Value of Worker Training Programs to Small Business

by Carolyn Looff and Associates Mark C. Berger, John Barron, and Dan A. Black.

2001. [126 pages] Lexington, Kentucky 40502

under contract no. SBAHQ-99-R-0018

This Small Business Research Summary (ISSN 1076-8904) summarizes one of a series of research papers prepared under contracts

issued by the U.S. Small Business Administration’s Office of Advocacy. The opinions and recommendations of the authors of this study do

not necessarily reflect official policies of the SBA or other agencies of the U.S. government. For more information, write to the Office of

Advocacy at 409 Third Street S.W., Washington, DC 20416, or visit the office’s Internet site at www.sba.gov/advo.

Purpose

A 1992 report on small firms and job training found

interesting results but is becoming dated. The present

report attempts to update and extend the previous

report. The new report answers the following questions: Are there still firm size differences in the

knowledge and use of government training programs? Has the overall use of these programs

increased or decreased? What are the major factors

behind the decision to use or not use government

training programs? Are firms that use government

training programs satisfied with them? What changes

would make government training programs more

useful to small businesses?

Scope and Methodology

The 1992 SBA Training Survey found that only half

of businesses with fewer than 25 employees had

heard of government training programs, and more

than three-quarters of businesses with 500 or more

employees had heard of government training programs. Firm size differences in the percentages of

firms that had hired workers using one of these programs were even greater.

The new 2001 SBA Business Training Survey is

similar to the 1992 survey and includes many of the

same questions focusing on training programs and

their objectives. The new survey aids in comparisons

over time, and has a series of new questions that deal

with experiences with government training programs.

The 2001 survey included 158 federal, state, and

local programs in eight states in the sample, and

1,024 completed interviews.

Highlights

Targeting Small Businesses

• Programs targeting small businesses are more

likely to offer apprenticeship training, culture-based

training, essential workplace skills, safety training,

training on industrial quality standards, literacy

skills, management skills, and customized training.

• Programs that do not target services to small

businesses are more likely to focus on computer or

software training.

• Within the 59 training programs that reported a

particular focus on small firms, a variety of services

were included—some targeted to employees and others to the owners of small businesses. Almost 70 percent of the administrators reported that they were

satisfied or very satisfied with how well the smallbusiness-targeted services were working.

• Elements that small businesses find useful

include affordability, customized training programs;

flexible times, modes, and locations; and programs

that provide various employer and employee skills.

• Once businesses start using the programs, most

are fairly pleased with them. However, a significant

minority of firms, particularly smaller firms, would

not use these programs again and think that they do

not meet their needs. In addition, a growing perception among those graduating from the programs is

that individuals are not adequately trained. Thus, it

appears there is the potential to improve the value of

government training programs to small businesses.

Trends

In both 1992 and 2001, larger firms were more likely

to have heard of and used government training
programs. However, between 1992 and 2001, the

awareness and use of these programs dropped dramatically in all firm size categories. The largest drop

was in the smallest firm size categories.

Between 1992 and 2001, the composition of training programs used most by businesses also changed

noticeably. In 1992, the smallest firms were much

more likely to use state and local training programs,

while the largest firms were much more likely to use

federal training programs. In 2001, different firm

size categories used similar combinations of federal,

state and local, and other programs. This can be an

important opening for policymakers to increase the

value of government training programs to small firms.

Ordering Information

The full text of this report and summaries of other

studies performed under contract with the U.S. Small

Business Administration’s Office of Advocacy are

available on the Internet at www.sba.gov/advo/research.

Printed copies are available for purchase from:

National Technical Information Service

5285 Port Royal Road

Springfield, VA 22161

Tel. (800) 553-6847

TDD: (703) 487-4639

Order number: PB2002-102205

The National Technical Information Service’s

complete database of federally funded business

research is available on the Internet at www.ntis.gov.