Technical Information: (202) 606-7386 USDL 96-515 Media Contact: (202) 606-5902 For release: 10:00 A.M. EST Thursday, December 19, 1996 BLS REPORTS ON THE AMOUNT OF FORMAL AND INFORMAL TRAINING RECEIVED BY EMPLOYEES Employees who work in establishments with 50 or more workers received an average of 44.5 hours of training in the period May-October 1995, according to a survey of employees conducted by the Bureau of Labor Statistics of the U.S. Department of Labor. Of these total training hours, 70 percent, or 31.1 hours, were spent receiving informal training, while 13.4 hours were in formal training. The survey also found that in the May-October 1995 period, an estimated $647 per employee was spent on wage and salary costs of training, with about 65 percent of the amount spent on informal training. The 1995 Survey of Employer-Provided Training (SEPT95) was sponsored by the Employment Training Administration of the U.S. Department of Labor and involved two major components: (1) a survey of establishments and (2) a survey of randomly-selected employees in the surveyed establishments. In an earlier news release (July 10, 1996, USDL#96-268), BLS reported on findings from the SEPT95 establishment survey, focusing on the amount of formal training provided and selected costs of formal training. This news release provides results from the employee survey, including information on the amount of formal and informal training received and the wage and salary cost of the time that employees spent in both formal and informal training. Over 1,000 employees were surveyed from May through October 1995. Each employee had a personal-visit interview and provided information on his/her age, sex, race/ethnicity, occupation, education, earnings, and tenure, as well as information on his/her past training and its benefits. In addition to this background information, employees were asked to answer a series of questions on the new skills or information they learned each day over a 10- day period. Information was collected on the nature, length, and type of each learning activity. These learning activities were then categorized by BLS as either formal training, informal training, or self learning. (See technical note for additional details on data collection and measurement methods.) Training by type and delivery method While working for their current employers, 84 percent of employees received some kind of formal training and 96 percent received some kind of informal training. (See table 1.) During the six-month survey period, employees received an average of 44.5 hours of training, of which 13.4 hours were spent in formal training and 31.1 hours in informal training. (See table 2.) In other words, 70 percent of the training was conducted through informal instruction. Job-skills training. Computer training, both formal and informal, was the most commonly received type of job-skills training. Thirty-eight percent of employees received formal computer training and 54 percent received informal training in computers while working for their current employer. Professional- and technical-skills training, management training, and sales and customer-relations training also were common types of training: between 27 and 31 percent of employees received these types of formal training while working for their current employer. In terms of informal training, computer training was followed by production- and construction-related training, management training, sales and customer-relations training, and clerical and administrative support skills training. Between 30 and 34 percent of employees received each of these types of informal training while working for their current employer. During May-October 1995, employees received more hours of computer training and production- and construction- related training than any other type of job-skills training. On average, employees received 11.8 hours of computer training during this period. About 5.1 hours, or 43 percent, of computer training was conducted formally, compared with an average of 30 percent for all types of training. In contrast, only 19 percent of the 10.6 hours of production- and construction-related training received was spent in formal training. Clerical, sales, and service- related training also had higher-than-average shares of training that were conducted informally. General-skills training. Among the types of general-skills training, occupational-safety training was the most common with 58 percent of employees receiving formal training in this area while working for their current employer. Communications, employee-development, and quality training was the next most common at 40 percent. The percentages for receipt of informal training were 48 and 33 percent, respectively. The receipt of basic-skills training (i.e., training in elementary reading, writing, arithmetic, and English language skills) was much less common. Only 7 percent of employees received formal training and 3 percent received informal training in basic skills while working for their current employer. In May-October 1995, employees received roughly 2-1/2 hours of training in both occupational-safety and communications, employee-development, and quality training compared with only 18 minutes of basic-skills training. Communications, employee-development, and quality training stood out as the only type of general-skills training where the majority of the training was conducted formally rather than informally. Training by demographic characteristics Age. The youngest and oldest workers were less likely to have received formal training during the last 12 months than were workers ages 25 to 54. (See table 3.) Similarly, the total hours of training during the May-October 1995 period were lowest for the youngest and oldest workers. Workers 24 years of age or younger and workers 55 years or older received about half as many hours of total training as prime- aged workers. (See