Academic journal article Academy of Entrepreneurship Journal

A Comparison of Employment Training by Firm Size and Industry

Academic journal article Academy of Entrepreneurship Journal

A Comparison of Employment Training by Firm Size and Industry

Article excerpt

INTRODUCTION

Within the context of human resources management, employment training is a popular topic with entire journals devoted to training. Various researchers have found that effective training can decrease turnover (Leibowitz, Scholssberg, & Shore, 1991) and lead to increased productivity and profitability (Benabou, 1996; Black & Lynch, 1996; Overmyer-Day & Benson, 1996). A variety of ways to measure training effectiveness exist (Cannell, 1996; Williams, 1996: Yang, Sackett, & Arvey, 1996) including return on investment (Parry, 1996). However, according to surveyed adults aged 23 to 35 rather than employers, although workers gain substantial benefits from training, only a small minority actually receive any training (Lengermann, 1996).

Training is generally considered an investment (Wright & Belcourt, 1995). However, costs are still associated with the training investment, and a variety of ways exist to determine the costs of training. The American Society for Training and Development recommended that human resource professionals budget around 2% of payroll costs for training and plan a long term increase to 4% (Caudron, 1992). The U.S. Bureau of Labor Statistics estimated that the direct cost of training was $55.3 billion in 1995, however, this is only part of the total cost picture (Benson, 1996).

Although many variables will influence the future of the workplace, a critical few are likely to have make-or-break consequences in the current trends on the future of training. The key variables are: smart products--placing information services in products and in distribution channels for products and services, connectivity--ability of people to connect, and intellectual capital--ability to attract hard capital for investment and development influencing the future of many industries (Galagan, 1996; Plott, & Humphrey, 1996).

TYPES OF EMPLOYEE TRAINING

The three primary types of training include orientation, job/skill, and theory/culture. There are other types of training including management development. Around $21 0 billion are spent on training annually. Further, around $120 billion is spent on orientation and skill training, $30 billion on culture training, and the rest in other areas, such as management training and development (Hom & Griffeth, 1995). London (1989) indicated that skill/job and theory/culture training may be combined. Depending on the training session topic and goals, both theory and skills may need to be presented and learned by the trainees.

Jackson and Mathis (1997) stated that employee orientation training should create a favorable impression of the organization, enhance interpersonal acceptance, and reduce employee turnover. Welcoming new employees is important to their success (Kliem, 1987). Mackinnon (1996) recommended an intensive induction period for new small business employees

Skills/job training is the process by which a physical skill is presented and learned in order to accomplish a task or goal (Ferman, Hoyman, Cuther-Gershenfeld, & Savoie, 1990). Employees learn to do their job through skills training (Carnevale, Gainer, & Villet, 1990).

Theory/corporate culture training is the process of stressing ideas not skills. As defined by Ferman et al. (1990), theory/corporate culture training is the process by which information, facts, knowledge and principles are presented and learned in order to accomplish a task or goal. Corporate culture training is projected to continue to increase though the 1990s (Hom & Griffeth, 1995).

SMALL BUSINESS EMPLOYEE TRAINING

Much research focuses on training in large organizations (Lee & Mitchell, 1994; Wanous, Poland, Premack, & Davis, 1992), with less research in small organizations (Barclays, 1995; Curran, Blackburn, Kitching, & North, 1996). Barclays (1995) recommended that to survive small businesses should implement training programs. …

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