Technical information: (202) 606-5905 USDL 96-268 Media contact: (202) 606-5902 For release: 10:00 A.M. EDT Wednesday, July 10, 1996 BLS REPORTS ON THE AMOUNT OF EMPLOYER-PROVIDED FORMAL TRAINING Employees in establishments with 50 or more workers received an average of 10.7 hours of formal training in May through October 1995, according to a survey of employers conducted by the Bureau of Labor Statistics of the U.S. Department of Labor. The number of formal training activities averaged 2.1 per employee during this 6-month period. The survey, sponsored by the Employment and Training Administration of the U.S. Department of Labor, measured three different aspects of training. The first, the average number of hours of training per employee, and the second, the average number of training activities per employee, were measured for the May-October 1995 period. The third, which measured expenditures per employee in four selected spending categories, was reported for the 1994 calendar year. The survey found that during 1994 establishments spent an average of $139 per employee for the wages and salaries of in-house trainers; $98 per employee for outside trainers; $51 per employee for tuition reimbursement; and $12 per employee for contributions to outside training funds. The results provided in this report do not include estimates of the wage and salary value of time employees spend in training-related activities. Moreover, information is not provided on other selected expenditure categories such as payments for training-related equipment, supplies, space, and travel. Thus, it is not possible to use the data presented here to calculate total expenditures on training. The survey consisted of personal visits to more than 1,000 private nonagricultural business establishments from May through October 1995. Formal training, as defined in the BLS survey, is training that has a structured format and a defined curriculum, and may be conducted by in- house trainers, supervisors, company training centers, outside trainers or training companies, schools, associations, or others. It may include classroom work, seminars, lectures, workshops, and audio-visual presentations. See technical note and tables for additional measurement categories. Training hours and activities per employee by establishment size, industry, and type of formal training During the 6-month reference period, smaller establishments (50-99 employees) provided less formal training to their employees on average (6 hours per employee) than establishments with 100-499 employees (12.1 hours per employee) or with 500 or more employees (12.0 hours per employee). (See table 1.) Employees in smaller establishments also participated in the fewest formal training activities. (See table 2.) The industries that provided the most hours of formal training were transportation, communications, and public utilities; finance, insurance, and real estate; and mining --18, 17, and 14 hours per employee, respectively. Establishments in retail trade and construction provided the fewest hours of formal training per employee, 4 and 5 hours, respectively. (See table 3.) The industries that provided the largest number of formal training activities per employee were nondurable manufacturing, mining, and construction. Job-skills training. More hours of computer training (2.1 hours per employee) were provided than any other type of formal job-skills training. Professional/technical training and production/construction-related training were the next most frequent types of formal training with about 1 hour of training per employee for each type. (See table 1.) The fact that a high (or low) proportion of establishments offer a particular type of job-skills training does not necessarily imply a high (or low) average number of hours per employee in that type of training. For example, management training, the most prevalent type of job-skills training based on incidence (67 percent of establishments), ranks fourth in hours per employee among the seven different types of job-skills training. (See table 1.) Formal training in job skills accounted for 67 percent of total hours of training and 48 percent of total training participants. Among job skills, computer training accounts for 20 percent of total formal training hours, the largest share of any training type. (See table 4.) Interestingly, computer training accounts for only 10 percent of total training participants (Employees who participate in more than 1 activity are counted separately for each.). This suggests that formal training in computer skills tends to be longer in duration than other types of training. General-skills training. Among the different types of formal general-skills training, the largest number of hours per employee was provided in communications/employee development/quality and in occupational safety, 1.4 hours and 1.2 hours, respectively. (See table 1.) Employees attended more formal training activities of these two types of general training than of any other type (0.3 and 0.6 activities per employee, respectively). (See table 2.) Occupational safety training was provided by a relatively high percentage of establishments (72 percent of establishments), and a relatively large amount of this type of training was provided (1.2 hours per employee and 0.6 activities per employee). Orientation training also was commonly provided (72 percent), but the amount of this type of training was relatively small, only 0.6 hours of formal training per employee and 0.1 activities per employee. (See tables 1 and 2.) Formal training in general skills accounted for 33 percent of total hours of training and 52 percent of total training participants. Among general-skills, occupational safety training accounted for 11 percent of total formal training hours and 27 percent of total formal training participants. This suggests that formal training in occupational safety, when provided, tends to involve relatively more employees than other types of training. (See table 4.) Patterns in selected categories of training expenditures per employee Establishments with 50 or more employees spent an average of $139 per employee during 1994 on the wages and salaries of in-house trainers, both full-time and part-time. The level