table 4.) This general pattern is in evidence for both hours of formal and informal training, but particularly for hours of formal training. The relatively low hours of formal training among the very young provides some support for the idea that employers and/or employees may be delaying their investment in training until they are sure the employment arrangement is likely to last. The low hours of training for workers 24 years or younger may also be influenced by the fact that very young workers tend to change jobs frequently and may not have settled into their chosen career. Sex. Men received an estimated 48 hours of training during the six-month survey period compared with 42 hours for women. However, this difference is too small relative to the precision of the estimates to conclude that the hours of training are substantially different between men and women. Race and ethnicity. In general, white workers tended to receive more hours of training (48.5 hours) over the six- month period than either black (27.7 hours) or Hispanic workers (32.7 hours). While blacks received about the same number of hours of formal training as white workers, they received significantly fewer hours of informal training. Educational attainment. Employees with a high-school education or less were not as likely to have received formal training during the last 12 months as more educated counterparts. About 60 percent of those with a high-school diploma or less received formal training during the last 12 months, compared with 90 percent of those with a bachelor's degree or higher. Hours of training in May-October 1995 also were smallest for the least-educated group, though the differences in hours of training per employee across different educational attainment groups were not substantial. Training by employment characteristics Tenure. The number of total training hours per employee over the May-October 1995 period appears to follow a U- shaped pattern with respect to tenure with current employer. For instance, employees with fewer than two years of tenure received an average of 65 hours of training; workers with more than two years but fewer than five years at the establishment received an average of 24 hours, and those with 5-10 years of tenure received 47 hours. (See table 6.) Full- or part-time. Full-time workers (35 or more hours per week) were more likely to have received formal training in the last 12 months than were part-time workers (72 percent versus 56 percent). (See table 5.) Similarly, during the May-October 1995 period, full-time workers received an average of 49 hours of training, versus 13 hours for part- time workers. Full-time workers received nearly five times as much informal training (34 hours for full- versus 8 hours for part-time workers) and three times as much formal training (15 hours versus 5 hours). Occupation. Service workers are less likely than those in other occupations to have received formal training during the last 12 months. Professional and technical workers received the highest number of hours of both formal and informal training in May-October 1995. For formal training alone, there was a considerable gap between the number of hours of training received by professional and technical workers (22 hours) and the number received by employees in most other occupations, particularly managers (4 hours) and service workers (6 hours). Earnings quartiles. Those in the bottom quartile of the earnings distribution were less likely to receive formal training and received fewer hours of formal training than higher earners. Sixty-two percent of those in the bottom quartile received formal training in the last 12 months compared with 84 percent of those in the top quartile. Low earners received 4 hours of formal training during the six- month survey period versus 23 hours for the top quartile. For informal training, however, significant differences across earnings quartiles are not observed. Training by establishment characteristics Establishment size. Employees in small establishments (50- 99 employees) were less likely to have received formal training than those in larger ones. Some 62 percent of those in small establishments received formal training in the last 12 months, versus 73 percent of those in establishments with 100-499 employees and 71 percent in establishments with 500 or more employees. (See table 7.) Hours of formal training per employee increased with size, ranging from 8 hours for small establishments and 17 hours for large ones (500 or more employees) between May and October,1995. There is no clear relationship between establishment size and the hours of informal training per employee. (See table 8.) Industry. The amount of training received by employees ranged from a low of 34 hours per employee in wholesale trade to a high of 51 hours per employee in durable manufacturing during the six-month survey period. Industries varied in the extent to which they relied upon formal training, with the proportion of total hours of training spent in formal training spanning from a low of 12 percent for retail trade to a high of 59 percent for durable manufacturing. Benefits. Employees at establishments providing a greater number of the selected benefits listed in our questionnaire were more likely to have received formal training during the last 12 months. For instance, 77 percent of workers in establishments with eight or more of the selected benefits received formal training in the last 12 months, versus 57 percent in establishments with fewer than four of the selected benefits. Contract workers. Employees in establishments that used some contract workers were more likely to have received formal training during the last 12 months than employees in establishments that did not (77 percent versus 66 percent). They also received more formal training during the six-month survey period (19 hours per employee) than employees in establishments that did