Research by CFIB shows steady and significant improvement
Small businesses are getting better at training and development, according to a new study by the Canadian Federation of Independent Business (CFIB).
The study shows 56 per cent of smaller firms had an increase in the amount of time and money invested on employee training during the last three years. Another 34 per cent reported no change, while eight per cent said they did not know and two per cent indicated a decrease in investment on training.
Looking into the future, nearly half of respondents — 48 per cent — said they expect to increase the amount of training in the next three years.
CFIB president Catherine Swift called the findings very significant.
“They clearly show that the training trend within this sector continues to grow and gather momentum,” she said. “(It) also reveals that a strong majority of small- and medium-sized businesses provide training for their employees by various means.”
She said 43 per cent of small business owners provided a mix of formal and informal training, while another 43 per cent have given just informal training. Formal training consists of things like classroom courses, seminars and workshops while informal training covers things like on-the-job training, tutoring and mentoring.
On average, small business invest 113 hours of informal training and 23 hours of formal training per year for a new employee.
“That represents well over three 40-hour-full-time weeks per new employee and a significant investment of time and money for the firm’s owner,” said Smith.
Why small firms are training
The reasons behind the push to promote training among employees varies. Two-thirds of small firms said they train in order to quickly integrate new hires, to be more competitive or to upgrade under-qualified employees.
About half said they need to train employees in order to update skills for new technology. Employee retention is another important reason for training cited by employers. One-eighth of respondents said replacing retiring employees and addressing gaps in basic education skills are also reasons prompting them to train staff.
Who is responsible for training?
Slightly more than half — 54 per cent — said that the responsibility for training their personnel lies mainly with the organization.
“This commitment is well in keeping with the sense of responsibility and self-reliance that is at the heart of entrepreneurship,” said Swift. But she said other stakeholders have a role to play in supporting employers and employees.
She said governments should reduce payroll taxes and other profit-insensitive taxes like Employment Insurance to encourage small businesses to provide more training. One-third of respondents said they would be encouraged by better partnerships between businesses and the education system, while one-quarter said they could use help in finding training information and resources.
High schools get failing grade from small business
Small firms are least satisfied with the job high schools are doing in preparing graduates for employment. Swift said 47 per cent of respondents said they were either very or somewhat satisfied with the level of job readiness of high school graduates they hired.
Satisfaction levels jumped considerably with college and university graduates, registering levels of 65 per cent and 64 per cent respectively.
Small business owners were most satisfied with graduates from private training institutes, with 71 per cent having this view, according to the study.
“This sends a clear message that we need to take a closer look at the strategies we use in getting graduates ready to enter the workforce,” said Swift.
Lessons from Quebec
Another interesting finding from the report was that Quebec’s experience with payroll training taxes shows this may not be the best way to encourage training, according to the CFIB.
Quebec is the only province to impose a payroll tax associated with training, but its small firms are twice more likely not to offer training. Swift said it appears the requirement for businesses to provide training, as defined by the provincial government in order to avoid paying the one-per-cent tax, has become a disincentive for business owners rather than a motivating factor.
“In bureaucratic circles, the tendency has often been to undervalue the importance of informal training and when it has been recognized, the paper burden associated with documenting the informal training provided has been so massive that small firms in Quebec have preferred paying the tax,” said Swift.
Across the country, small firms in Western Canada are more likely to train employees than their counterparts in Eastern Canada.
The Labour and Training survey was conducted by CFIB between Sept. 28 and Nov. 15, 2002 and drew 6,470 respondents. The national results are accurate to within plus or minus one percentage points, 19 times out of 20.
The study shows 56 per cent of smaller firms had an increase in the amount of time and money invested on employee training during the last three years. Another 34 per cent reported no change, while eight per cent said they did not know and two per cent indicated a decrease in investment on training.
Looking into the future, nearly half of respondents — 48 per cent — said they expect to increase the amount of training in the next three years.
CFIB president Catherine Swift called the findings very significant.
“They clearly show that the training trend within this sector continues to grow and gather momentum,” she said. “(It) also reveals that a strong majority of small- and medium-sized businesses provide training for their employees by various means.”
She said 43 per cent of small business owners provided a mix of formal and informal training, while another 43 per cent have given just informal training. Formal training consists of things like classroom courses, seminars and workshops while informal training covers things like on-the-job training, tutoring and mentoring.
On average, small business invest 113 hours of informal training and 23 hours of formal training per year for a new employee.
“That represents well over three 40-hour-full-time weeks per new employee and a significant investment of time and money for the firm’s owner,” said Smith.
Why small firms are training
The reasons behind the push to promote training among employees varies. Two-thirds of small firms said they train in order to quickly integrate new hires, to be more competitive or to upgrade under-qualified employees.
About half said they need to train employees in order to update skills for new technology. Employee retention is another important reason for training cited by employers. One-eighth of respondents said replacing retiring employees and addressing gaps in basic education skills are also reasons prompting them to train staff.
Who is responsible for training?
Slightly more than half — 54 per cent — said that the responsibility for training their personnel lies mainly with the organization.
“This commitment is well in keeping with the sense of responsibility and self-reliance that is at the heart of entrepreneurship,” said Swift. But she said other stakeholders have a role to play in supporting employers and employees.
She said governments should reduce payroll taxes and other profit-insensitive taxes like Employment Insurance to encourage small businesses to provide more training. One-third of respondents said they would be encouraged by better partnerships between businesses and the education system, while one-quarter said they could use help in finding training information and resources.
High schools get failing grade from small business
Small firms are least satisfied with the job high schools are doing in preparing graduates for employment. Swift said 47 per cent of respondents said they were either very or somewhat satisfied with the level of job readiness of high school graduates they hired.
Satisfaction levels jumped considerably with college and university graduates, registering levels of 65 per cent and 64 per cent respectively.
Small business owners were most satisfied with graduates from private training institutes, with 71 per cent having this view, according to the study.
“This sends a clear message that we need to take a closer look at the strategies we use in getting graduates ready to enter the workforce,” said Swift.
Lessons from Quebec
Another interesting finding from the report was that Quebec’s experience with payroll training taxes shows this may not be the best way to encourage training, according to the CFIB.
Quebec is the only province to impose a payroll tax associated with training, but its small firms are twice more likely not to offer training. Swift said it appears the requirement for businesses to provide training, as defined by the provincial government in order to avoid paying the one-per-cent tax, has become a disincentive for business owners rather than a motivating factor.
“In bureaucratic circles, the tendency has often been to undervalue the importance of informal training and when it has been recognized, the paper burden associated with documenting the informal training provided has been so massive that small firms in Quebec have preferred paying the tax,” said Swift.
Across the country, small firms in Western Canada are more likely to train employees than their counterparts in Eastern Canada.
The Labour and Training survey was conducted by CFIB between Sept. 28 and Nov. 15, 2002 and drew 6,470 respondents. The national results are accurate to within plus or minus one percentage points, 19 times out of 20.
