, legal literacy, social entitlements and execution excellence.

Initially, it was not clear whether soft skills would have any relevance in a garment assembly line given the repetitive nature of the work. “It wasn’t immediately obvious that soft skills were going to matter in this setting,” said Kala.

“But we found they did matter. When you’re on a production line for eight hours you need to communicate with other team members, you need to meet the deadline, and you need to listen closely to your boss who is walking up and down giving instructions,” she added.

An assessment of the training program costs against increased revenue revealed that the in-factory soft skills training returned roughly 250% on investment within eight months of its conclusion. Boosts in worker productivity accounted for much of this gain, but a number of other factors contributed, like the ability to perform complex tasks more quickly, short-term gains in improved attendance, and increased retention during the training.

The study also found that even those employees who did not participate in the training program but worked on the same assembly line as those who received the training showed improvement in workplace productivity.

Kala and her colleagues also conducted a survey of the women employees who had participated in training and those who had not. While those who underwent the training had marginally larger incomes of half a percent, they had better opinions of themselves as workers, took more advantage of government programs, were more likely to request training for hard skills, and saved more for their children’s education.

The soft skills program seemed to empower women both in and out of the workplace. “We found evidence of benefits on both sides, employer and employee,” Kala said.

MIT Sloan says the results of the study is of significance to emergent economies across the globe where young, unskilled and semi-skilled labourers were shifting from self-employment in rural areas to wage earners in cities often with women constituting the bulk of this group.