not use contract workers (9 hours per employee). Employee Turnover. A relatively small proportion of employees in high-turnover establishments received formal training in the last 12 months (61 percent compared with 75 percent for medium-turnover and 78 percent for low-turnover establishments). The amount of total training received by employees over the May-October 1995 period does not vary much on the basis of an establishment's turnover rate as measured over the three months preceding the survey date. However, workers at establishments with high rates of turnover received less formal training than those with medium or low levels. Benefits employees received from training Among those employees who received formal training while working for their current employer, about 14 percent indicated that they received a promotion when the training was satisfactorily completed or soon thereafter, and 19 percent received a higher rate of pay or bonus. Less than one percent of trained employees indicated that they received no benefits from their formal training. The most commonly cited benefit was that employees "learned a valuable skill that improved their job performance", chosen by 78 percent of trainees. (See table 9.) How formal training is delivered Classes or workshops conducted by company training personnel were the most common types of formal training activities in which employees participated; 76 percent of those receiving formal training reported this activity. This activity was followed by "classes or workshops conducted by outside trainers" and "attending lectures, conferences or seminars" at 48 and 36 percent, respectively. Only 17 percent of those who received formal training in the last 12 months indicated that they had taken courses at educational institutions. (See table 10.) Wage and salary costs of training by establishment characteristics The wages and salaries that employees receive while in training represents an indirect cost to employers of providing training, as the time that employees spend in training is time that could have been spent working at their jobs. The value of that time can be estimated by multiplying an employee's hourly wage by the hours he/she spent in training. This measure is referred to as the wage and salary costs of training. Over the May-October 1995 period, small establishments spent $462 per employee for wage and salary costs, versus $654 for medium-sized establishments and $754 for large ones. The lower spending levels of small establishments were primarily the result of less spending on formal training. Retail trade employers spent the least per employee--$49 per employee as compared with $149 for wholesale trade (the next lowest) and $418 for mining (the highest). (See table 11.) An estimated total of $37 billion was spent on the indirect wage and salary costs of training during May- October 1995. Establishments with 100-499 employees accounted for the largest share of the total ($16.7 billion), compared with $14.6 billion for establishments with 500 or more employees and $5.7 billion for those with 50-99 employees. The service industry spent the most on training, $12.5 billion, primarily reflecting its large share of employment. Mining, with the smallest share of employment, accounted for the least spending, about $306 million. (See table 12.) TECHNICAL NOTE Scope of the survey The data presented in this release represent the universe of employees in private establishments in the 50 states and the District of Columbia that had 50 or more employees during the fourth quarter of 1993 and were classifiable into one of the following 2-digit Standard Industrial Classifications (SIC) based on the 1987 Standard Industrial Classification Manual: Industry SIC code Mining 10, 12 - 14 Construction 15 - 17 Nondurable manufacturing 20 - 23, 26 - 31 Durable manufacturing 24, 25, 32 - 39 Transportation and public utilities 41, 42, 44 - 49 Wholesale trade 50, 51 Retail trade 52 - 59 Finance, insurance, and real estate 60 - 65, 67 Services 07, 70, 72, 73, 75, 76, 78 - 84, 86, 87, 89. Major definitions and concepts A broad view of training is adopted in the employee portion of the 1995 Survey of Employer-Provided Training (SEPT95). A training activity may occur any time employees are taught a skill or provided with information to help them do their jobs better. The skill or information may be learned through formal or informal training methods. Formal training is defined in the survey as training that is planned in advance and has a structured format and defined curriculum. Examples include attending a class conducted by an employee of the company, attending a seminar given by a professional trainer, or watching a planned audio-visual presentation. Informal training is unstructured, unplanned, and easily adapted to situations or individuals. Examples include having a co-worker show you how to use a piece of equipment or having a supervisor teach you a skill related to your job. Job-skills training refers to training that upgrades employee skills, extends employee skills, or qualifies workers for a job. Management training is training in supervising employees and in implementing employment practices. Examples include training in conducting employee appraisals, managing employees, resolving conflicts, following selection/hiring practices, and implementing regulations and policies. Professional and technical skills training is training in professional areas such as engineering, nursing, accounting, science, law, medicine, training, education, and business; or in technical areas such as drafting, electronics, and medical technology. Computer procedures, programming, and software training includes training in computer literacy, security, programming, use of standard commercial and other software, and methods for developing software applications. Clerical and administrative support skills training is training in areas such as typing, data