Approaches to Measuring and Understanding Employer Training Expenditure

While it is recognised that employers invest a substantial amount of money and time in training, the exact nature and amount of this investment is poorly measured and understood. This project set out to supplement the available data, which have many limitations, with more detailed data for selected industries. However, it became quickly apparent that this was not possible. It found that good data on employer-funded training are extremely difficult to capture, not only because of the diversity by which employers meet their skill needs, but also because many employers do not keep accurate records. As a consequence, the report focuses on measurement issues rather than hard, quantitative data. Nevertheless, this paper offers some insights into aspects related to training expenditure across firms in the four selected industries: construction, retail trade, manufacturing and health and community services. The research found that some of the drivers for investment in training--such as government employer incentives--are common across industries; others--such as compliance with regulations, shortages, labour turnover and exposure to competition--will vary, depending on specific industry circumstances. The common perception is that small firms tend not to invest in training to any great extent. This research suggests that the traditional split between high-spending large firms and their small low-spending counterparts does not always reflect actual practice. One of the difficulties in getting an accurate picture of the training landscape is that a significant amount of informal training is not recorded. The research also suggests how a national survey of employer training expenditure and practices might best be implemented in the future. The authors argue that collecting data based on employers' impressions is better than having no data, especially where baseline data can be supplemented with in-depth qualitative research. In considering any future survey, however, it would be important to understand the key policy initiatives that the outputs are likely to inform so that a manageable and robust survey can be designed. It also needs to be borne in mind that collecting training practices data is problematic, because training is often decentralised and suitable records are not retained. Appended to this report are statistics on employment and training. (Contains 3 tables.) [For the support document, see ED503375. Funding for this work was provided by the Australian Department of Education, Employment and Workplace Relations.]