of expenditures per employee tends to rise with the size of establishments, ranging from $52 per employee in establishments with 50-99 employees to $236 per employee for establishments with 500 or more employees. (See table 6.) Establishments with 50 or more employees spent an average of $98 per employee during 1994 on payments to outside trainers or training companies. Payments to outside trainers also increased with establishment size, ranging from $63 per employee for the smallest establishments to $135 per employee for the largest ones. (See table 6.) While larger establishments tend to spend more per employee on both in-house and outside trainers than smaller establishments, smaller establishments tend to spend relatively more on outside trainers than on in-house trainers. The ratio of expenditures per employee for outside trainers to the total of expenditures per employee for both in-house and outside trainers is highest for smaller establishments (50-99 employees). (See table 6.) There is substantial industry variation in the use of in-house and outside trainers. The industries that spent the most on both in-house and outside trainers were transportation, communications, and public utilities; and mining. The industries that spent the least were manufacturing, construction, and retail trade. (See table 7.) Payments to outside training funds, which include union-sponsored and trade association funds, do not vary systematically by establishment size. (See table 6). Expenditures per employee for outside training funds are greater by far in the construction establishments than in any other industry. This finding is consistent with anecdotal evidence that construction establishments tend to contribute heavily to union-sponsored funds for the purpose of training pools of construction workers. (See table 7.) Establishments spent an average of $51 per employee on tuition reimbursement during 1994. Establishments with 50-99 employees and 100-499 employees spent nearly $41 per employee on tuition reimbursement, while establishments in the largest size class spent significantly more per employee ($76). (See table 6.) Training expenditure levels Tables 8 and 9 report levels of training expenditures for the selected categories during 1994. Total expenditures in each of the selected categories increased with employment size. (See table 8.) The patterns of expenditures by industry show substantial variation, in large part reflecting the differences in relative employment levels across industries. For example, the largest industry division, the service industry, employed about 31 percent of private sector employees, and accounted for 36 percent of total expenditures on wage and salaries of in-house trainers. Establishment characteristics and the amount of training Establishments with lower rates of employee turnover, higher rates of employment growth, and smaller proportions of part-time employment provided more hours of training per employee on average from May to October 1995. These same establishments also tended to have higher levels of expenditures per employee in selected cost categories during 1994. Employee turnover. Establishments with high labor turnover train less intensively than other establishments, 7.2 hours per employee, compared with 12.5 hours per employee for medium- turnover establishments and 10.8 hours per employee for low-turnover establishments. Expenditures per employee for both in-house and outside trainers were substantially lower for establishments with the highest rates of employee turnover. In addition, expenditures per employee for tuition reimbursement also are lower for establishments with the highest rates of employee turnover. (See table 10.) Employment growth. Establishments that had relatively strong employment growth during the three months prior to being surveyed trained an average of 12.8 hours per employee, versus 9.0 hours per employee for establishments with stable employment and 8.1 hours per employee for establishments with declining employment levels. Proportion part time. Establishments with at least 10 percent of their employees working part time provided an average of 7.6 hours per employee of training, relative to 12.8 hours for the establishments having less than 10 percent (but at least some part-time workers) and 13.3 hours for establishments with no part-time workers. Establishments with the highest proportion of part-time employment also had substantially lower training expenditures per employee for tuition reimbursement, wages and salaries of in- house trainers, and payments made to outside trainers or training companies. Alternative workplace practices. Establishments with at least one of the nine alternative workplace practices covered by the survey provided substantially more hours of training per employee than establishments that have not adopted any of these practices. (See table 11.) Establishments that adopted any of the alternative workplace practices had higher levels of expenditures per employee for both in-house and outside trainers ($150 and $107 respectively) when compared with establishments that have not adopted any of these practices ($72 and $42, respectively). There was no significant difference in the level of expenditures per employee for tuition reimbursement between establishments that did and did not adopt these practices. Employer-provided benefits. The number of hours of formal training per employee tends to be higher among establishments with particular employer-provided benefits as compared with the average across all establishments. For example, those establishments with paid parental family leave provided on average 15.6 hours of training per employee, relative to 10.7 hours for all establishments. Establishments with paid vacation, a more commonly offered benefit, provided the same number of hours of formal training per employee as the average across all establishments. (See table 12.) Payments to in-house and outside trainers and payments for tuition reimbursement also tended to rise with the number of benefits provided. Training programs and practices Among the different types of training programs and practices that establishments reported, the most common, used by 80 percent of the establishments, was