entry, filing, business correspondence, and administrative recordkeeping, including budget and payroll. Sales and customer relations training is training in areas ranging from how to maintain or improve customer relations to specific selling techniques. Examples include training in how to deal with angry customers and information about specific product lines. Service-related training includes training in the traditional service occupations-food, cleaning, protective, or personal services. Examples include training in waiting tables, preparing food, using cleaning equipment, conducting security work, providing care for children or the elderly, tailoring, and barbering. Production- and construction-related training is training in areas such as operating or repairing machinery and equipment; manufacturing, assembling, distributing, installing, or inspecting goods; and constructing, altering, or maintaining buildings and other structures. General-skills training refers to training that is not closely tied to specific job-related skills and/or training that is usually provided to a wide range of workers. It includes: basic skills; occupational safety; employee health and wellness; orientation; awareness; and communications, employee development, or quality training. Basic skills training is training in elementary reading, writing, arithmetic, and English language skills, including English as a second language. Occupational safety training provides information on safety hazards, procedures, and regulations. Employee health and wellness training provides information and guidance on personal health issues such as stress management, substance abuse, nutrition, and smoking cessation. Orientation training introduces new employees to personnel and workplace practices and to overall company policies. Awareness training provides information on policies and practices that affect employee relations or the work environment, including Equal Employment Opportunity practices (EEO), affirmative action, workplace diversity, sexual harassment, and AIDS awareness. Communications, employee development, and quality training is training in public speaking, conducting meetings, writing, time management, leadership, working in groups or teams, employee involvement, total quality management, and job reengineering. An establishment is an economic unit which produces goods or services. It is usually at a single physical location and is engaged predominantly in one type of economic activity. The list of establishment benefits included: Paid vacation, paid sick leave, health-care plan, employee-assistance program, employee-wellness program, pension plan, profit sharing, flexible work schedules, flexible work site or telecommuting, employer-financed child care, and paid parental/family leave. The list of establishment workplace practices included: Pay increases directly linked to mastering new skills, employee involvement in technology and equipment decisions, job redesign or reengineering, job rotation, just-in-time inventories, co-worker review of employee performance, quality circles, total quality management, and self-directed work teams. Labor turnover is measured by computing the ratio of hires and separations in a three-month period to average employment levels. Employment change is measured by computing the ratio of change over a three-month period to the average employment over those three months. Data collection procedures The employee component of SEPT95 was conducted in tandem with the employer survey. (For technical information on the employer survey, see USDL#96-268.) Two survey instruments were utilized--an employee questionnaire and an employee training log. The employee questionnaire focused on employment and demographic characteristics. Questions were included on job, employer and occupational tenure, income, weeks and hours worked, education, sex, age, race and ethnicity, marital status, and number of children. In addition, the employee questionnaire included general questions on types of training provided by the employer during the employee's tenure and in the last 12 months and on the benefits of training. The employee log collected detailed information on all training and learning activities the employee participated in over a 10-day period. The requested information on the activity included a description, its duration, who was involved, and what type of training medium was used. Experienced field economists in the BLS regional offices requested permission from establishment representatives to randomly sample and interview two employees. During the interview, field economists administered the employee questionnaire to the respondent using computer-assisted personal interviewing (CAPI). The field economist then collected the employee log via paper and pencil for the three-day period prior to the day of the interview and left behind a training log for the employee to complete over the next seven days and mail back to the field economist. Sampling Procedures The sampling frame for the employee survey was a listing (usually a payroll listing) of employees supplied by the establishment respondent. The total number of employees on the listing was required to match that reported by the establishment respondent. Field economists used a computer- generated random number program based on a simple random selection method to randomly sample two employees from all of the employees in the establishment. If one or more of the employees was unavailable, the field economists could generate up to six random numbers to try to secure the participation of two employees. For the Employee Questionnaire, each participating employee was assigned an Employee Sampling Factor equal to the total number of employees in the establishment divided by the number of participating employees in that establishment. For the Employee Training Log, each participating employee was assigned a Day