April 1997

Employer-Provided Worker Training

Employees in establishments with 50 or more employees received an average of 10.7 hours of formal training from May through October 1995. Employees in smaller establishments (50-99 employees) received fewer hours of formal training on average, 5.7 hours, than employees in large establishments (500 or more employees), 12.0 hours on average.*

Some industries provide more formal training than others. Transportation, communications, and public utilities provided 18.3 hours on average; finance, insurance, and real estate provided 16.6 hours; while retail trade and construction provided the least, 3.7 and 5.0 hours, respectively.

Employees were trained in two skill groups: job skills and general skills. Among job skills, training time was longest for computer training (2.1 hours on average) and professional and technical training (1.3 hours). Among general skills, the most time was spent on communications and quality (1.4 hours) and occupational safety (1.2 hours).

As a percentage of all hours spent in various types of formal training, the highest percentages of time spent were on computer training (19.9 percent) and communications and quality (13.2 percent). The lowest percentages were on awareness (0.5 percent) and basic skills (1.0 percent).

Establishments were asked whether the percentage of employees who receive formal training has changed. Sixty-five percent reported that the percentage of employees receiving formal training has increased, while only 3.4 percent reported a decrease.

Spending on formal worker training in 1994 is estimated at $16.6 billion. Nearly one-half of this amount, $7.7 billion, was spent on wages and salaries of in-house trainers. Nearly 33 percent ($5.5 billion) was spent on payments to outside trainers. Nearly 17 percent ($2.8 billion) was spent on tuition reimbursement. Nearly 4 percent ($0.6 billion) was spent on contributions to outside training funds.**

Large establishments spent more on formal worker training than small establishments. Establishments with 500 or more employees spent an estimated $9.0 billion, while establishments with 50-99 employees spent an estimated $1.9 billion.

Expenditures across industries can be measured by comparing the expenditure per employee. The highest expenditure category was on wages and salaries of in-house trainers. Among all private industries, total expenditures per employee on wages and salaries of in-house trainers amounted to $139. Transportation, communications, and public utilities ($334) and mining ($299) spent the most per employee, while retail trade ($31) and construction ($64) spent the least.

Tuition reimbursement is a popularly recognized method of worker training. In 1994, among all private industries, employers spent $51 per employee on tuition reimbursement. Tuition reimbursement was highest in financing, insurance, and real estate ($74) and durable good manufacturing ($74) and lowest in construction ($16).

The proportion of establishments reporting that the amount of money spent on formal training increased was 69.2 percent, while 25.6 percent reported no change. Five percent of establishments reported a decrease in the amount of money spent on formal training.

For more information, contact Ken McDonnell (202) 775-6342.
Source: EBRI Databook on Employee Benefits, fourth edition, 1997 forthcoming.
*These data were provided by a survey sponsored by the Employment and Training Administration of the U.S. Department of Labor. The survey was conducted from May through October 1995. It measured three aspects of employee training: 1) average number of hours of training per employee, 2) average number of training activities per employee, and 3) expenditures per employee in four selected spending categories reported for calendar year 1994.
**The data presented on expenditures for formal training are estimates. They do not include the following: wage and salary value of time employees spent in training-related activities, payments for training equipment, supplies, space, and travel. Therefore, the data presented here are not representative of total expenditures on formal worker training.