the financing of some training off- site. Other programs in place at more than half of the establishments were tuition reimbursement, occupation-specific training plans, and training advice provided to employees during their annual review. Three types of training practices that are tailored specifically to the training needs of individuals, often in relatively more intensive one-on-one interactions, were less common than the other practices reported. Some 44 percent of establishments had mentoring programs, slightly more than 40 percent of establishments reported using individualized career and development plans, and only 24 percent had formal apprenticeship programs. Among establishments that provided formal training in the last 12 months, 91 percent reported in-house staff provided at least some of the training. The next most frequent source was other firms, including private training companies. Product suppliers also provided training for nearly half the establishments. In general, larger establishments take advantage of a wider range of options. For instance, community colleges and other educational institutions were used by larger employers in more than half the cases, but much less frequently by establishments in the other size classes. Larger establishments also are likely to rely more heavily on in-house trainers. For example, the largest group of establishments provided 98 percent of clerical and administrative support skills training in-house versus 19 percent for the small establishments and 16 percent for the medium ones. Important differences also are evident across types of training in terms of the likelihood of training being provided in-house. Virtually all orientation training is carried out by employees of the establishment itself. Most other types of training are carried out in-house the majority of the time. Exceptions are basic-skills training, for which only 12 percent occurred in-house, employee health and awareness training (16 percent), and clerical and administrative support skills training (47 percent). Trends in amount of formal training provided by employers The survey also indicates that employers have increased the amount of training in recent years. Some 65 percent of establishments increased the proportion of employees who have received training in the last three years, with only 3 percent indicating a decrease. Nearly 70 percent increased the amount they spend on training, while only 5 percent experienced a decrease. (See table 13.) Over the past three years, medium and large size establishments show a greater likelihood of increasing the proportion of employees trained, 71 percent and 76 percent respectively, relative to 60 percent for the smallest size. Very similar trends were evident in terms of the amount of money being spent on training. (See table 13.) Establishments in nondurable manufacturing were most likely to have increased training efforts over the past three years. This was true when trends are measured by the proportion of employees trained, as well as by whether or not the money spent on training has increased. All industries, showed a tendency to have increased training efforts over the past three years. TECHNICAL NOTE Background and scope of the survey In recent years, the Employment Training Administration (ETA) has provided funding to the Bureau of Labor Statistics (BLS) to collect nationally representative data on employer-provided training. The first Survey of Employer Provided Training, conducted in 1994, focused on the existence and types of formal training programs provided or financed by establishments during 1993. The second Survey of Employer- Provided Training, conducted in 1995, collected information from both employers and randomly selected employees. The employer portion of the survey, which is reported here, focused on the intensity and costs of employer-provided formal training. Information from the employee portion of the survey will be released in the fall of 1996. The data presented in this report represent the universe of 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 two-digit Standard Industrial Classifications (SIC) based on the 1987 Standard Industrial Classification Manual: Mining SIC 10, 12 - 14 Construction SIC 15 - 17 Nondurable Manufacturing SIC 20 - 23, 26 - 31 Durable Manufacturing SIC 24, 25, 32 - 39 Transportation and Public Utilities SIC 41, 42, 44 - 49 Wholesale Trade SIC 50, 51 Retail Trade SIC 52 - 59 Finance, Insurance and Real Estate SIC 60 - 65, 67 Services SIC 07, 70, 72, 73, 75, 76, 78 - 84, 86, 87, 89. Major definitions and concepts 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. Training is the transfer of work-related skills, knowledge, or information. Training may be offered at the establishment or at another location during working hours or at other times. Training may be offered at the establishment or at another location during working hours or at other times. Training costs may be paid for entirely by the employer or shared with others. Formal training is defined in the survey as training that is planned in advance and has a structured format and defined curriculum. Management training is training in supervising 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, business; or 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 occupationsfood, 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; constructing, altering or maintaining buildings and other structures. 