Sampling Factor which was equal to the number of days in the survey's reference period (184) divided by the number of days (3 to 10) on the employee training log. Response Of the 1,543 establishments selected, 1,433 were eligible for survey participation (excluding those out-of- business or out-of-scope), and 1,062 participated in the employer survey. The desired employee sample size for the employee survey was 2,866 (two employees from each of the 1, 433 eligible sampled establishments). Usable employee questionnaires were collected from 1,074 employees for a response rate of 37.5 percent. Usable employee logs were collected from 1,013 employees for a response rate of 35.3 percent. Using the 1,062 establishments that participated in the employer survey as the eligible pool for employees, the number of eligible employees changes to 2,214, and the response rate changes to 50.6 percent for the employee questionnaire and 47.7 percent for the employee log. Estimation Missing data. Weighting class non-response adjustment procedures were used for each of the survey's instruments-- the employee questionnaire and the employee training log-and account for the number of sampled establishments that did not provide any data for the instrument or provided data for only one employee. For otherwise usable instruments, a hot- deck procedure was used to impute a value for any item on the instrument for which the establishment or employee could not provide data. Benchmarking. To increase the precision of the estimates, the weights of the usable instruments were adjusted to make the weighted occupational distribution of the instruments the same as the weighted occupational distribution in the BLS Occupational Employment Survey. Weighting. Each of the usable employee instruments has a Final Weight associated with it. For the Employee Questionnaires, the Final Weight is the product of the Establishment Sampling Weight, Subsampling Factor, Employee Sampling Factor, Questionnaire Nonresponse Adjustments, and Questionnaire Benchmark Adjustment. For the Employee Training Log, the Final Weight is the product of the Establishment Sampling Weight, Subsampling Factor, Employee Sampling Factor, Day Sampling Factor, Log Nonresponse Adjustments, and Log Benchmark Adjustment. For technical information on weighting for the employer survey, see news release USDL#96-268. Estimates. For this release, the population total for a variable of interest is estimated by summing, over all usable instruments, the product of an instrument's Final Weight and the instrument's value for the variable of interest. Proportions are estimated by dividing the estimated total for the variable in the numerator by the estimated population count. Rates are estimated by dividing the estimated total for the variable in the numerator by the estimated total for the variable in the denominator. For subpopulation estimates, the summation is over only the instruments that fall within the subpopulation. Reliability of estimates The estimates in this release are based on a probability sample rather than a census of the population. The samples selected for the employer and employee survey were one of many possible samples, each of which could have produced different estimates that may have differed from the results obtained from a census of the population. This "sampling error" or the variation in the sample estimates across all possible samples that could have been selected is measured by the standard error. The standard error of each of the estimates given in this release was calculated using balanced repeated replication. Non-sampling error and quality control measures In addition to sampling errors, estimates are subject to non-sampling errors that can be attributed to many sources: definitional difficulties; differences in the interpretation of questions; errors in recording, coding, or processing the data, etc. Several processes were used in the survey to reduce the non-sampling errors. Survey development. The survey instruments were developed and tested by BLS. There were a number of major testing activities involving the employee survey. The employee questionnaire and log was tested in four focus groups involving 48 employees, 24 one-on-one in-depth interviews, and 10 establishment site visits. Final survey procedures were tested in a 25-establishment field test of the employer/employee survey conducted by BLS field economists. Validation and review. Survey participation was validated for approximately 5 percent of establishments. The establishments contacted for the validation were randomly selected and survey respondents were contacted by telephone to verify participation in the employer and employee components of the survey. Since this was the first time SEPT95 had been conducted, 100 percent of the individual and summarized data were subject to professional review to verify the accuracy and reasonableness of the data. In addition, edit checks were programmed into the CAPI system used by the field economist and also were carried out on the aggregate survey data. A detailed comparison was conducted of training-related characteristics of establishments that did and did not give us permission to interview employees. The comparison indicated that this source of nonresponse bias was not large enough to substantially affect estimates. An analysis of estimates generated using only employees that were selected with the first two random numbers (418 employees) and of estimates generated using employees selected with the first through sixth random numbers (1,074 employees) demonstrated that using the larger sample to generate estimates did not introduce significant bias into the estimates but did significantly reduce the sampling errors of the estimates. Additional information BLS plans to issue a report that provides more detailed information and analysis of SEPT95. For further information, please contact (202) 606-7386.