May 28, 2009, Toronto – The most comprehensive and rigorous study
ever undertaken on workplace training in Canada's smaller businesses, has
revealed this sector invests more than its big business counterparts on total
training costs per employee.
The study was undertaken by the Canadian
Federation of Independent Business (CFIB) and conducted nationally among its
members. What's unique about CFIB's report, says Dan Kelly, CFIB's senior vice-president
of legislative affairs, is that it didn't just focus on formal (professionally
delivered) training – as most research does – it looked at informal training or
on-the-job training which is the predominant mode in smaller firms.
Among its most revealing findings, the
study found that a small business owner spends an average of $2,700 annually
per employee on all forms of training, and for new ones with no experience the
cost rises to $5,400. Kelly said that while informal training represents nearly
three-quarters of the average training expense, small- and medium-sized
enterprises (SMEs) have also dramatically increased their use of formal
training. He explained this adds up to a nation-wide annual investment of $18
billion on employee training in small and medium-sized enterprises (SMEs).
Kelly further pointed out that due to the
challenge of measuring informal, on-the-job training, governments and other
institutions have, for too long, not supported or even recognized the massive
contribution smaller firms make in training this country's workforce. Despite
the soft economy, Kelly noted that Canada's demographics dictate that the
shortage of skills and labour will continue to be a growing problem in the
years ahead. CFIB's recommendations therefore focus on ways government can
assist, such as with training incentives.
CFIB's vice-president of national affairs,
Corinne Pohlmann, said that rather than examining an expansion to Employment
Insurance (EI) benefits which can hurt a firm's ability to find staff,
government should consider helping SMEs by making it easier to hire and train
new employees. "As the report reveals that the smallest firms hire those
with no experience at twice the rate of larger businesses, an EI hiring or
training incentive would be welcome news to Canada's entrepreneurs,"
Pohlmann added.
The study also revealed that SMEs often do
not get to reap the benefits of their training investments for long as, in the
smallest of firms, 20 per cent of employees leave the business in an average
year. This separation rate is double that of larger businesses. "Once
they've got some training and experience under their belts, workers at SMEs are
often poached by more sizeable employers," Kelly said. He added that
forced to cope with this revolving door of under-skilled labour, small business
owners are left to start the hiring and training cycle once again.
To view the full report, Canada's Training
Ground: SME's $18 Billion Investment in the Nation's Workforce, go to CFIB.
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