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 Opportunities (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. Labor turnover is measured by computing the ratio of hires and separations in a three month period to employment levels. On the basis of these rates, establishments were placed into three categories, depending on whether their turnover was low (less than 1 percent), medium (at least 1 percent and less than 25 percent) or high (25 percent or greater). Employment growth is measured as the percentage change in employment in the three months before the establishment responded to the questionnaire. These changes were then used to group establishment into three categories based on their employment growth rates: declining employment (less than -.005 percent); stable employment (at least -.005 percent and less than .005 percent); and growing employment (greater than or equal to .005 percent). Extent of part-time employment, the proportion of employees on the payroll who work part time, was divided into three categories: no part-time workers (low), part-time proportion greater than zero but less than 10 percent (medium); and more than 10 percent part time (high). Data collection procedures The employer portion of the 1995 Survey of Employer Provided Training was carried out over a six-month period, from May 1995 through October 1995. Two survey instruments were utilized--a questionnaire and a training log. The employer questionnaire focused on training programs and practices of the establishments. Questions were included on the selected costs of formal training including the wages and salaries of in-house trainers, fees paid to outside training companies, and tuition reimbursement amounts. In addition, information was collected on a variety of establishment characteristics expected to be correlated with the provision of formal training. These included the existence of various workplace practices, types of benefits, extent of contract employment, extent of unionization, and employee turnover rates. The employer log collected detailed information on all formal training events provided or financed by the establishment over a two-week period. The requested information included a count of the number of employees in each formal training activity, the hours of training, the type of training, and who conducted the training. Experienced field economists in the BLS regional offices first contacted establishment representatives by telephone to request a personal interview. Based on field research, a personal visit to the establishment was deemed necessary to collect accurate and complete information on training intensity measures. During the personal visit, field economists administered the employer questionnaire to the respondent using computer-assisted personal interviewing (CAPI). The field economist had the option of collecting the training log data for the past two weeks at this time or leaving the log with the employer to complete over the following two weeks. Decisions to collect log data or leave the log for completion were based on the availability and quality of training records/schedules/rosters. Sampling Procedures The sampling frame for this survey was the list of private ownership establishments on the Bureau of Labor Statistics' Universe Data Base (UDB) having one of the SIC's specified in the Scope of the Survey and having 50 or more employees. The UDB is based on reports to State Employment Security Agencies for Unemployment Insurance purposes. The reference date of the sampling frame was the fourth quarter of 1993. The frame units were classified into strata based on their Standard Industrial Classification and employment. The nine industry classes used are listed under the Scope of the Survey section, at the beginning of this technical note. The five employment classes used were: 50 to 249 250 to 499 500 to 2499 2500 to 4999 5000 and above. A sample size of approximately 170 establishments was set for each industry class. Within each industry, the sample was allocated to the employment classes approximately proportional to their total employment. Within each stratum, a probability sample of the allocated size was systematically selected. The sampled units were given a Sampling Weight that was the ratio of the number of frame units to the number of sampled units. When it was determined that a sampled frame unit consisted of more than one establishment, one of these establishments was randomly selected for inclusion in the sample. Each sampled establishment was assigned a Subsampling Factor that was equal to the number of establishments in its frame unit. Each sampled establishment was assigned an interval of 14 contiguous days from the survey's reference period, May through October of 1995. Response Of the 1,543 establishments selected, 1,433 were eligible for survey participation (i.e., excluding those out of business or out of scope). Usable employer questionnaires were collected from 1,062 of the respondents, for an adjusted response rate of 74.1 percent. Usable employer logs were collected from 949 respondents, for an adjusted response rate of 66.2 percent. The remaining establishments did not respond or provided unusable data. A usable employer questionnaire was required in order for the employer log to be considered for usable status. Estimation A weighting class non-response adjustment procedure was used for each of the survey's instruments to account for the small number of sampled establishments that did not provide any data for the instrument. For otherwise usable schedules, a hot-deck procedure was used to impute a value for any item on the schedule for which the establishment could not provide data. Each of the usable schedules has a Final Weight associated with it. For the Employer Questionnaires, the Final Weight is the product of a schedule's Sampling Weight, Questionnaire Nonresponse Adjustment, and Subsampling Factor. For the Employer Training Log, the Final Weight is the product of a schedule's Sampling Weight, Log Nonresponse Adjustment, Subsampling Factor and the constant 13.143 (the total number of days in the Survey's reference period divided by 14 days). Reliability of estimates The estimates in this report are based on a probability sample rather than a census of the population. The sample selected was one of many possible samples, each of which could have produced different estimates that may differ from the results obtained from a census of the population. This sampling error, 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 report 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 question; errors in recording, coding, and processing the data; etc. Several processes were used in the survey to reduce the non-sampling errors through both survey development and in data validation and review. Additional information BLS plans to issue a bulletin by the end of the year that provides more detailed information and analysis of its survey of employer-provided training. For further information, please contact (202) 606-7386.